Question 1

The manufacturing sector in the United States is dominated by

Accepted Answer

A)  corporations. 
B)  partnerships. 
C)  proprietorships. 
D)  government firms. 
A)  corporations. 
B)  partnerships. 
C)  proprietorships. 
D)  government firms.

Question 2

Suppose Angelo Sessa, owner of Sezz Medi Brick Oven Pizza in NYC, earns $350,000 in revenue per year. He spends $800 a month on ash wood for his stove, $2000 a month on rent, and $1500 a month on ingredients. He used to be a lawyer and earned $240,000 a year before he opened up Sezz Medi. Normal profit for a pizza business is $30,000. What is Angelo's opportunity cost of production?

Accepted Answer

A)  $350,000 
B)  $312,600 
C)  $288,000 
D)  $321,600 
A)  $350,000 
B)  $312,600 
C)  $288,000 
D)  $321,600

Question 3

A market structure in which many firms compete by making similar but slightly different products is called

Accepted Answer

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

Question 4

Sheila's Sports Shop is a very popular sporting goods store, which has a yearly revenue of $600,000. Sheila runs the business herself. Her alternative employment options are to be a college swimming coach for $50,000 per year or a construction worker for $40,000 per year. Sheila spends $230,000 purchasing goods for resale to her customers. She also has four employees, who each earn $25,000 per year. Sheila owns the building that her Sports Shop is housed in and she could have rented it out for $20,000 per year. Sheila's economic profit is equal to

Accepted Answer

A)  $160,000 per year. 
B)  $200,000 per year. 
C)  $250,000 per year. 
D)  $270,000 per year. 
A)  $160,000 per year. 
B)  $200,000 per year. 
C)  $250,000 per year. 
D)  $270,000 per year.

Question 5

Jessica is a young doctor who has just started her own practice. Her previous position paid her $80,000 a year. For office space, she uses a building which she owns and which she has rented in the past for $40,000 a year. Her total revenue from her new practice is $250,000. She pays $50,000 to other firms for materials and supplies, and she pays $40,000 in wages to her office nurse. Assume that Jessica's building and equipment do not depreciate and that her normal profit is $20,000.
a) What is the opportunity cost of all factors of production employed by Jessica?
b) What is Jessica's economic profit?

Accepted Answer

a) Jessica's opportunity costs are: the

Question 6

Can a firm achieve technological efficiency without achieving economic efficiency?

Accepted Answer

Yes. Technological efficiency means achi

Question 7

-The table above shows sales of the firms in the chocolate industry. What type of market is this?

Accepted Answer

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

Question 8

An advantage of the corporation over other forms of business organization is that

Accepted Answer

A)  the owners have unlimited liability. 
B)  a corporation's profits are taxed only once. 
C)  large-scale, low-cost capital is more readily available. 
D)  the decision-making structure is simple. 
A)  the owners have unlimited liability. 
B)  a corporation's profits are taxed only once. 
C)  large-scale, low-cost capital is more readily available. 
D)  the decision-making structure is simple.

Question 9

-The above table gives techniques that Fatz confectionery can use to produce 2,000 pounds of candy. If the cost of capital is $20 per unit and the cost of labor is $40 per unit, the economically efficient technique for producing 2000 pounds of candy is

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  D. 
A)  A. 
B)  B. 
C)  C. 
D)  D.

Question 10

-The table above shows techniques that can be used to produce 100 shirts. If the price of an hour of labor is $6 and the price of a unit of capital is $30, then the economically efficient technique is

Accepted Answer

A)  W. 
B)  X. 
C)  Y. 
D)  Z. 
A)  W. 
B)  X. 
C)  Y. 
D)  Z.

Question 11

Techniques that produce 100 sweaters
  
-Using the data in the above table, if the price of an hour of labor is $10 and the price of a unit of capital is $20, then the most economically efficient technique for producing 100 sweaters is

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  D. 
A)  A. 
B)  B. 
C)  C. 
D)  D.

Question 12

Two university graduates, Bill and Steve, worked for an advertising agency at an annual salary of $40,000 each for 3 years after they graduated. Then, they decided to quit their jobs and start a partnership that designs and builds Web sites. They rented an office for $12,000 a year and bought capital for $30,000. To pay for the equipment, Bill and Steve borrowed money from a bank at an annual interest rate of 6 percent. During their first year of operation, the partners' total revenue was $100,000. The market value of their capital at the end of the year was $20,000. If Bill and Steve do not design Web pages, their best alternatives are to return to their previous job.
a) What is the firm's economic depreciation?
b) What are the partnership's costs?
c) What is the firm's economic profit in the first year of operation?

Accepted Answer

a) The economic depreciation of the firm

Question 13

The stockholders of a corporation have ________ liability and ________ required to pay all of the firm's losses.

Accepted Answer

A)  limited; are 
B)  limited; are not 
C)  unlimited; are 
D)  unlimited; are not 
A)  limited; are 
B)  limited; are not 
C)  unlimited; are 
D)  unlimited; are not

Question 14

You have just purchased 100 shares of the stock of Microsoft Corporation. This places you in the role of

Accepted Answer

A)  principal. 
B)  incentive system operator. 
C)  agent. 
D)  long-term contractor. 
A)  principal. 
B)  incentive system operator. 
C)  agent. 
D)  long-term contractor.

