Question 1

The accountant for Muzhi's Sushi claims that Muzhi has accomplished "economic efficiency." This means that Muzhi's Sushi

Accepted Answer

A)  produces a given output using the least inputs. 
B)  produces a given output at the lowest cost. 
C)  has an economic profit greater than a normal profit. 
D)  has a normal profit greater than an economic profit. 
A)  produces a given output using the least inputs. 
B)  produces a given output at the lowest cost. 
C)  has an economic profit greater than a normal profit. 
D)  has a normal profit greater than an economic profit. B

Question 2

Joe's Pizza Shop only makes pizza. If each pizza requires five people, each of whom specializes in one task, this method of production is an example of

Accepted Answer

A)  economies of scope. 
B)  team production. 
C)  economies of monitoring. 
D)  economies of coordination. 
A)  economies of scope. 
B)  team production. 
C)  economies of monitoring. 
D)  economies of coordination. B

Question 3

The most important goal of the firm is to

Accepted Answer

A)  maximize its revenues. 
B)  maximize its sales volume. 
C)  maximize its profits. 
D)  minimize its costs. 
A)  maximize its revenues. 
B)  maximize its sales volume. 
C)  maximize its profits. 
D)  minimize its costs. C

Question 4

Which of the following is part of a firm's opportunity costs? I. wages
II) utility costs
III) interest on a bank loan
IV) interest forgone on funds used to buy capital equipment

Accepted Answer

A)  I and II 
B)  III and IV 
C)  I, II and III 
D)  I, II, III and IV 
A)  I and II 
B)  III and IV 
C)  I, II and III 
D)  I, II, III and IV

Question 5

A corporation is a firm owned by

Accepted Answer

A)  two or more owners who have unlimited liability. 
B)  a single owner who has unlimited liability. 
C)  at least 20 stockholders who have partially limited liability. 
D)  stockholders who have limited liability. 
A)  two or more owners who have unlimited liability. 
B)  a single owner who has unlimited liability. 
C)  at least 20 stockholders who have partially limited liability. 
D)  stockholders who have limited liability.

Question 6

-FasterChip, Inc. is considering five alternative techniques for assembling personal computers. The table shows the amounts of labor and capital required by each of these techniques to make 10 computers a day. Labor costs $15 an hour and capital costs $100 a unit.
a) Which techniques are technologically efficient and which are not? Explain your answer.
b) Which technique is economically efficient? Explain.
c) If FasterChip uses its plant in Mexico, it can lower the labor cost to $10 an hour. Which technique will the company use in Mexico? Explain.

Accepted Answer

a) Technique B is technologically ineffi

Question 7

Which of the following statements does NOT correctly characterize normal profit?

Accepted Answer

A)  It is part of a firm's opportunity cost. 
B)  It is equal to a firm's total revenue minus its opportunity cost. 
C)  It is the average return for supplying entrepreneurial ability. 
D)  None of the above because all the statements correctly characterize normal profit. 
A)  It is part of a firm's opportunity cost. 
B)  It is equal to a firm's total revenue minus its opportunity cost. 
C)  It is the average return for supplying entrepreneurial ability. 
D)  None of the above because all the statements correctly characterize normal profit.

Question 8

What are the main advantages and disadvantages of organizing a business as a corporation?

Accepted Answer

The main advantages are limited liabilit

Question 9

Profit maximization

Accepted Answer

A)  makes a firm become as large as possible. 
B)  makes a firm remain small in the long run. 
C)  increases the likelihood that a firm will survive. 
D)  leads a firm to become the target of a takeover. 
A)  makes a firm become as large as possible. 
B)  makes a firm remain small in the long run. 
C)  increases the likelihood that a firm will survive. 
D)  leads a firm to become the target of a takeover.

Question 10

If 10 firms share the sales of the market equally, the four-firm concentration ratio is ________ percent.

Accepted Answer

A)  100 
B)  40 
C)  10 
D)  5 
A)  100 
B)  40 
C)  10 
D)  5

Question 11

Economic efficiency definitely occurs whenever

Accepted Answer

A)  a firm cannot increase its output without increasing all its inputs. 
B)  there are no implicit costs. 
C)  the most modern technology is used in the production process. 
D)  the firm produces a given output at the least cost. 
A)  a firm cannot increase its output without increasing all its inputs. 
B)  there are no implicit costs. 
C)  the most modern technology is used in the production process. 
D)  the firm produces a given output at the least cost.

Question 12

Which of the following can lead to a firm being more efficient that a market? A firm can have I. economies of scale.
II) economies of scope.
III) lower transactions costs.

Accepted Answer

A)  III only 
B)  I and II 
C)  II and III 
D)  I, II and III 
A)  III only 
B)  I and II 
C)  II and III 
D)  I, II and III

Question 13

Tudor's Deli and Catering could have sold their delivery van on December 31, 2010 for $16,000. If they could sell the same van on December 31, 2011, for $13,000, then the economic depreciation in 2011 for this van

Accepted Answer

A)  is $13,000. 
B)  is $16,000. 
C)  is $29,000. 
D)  is $3,000. 
A)  is $13,000. 
B)  is $16,000. 
C)  is $29,000. 
D)  is $3,000.

Question 14

When the cost of producing a unit of a good decreases as its output rate increases, there are economies of

Accepted Answer

A)  scale. 
B)  scope. 
C)  production. 
D)  size. 
A)  scale. 
B)  scope. 
C)  production. 
D)  size.

