29 - H o m e w o r k : A ss i g nm e n t # 2 N a m e

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Unformatted text preview: H o m e w o r k : A ss i g nm e n t # 2 N a m e ___________________________________ MULTI P L E CHOIC E . Ch oo s e t h e o n e a l te rn at iv e t h at b e s t c o mpl ete s t h e s tate m e n t o r a n s w e r s t h e qu e s t i o n . 1 ) S u e o w n s a b a ki n g c o m p a n y . T h e c o m p a n y ' s tota l r e v e n u e f o r a m o n t h i s $4000 . T h e e x p li c i t m o n t h l y c o s t s a r e $2000 a n d i m p li c i t m o n t h l y c o s t s a r e $1000 . S u e ' s e c o n o m i c pr o f i t f o r t h e m o n t h i s e q u a l to 1 ) A ) $2000 . B) $3000 . C ) $4000 . D ) $1000 . 2 ) S h e il a ' s S p o r t s S h o p i s a v e ry p o pu l a r s p o r t i n g g oo d s s to r e , w h i c h h a s a y e a r l y r e v e n u e o f $600 , 000 . S h e il a ru n s t h e b u s i n e ss h e r s e l f . H e r a l t e r n at i v e e m p l o y m e n t o p t i o n s a r e to b e a c o ll e g e s w i mm i n g c oa c h f o r $50 , 000 p e r y e a r o r a c o n s t ru c t i o n w o r k e r f o r $40 , 000 p e r y e a r . S h e il a s p e n d s $230 , 000 pur c h a s i n g g oo d s f o r r e s a l e to h e r c u s to m e r s . S h e a l s o h a s f o ur e m p l o y ee s , w h o e a c h e a r n $25 , 000 p e r y e a r . S h e il a o w n s t h e b u il d i n g t h at h e r S p o r t s S h o p i s h o u s e d i n ! s h e r e m o d e l e d a h o u s e t h at s h e o w n s a n d t h at s h e c o u l d h a v e r e n t e d o u t f o r $20 , 000 p e r y e a r i n s t e a d . S h e il a ' s i m p li c i t c o s t s e q u a l 2 ) A ) $330 , 000 p e r y e a r . B) $70 , 000 p e r y e a r . C ) $110 , 000 p e r y e a r . D ) $90 , 000 p e r y e a r . 3 ) T h e l o n g ru n i s a t i m e f r a m e i n w h i c h 3 ) A ) t h e q u a n t i t i e s o f a ll r e s o ur c e s a r e f i x e d . B) t h e q u a n t i t i e s o f s o m e r e s o ur c e s a r e f i x e d a n d t h e q u a n t i t i e s o f ot h e r r e s o ur c e s c a n b e v a r i e d . C ) a ll c o s t s a r e s u n k c o s t s . D ) t h e q u a n t i t i e s o f a ll r e s o ur c e s c a n b e v a r i e d . 4 ) I n t h e s h o r t ru n , ( C i r c l e a ll t h at a r e c o rr e c t) 4 ) A ) a ll i n pu t s a r e v a r i a b l e . B) s o m e f i r m s e x p e r i e n c e c a n e n j o y e c o n o m i c pr o f i t . C ) T h e n u m b e r o f f i r m s i n t h e i n du s t ry i s f i x e d . D ) t h e s i z e o f t h e p l a n t i s f i x e d . 5 ) A f i r m h a s f i x e d c o s t s 5 ) A ) i n t h e s h o r t ru n a n d i n t h e l o n g ru n . B) i n t h e s h o r t ru n b u t n ot i n t h e l o n g ru n . C ) n e i t h e r i n t h e l o n g ru n n o r i n t h e s h o r t ru n . D ) i n t h e l o n g ru n b u t n ot i n t h e s h o r t ru n ....
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This note was uploaded on 03/23/2008 for the course MC 201 taught by Professor Lynnscott during the Fall '08 term at Michigan State University.

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29 - H o m e w o r k : A ss i g nm e n t # 2 N a m e

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