Exam 21: Acosts and the Supply of Goods

In 1632,the Virginia Legislature decreed that all love apples must be sold for $1 per bushel (no more,no less).At the time,Mr.McKintoch had 1,000 bushels of love apples ready for harvesting.His sunk costs were $1,100,and his total costs (including sunk costs)would have been $1,800 if he harvested.If McKintoch decided not to harvest because he did not think he could cover his total costs,he

If the CEO of a large corporation uses the corporate jet to fly friends to the Super Bowl at company expense,this is most clearly an example of

Whenever average total cost exceeds marginal cost,

Use the figure to answer the following question(s). Figure 8-1 -According to Figure 8-1,what is the firm's approximate total cost when it produces three units?

In the long run,firms in many industries often experience falling average total costs as a result of

Which of the following is true?

Mr.Jones pays his employees by the hour.He believes they purposely work slowly to maximize their personal satisfaction.What can he do to provide them with a stronger incentive to work efficiently?

In recent years,the number of farms has fallen while the average farm size has increased.What concept may explain this phenomenon?

The upward-sloping portion of a long-run average total cost curve is the result of

Figure 8-3 -Using Figure 8-3,calculate the total cost of producing four units.

When would sunk costs be irrelevant for current decision making?

Interest foregone on financial capital invested in a firm represents an economic cost

Mary owns her own business and works full time in the store without paying herself a salary.She has $20,000 of her own money invested in the store that she withdrew from her savings account,which earned 10 percent interest.She was offered a job last year making $28,000 per year but turned it down.If Mary's accounting statements show revenues of $100,000 and accounting costs of $60,000,then Mary's

Libby has a business using no owned capital and makes an accounting profit of $52,000 a year.Libby could have worked for Verizon Wireless with a pay of $35,000 a year,but she would not have had time to run her business.The economic profit from Libby's business per year is

Bart operates a lemonade stand in front of his house.His father works at the Springfield Nuclear Power Plant.Which of the following is most likely to be true?

Which of the following is true?

The AB Manufacturing Company has hired an economist to evaluate its financial situation.She explains to the board of directors that the company is making zero economic profit.Should the company go out of business?

Figure 8-12 -In Figure 8-12,which of the following would most likely cause the average total cost curve of a firm producing molded plastic chairs to shift from ATC₁ to ATC₂?

Figure 8-14 The following question(s)refer(s)to the below cost curves for one very small firm in a large market. -Refer to Figure 8-14.If the firm produces 15 units of output,its average fixed cost is

Figure 8-3 -The average variable cost (AVC)and average total cost (ATC)for a firm are indicated in Figure 8-3.If the marginal cost curve were constructed,at what output would it cross the AVC curve?