Question 15

A firm that is technologically efficient

Accepted Answer

A)  must be economically efficient, but a firm that is economically efficient is not always technologically efficient. 
B)  must be economically efficient, and a firm that is economically efficient must always be technologically efficient. 
C)  is not always economically efficient, and a firm that is economically efficient is not always technologically efficient. 
D)  is not always economically efficient, but a firm that is economically efficient must always be technologically efficient. 
A)  must be economically efficient, but a firm that is economically efficient is not always technologically efficient. 
B)  must be economically efficient, and a firm that is economically efficient must always be technologically efficient. 
C)  is not always economically efficient, and a firm that is economically efficient is not always technologically efficient. 
D)  is not always economically efficient, but a firm that is economically efficient must always be technologically efficient.

Question 16

Over a given period, economic depreciation is the change in capital equipment's

Accepted Answer

A)  output. 
B)  market value. 
C)  rate of return. 
D)  cost of maintenance. 
A)  output. 
B)  market value. 
C)  rate of return. 
D)  cost of maintenance.

Question 17

Under ________, there are many firms selling slightly different products.

Accepted Answer

A)  perfect competition 
B)  monopolistic competition 
C)  oligopoly 
D)  monopoly 
A)  perfect competition 
B)  monopolistic competition 
C)  oligopoly 
D)  monopoly

Question 18

Which of the following may yield economies of team production for Jitters Coffee Company, Inc.?

Accepted Answer

A)  dividing the process of packaging and shipping coffee into several specialized tasks, each performed by different people 
B)  expanding into a larger coffee packaging plant 
C)  expanding into the packaging and sale of tea and powdered chocolate 
D)  all of the above 
A)  dividing the process of packaging and shipping coffee into several specialized tasks, each performed by different people 
B)  expanding into a larger coffee packaging plant 
C)  expanding into the packaging and sale of tea and powdered chocolate 
D)  all of the above

Question 19

Although a corporation is the most common type of firm, corporations generate only a small share of business revenue in the U.S. economy.

Accepted Answer

A) True 
 B)False

Question 20

A low concentration ratio suggests

Accepted Answer

A)  a high degree of monopolization. 
B)  a high degree of competition. 
C)  that wages are a low share of costs. 
D)  that wages are a high share of costs. 
A)  a high degree of monopolization. 
B)  a high degree of competition. 
C)  that wages are a low share of costs. 
D)  that wages are a high share of costs.

The accountant for Muzhi's Sushi claims that Muzhi has accomplished "economic efficiency." This means that Muzhi's Sushi

Joe's Pizza Shop only makes pizza. If each pizza requires five people, each of whom specializes in one task, this method of production is an example of

The most important goal of the firm is to

Which of the following is part of a firm's opportunity costs? I. wages II) utility costs III) interest on a bank loan IV) interest forgone on funds used to buy capital equipment

A corporation is a firm owned by

Which of the following statements does NOT correctly characterize normal profit?

What are the main advantages and disadvantages of organizing a business as a corporation?

Profit maximization

If 10 firms share the sales of the market equally, the four-firm concentration ratio is ________ percent.

Economic efficiency definitely occurs whenever

Which of the following can lead to a firm being more efficient that a market? A firm can have I. economies of scale. II) economies of scope. III) lower transactions costs.

Tudor's Deli and Catering could have sold their delivery van on December 31, 2010 for $16,000. If they could sell the same van on December 31, 2011, for $13,000, then the economic depreciation in 2011 for this van

When the cost of producing a unit of a good decreases as its output rate increases, there are economies of

A firm that is technologically efficient

Over a given period, economic depreciation is the change in capital equipment's

Under ________, there are many firms selling slightly different products.

Which of the following may yield economies of team production for Jitters Coffee Company, Inc.?

Although a corporation is the most common type of firm, corporations generate only a small share of business revenue in the U.S. economy.

A low concentration ratio suggests

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 10: Organizing Production

The accountant for Muzhi's Sushi claims that Muzhi has accomplished "economic efficiency." This means that Muzhi's Sushi

Joe's Pizza Shop only makes pizza. If each pizza requires five people, each of whom specializes in one task, this method of production is an example of

The most important goal of the firm is to

Which of the following is part of a firm's opportunity costs? I. wages II) utility costs III) interest on a bank loan IV) interest forgone on funds used to buy capital equipment

A corporation is a firm owned by

Which of the following statements does NOT correctly characterize normal profit?

What are the main advantages and disadvantages of organizing a business as a corporation?

Profit maximization

If 10 firms share the sales of the market equally, the four-firm concentration ratio is ________ percent.

Economic efficiency definitely occurs whenever

Which of the following can lead to a firm being more efficient that a market? A firm can have I. economies of scale. II) economies of scope. III) lower transactions costs.

Tudor's Deli and Catering could have sold their delivery van on December 31, 2010 for $16,000. If they could sell the same van on December 31, 2011, for $13,000, then the economic depreciation in 2011 for this van

When the cost of producing a unit of a good decreases as its output rate increases, there are economies of

A firm that is technologically efficient

Over a given period, economic depreciation is the change in capital equipment's

Under ________, there are many firms selling slightly different products.

Which of the following may yield economies of team production for Jitters Coffee Company, Inc.?

Although a corporation is the most common type of firm, corporations generate only a small share of business revenue in the U.S. economy.

A low concentration ratio suggests

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters