Exam 10: Organizing Production

Proprietorships generally have unlimited liability, whereas partnerships and corporations have limited liability.

-The cookie industry in Eatsweetland consists of 15 firms. The industry sales are $80 million per month. The sales of the largest 5 firms are shown in the table below. The rest 10 firms have sales of $3 million each. What is the Herfindahl-Hirschman index in the market for cookies in Eatsweetland?

Any method of producing a good or service is ________. It ________ the maximum profit that a firm can make.

Which of the following costs are part of a firm's opportunity costs? I. costs for resources bought in markets II) costs for resources the firm owns III) costs for resources supplied by the owner

Which of the following pairs of market types are both characterized by having a large number of firms?

Ed is a freelance writer who could work for a newspaper at $25,000 a year but instead works for himself for $41,000 a year. His only business expenses are $1,000 for writing materials and $12,000 for rent. Ed's normal profit is $1,000. Ed's economic profit from working as a freelance writer is

In the principal-agent relationship between a bank manager and a bank teller, the manager is

A large part of the principal-agent problem stems from the desire of

-The table above shows techniques that can be used to produce 100 shirts. If the price of an hour of labor is $20 and the price of a unit of capital is $8, then the economically efficient technique is

On a national level, the concentration ratio for grocery stores is very low. But, the "true" market for grocery stores is local in nature. What limitation does the geographic market put on the measure of concentration for grocery stores?

-The above table gives techniques Jitters Coffee Company can use to package 5,000 pounds of coffee. If the cost of capital is $50 per unit and the cost of labor is $100 per unit, the economically efficient technique for packaging 5000 pounds of coffee is

If instead of working on his own as a consultant making $25,000, Joe takes a job at a bank, the $25,000 is

Proprietorships, partnerships, and corporations are the primary forms of

The type of firm that is most numerous in the United States is the

An economic profit for a self-employed entrepreneur is

The largest share of the U.S. private economy is

If an industry were perfectly competitive, the four-firm concentration ratio would be close to ________ and the Herfindahl-Hirschman index would be close to ________.

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 costs for the resources that she supplies to the business equal

Which of the following about corporations is TRUE?

Mr. Sweet opened a candy store. He rented a building for $30,000 a year. During the first year of operation, Sweet paid $40,000 to his employees, $10,000 for utilities, and $20,000 for goods he bought from other firms. His total revenue was $135,000. Sweet's best alternative to running this candy store is to work for Wal-Mart as a sales associate for $15,000 a year. What is Sweet's total opportunity cost?