Exam 10: Organizing Production

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. If Angelo switches to oak wood to fire his stove and oak costs an extra $2500 each month, but this change causes his revenues to increase to $351,000. What is Angelo's opportunity cost of production?

Economic profit is the difference between total revenue and

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

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

Industry concentration measures the extent to which

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?

Suppose that there are 10 firms in an industry, each accounting for 10 percent of industry sales. Two of these firms decide to merge. Which of the following statements about the impact of this merger is (are) INCORRECT?

A firm's market constraints include the conditions under which it can

The Herfindahl-Hirschman Index for a monopoly is

A firm with two or more owners who have unlimited liability is known as

Greg and Todd form a partnership and start a business in which each has a 50 percent share of the profit. After a year, the firm goes bankrupt and has debts of $20,000. Greg has no money, but Todd has $25,000 in the bank. Todd must pay ________ of debt.

A firm's goal is to maximize normal profit.

An advantage of the corporate form of organization is that

-The above table shows the market shares for all the landscaping services in a suburban area. The Herfindahl-Hirschman Index (HHI) equals

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

An economic profit for a self-employed entrepreneur is

A firm that is maximizing its profit

Which of the following are types of economic markets? I. perfectly competitive II) oligopoly III) monopoly IV) multilateral

"When the cost of producing a unit of a good falls as its output rate increases" is the definition of

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?