Exam 8: A: Costs and the Supply of Goods

You purchased an automobile a year ago for $10,000. Its current market price is $6,000, and the expected market value one year from now is $4,000. If the interest rate is 10 percent, how much will it cost you to keep the car for an additional year (over and above operation and maintenance costs)?

Which of the following would most likely cause a firm's cost curve to shift downward?

As Product Co. adds the first four workers to its production process in the short run, its output rises from 0 to 12 to 25 to 35 to 43. Addition of the fifth worker will most likely lead to an output rate

Long-run diseconomies of scale exist over the range of output for which the long-run average cost curve is

Figure 8-8 -In Figure 8-8, which output level would be most closely associated with the point where diminishing marginal returns have begun?

For a firm that wants to remain in business, which of the following costs could be avoided if it halted current production?

The average variable cost curve and average total cost curve become closer together as output increases because

When total revenue minus total economic cost is equal to zero, the firm is

Which of the following must be true if average total costs are declining?

Which of the following explains why business owners have a strong incentive to strive for operational efficiency?

Takeover bids (and the potential for such bids)

Figure 8-7 -Which of the following is true for Figure 8-7?

The three basic legal forms of business enterprise are

Ron works for Betty at Betty's Pizza Palace. Betty has many work rules, and Ron believes if there were fewer rules and more flexibility, he could do a better job. Betty probably has the rules because

Which of the following is most likely to reduce the incidence of employee shirking?

Which of the following is true?

As output rises, marginal product eventually diminishes and

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 8-4 -Using Figure 8-4, calculate the firm's total cost of producing four units of output.

Long-run economies of scale exist when the long-run average cost curve