Question 15

In order to maximize profits, firms organize their production using

Accepted Answer

A)  only a command system. 
B)  only an incentive system. 
C)  a combination of command and incentive systems. 
D)  neither a command nor an incentive system. 
A)  only a command system. 
B)  only an incentive system. 
C)  a combination of command and incentive systems. 
D)  neither a command nor an incentive system.

Question 16

Taco Bell produces both tacos and burritos because when it does so, Taco Bell experiences

Accepted Answer

A)  economies of scope. 
B)  decreasing scope of costs. 
C)  increasing normal profit. 
D)  economies of scale. 
A)  economies of scope. 
B)  decreasing scope of costs. 
C)  increasing normal profit. 
D)  economies of scale.

Question 17

An electrician quits her current job, which pays $40,000 per year. She can take a job with another firm for $45,000 per year or work for herself. The opportunity cost of working for herself is

Accepted Answer

A)  $5,000. 
B)  $40,000. 
C)  $45,000. 
D)  $85,000. 
A)  $5,000. 
B)  $40,000. 
C)  $45,000. 
D)  $85,000.

Question 18

Technological efficiency necessarily means producing

Accepted Answer

A)  at minimum cost. 
B)  with the highest level technology available. 
C)  without using more inputs than necessary. 
D)  technology itself. 
A)  at minimum cost. 
B)  with the highest level technology available. 
C)  without using more inputs than necessary. 
D)  technology itself.

Question 19

A firm finds that it can produce several different goods at a lower average cost by using some of the same production facilities than it could if it produced each of the goods with separate production facilities. This firm is

Accepted Answer

A)  gaining economies of scope. 
B)  gaining economies of team production. 
C)  gaining economies of scale. 
D)  incurring diseconomies of scale. 
A)  gaining economies of scope. 
B)  gaining economies of team production. 
C)  gaining economies of scale. 
D)  incurring diseconomies of scale.

Question 20

-The table above shows sales of the firms in the pet food industry. The Herfindahl-Hirschman Index in the industry is

Accepted Answer

A)  1260. 
B)  1443. 
C)  1100. 
D)  1588. 
A)  1260. 
B)  1443. 
C)  1100. 
D)  1588.

The manufacturing sector in the United States is dominated by

A market structure in which many firms compete by making similar but slightly different products is called

Can a firm achieve technological efficiency without achieving economic efficiency?

-The table above shows sales of the firms in the chocolate industry. What type of market is this?

An advantage of the corporation over other forms of business organization is that

-The above table gives techniques that Fatz confectionery can use to produce 2,000 pounds of candy. If the cost of capital is $20 per unit and the cost of labor is $40 per unit, the economically efficient technique for producing 2000 pounds of candy is

-The table above shows techniques that can be used to produce 100 shirts. If the price of an hour of labor is $6 and the price of a unit of capital is $30, then the economically efficient technique is

Techniques that produce 100 sweaters -Using the data in the above table, if the price of an hour of labor is $10 and the price of a unit of capital is $20, then the most economically efficient technique for producing 100 sweaters is

The stockholders of a corporation have liability and required to pay all of the firm's losses.

You have just purchased 100 shares of the stock of Microsoft Corporation. This places you in the role of

In order to maximize profits, firms organize their production using

Taco Bell produces both tacos and burritos because when it does so, Taco Bell experiences

An electrician quits her current job, which pays $40,000 per year. She can take a job with another firm for $45,000 per year or work for herself. The opportunity cost of working for herself is

Technological efficiency necessarily means producing

A firm finds that it can produce several different goods at a lower average cost by using some of the same production facilities than it could if it produced each of the goods with separate production facilities. This firm is

-The table above shows sales of the firms in the pet food industry. The Herfindahl-Hirschman Index in the industry is

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 manufacturing sector in the United States is dominated by

A market structure in which many firms compete by making similar but slightly different products is called

Can a firm achieve technological efficiency without achieving economic efficiency?

-The table above shows sales of the firms in the chocolate industry. What type of market is this?

An advantage of the corporation over other forms of business organization is that

-The above table gives techniques that Fatz confectionery can use to produce 2,000 pounds of candy. If the cost of capital is $20 per unit and the cost of labor is $40 per unit, the economically efficient technique for producing 2000 pounds of candy is

-The table above shows techniques that can be used to produce 100 shirts. If the price of an hour of labor is $6 and the price of a unit of capital is $30, then the economically efficient technique is

Techniques that produce 100 sweaters -Using the data in the above table, if the price of an hour of labor is $10 and the price of a unit of capital is $20, then the most economically efficient technique for producing 100 sweaters is

The stockholders of a corporation have ________ liability and ________ required to pay all of the firm's losses.

You have just purchased 100 shares of the stock of Microsoft Corporation. This places you in the role of

In order to maximize profits, firms organize their production using

Taco Bell produces both tacos and burritos because when it does so, Taco Bell experiences

An electrician quits her current job, which pays $40,000 per year. She can take a job with another firm for $45,000 per year or work for herself. The opportunity cost of working for herself is

Technological efficiency necessarily means producing

A firm finds that it can produce several different goods at a lower average cost by using some of the same production facilities than it could if it produced each of the goods with separate production facilities. This firm is

-The table above shows sales of the firms in the pet food industry. The Herfindahl-Hirschman Index in the industry is

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

The stockholders of a corporation have liability and required to pay all of the firm's losses.