Exam 21: Acosts and the Supply of Goods

Which of the following provides the strongest evidence that the corporate form of business structure is relatively efficient,particularly when business firms are large?

Figure 8-6 -At what output does the firm depicted in Figure 8-6 begin to experience diminishing marginal returns to its variable factors of production?

Sunk costs

Which of the following is characteristic of the corporate form of ownership?

If a firm increases its output and finds that its average total cost decreases as a result,this implies that

One advantage of team production over contracting out is that

Which one of the following decisions most clearly reflects a lack of understanding of the concept of sunk costs?

In order for the law of diminishing returns to be present,we must have

The sum of the explicit and implicit costs incurred in the production process is called

The long run is a period of

As output is expanded,if MC is more than ATC,

Marginal cost is best defined as

The short-run average total cost (ATC)curve of a firm will tend to be U-shaped because

If General Electric finds that when it doubles both its plant size and the amount of associated inputs,its output level does not double,then

A homeowner will be away from her house for six months.The monthly mortgage payment on the house is $300.The utilities,to be paid by the owner,cost $100 per month if the house is occupied;otherwise zero.If the owner wishes to minimize her losses from the house,she should rent the house for as much as the market will bear,as long as monthly rent is greater than which of the following? (Assume wear and tear to be zero regardless of whether the house is occupied. )(Hint: Remember the concept of sunk cost. )

The short run is a time period of insufficient length for the firm to change its

Figure 8-6 -At what output does the firm depicted in Figure 8-6 minimize its per-unit cost of production?

Mr.Hudson notes that if he produces 10 pairs of shoes per day,his average fixed cost (AFC)is $14 and his marginal cost $8;if he produces 20 pairs of shoes per day,his MC is $15.What is his AFC when output is 20 pairs of shoes per day?

Economic profit is

Fixed costs are best defined as