AnswerstotheReviewSheetforExam2

AnswerstotheReviewSheetforExam2 - Econ. 202 - Review...

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Econ. 202 - Review Questions for Exam 2 Key 1. To the economist, total cost includes: A. explicit and implicit costs, including a normal profit. B. neither implicit nor explicit costs. C. implicit, but not explicit, costs. D. explicit, but not implicit, costs. AACSB: Analytical Skills Bloom's: Knowledge Learning Objective: 8-1 McConnell - Chapter 08 #6 Topic: Costs: explicit and implicit 2. An explicit cost is: A. omitted when accounting profits are calculated. B. a money payment made for resources not owned by the firm itself. C. an implicit cost to the resource owner who receives that payment. D. always in excess of a resource's opportunity cost. AACSB: Analytical Skills Bloom's: Knowledge Learning Objective: 8-1 McConnell - Chapter 08 #9 Topic: Costs: explicit and implicit 3. Which of the following definitions is correct ? A. Accounting profit + economic profit = normal profit. B. Economic profit - accounting profit = explicit costs. C. Economic profit = accounting profit - implicit costs. D. Economic profit - implicit costs = accounting profits. AACSB: Analytical Skills Bloom's: Knowledge Learning Objective: 8-1 McConnell - Chapter 08 #13 Topic: Profits
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4. The basic characteristic of the short run is that: A. barriers to entry prevent new firms from entering the industry. B. the firm does not have sufficient time to change the size of its plant. C. the firm does not have sufficient time to cut its rate of output to zero. D. a firm does not have sufficient time to change the amounts of any of the resources it employs. AACSB: Analytical Skills Bloom's: Knowledge Learning Objective: 8-2 McConnell - Chapter 08 #24 Topic: Short run versus long run 5. The long run is characterized by: A. the relevance of the law of diminishing returns. B. at least one fixed input. C. insufficient time for firms to enter or leave the industry. D. the ability of the firm to change its plant size. AACSB: Analytical Skills Bloom's: Knowledge Learning Objective: 8-2 McConnell - Chapter 08 #31 Topic: Short run versus long run 6. Marginal product is: A. the increase in total output attributable to the employment of one more worker. B. the increase in total revenue attributable to the employment of one more worker. C. the increase in total cost attributable to the employment of one more worker. D. total product divided by the number of workers employed. AACSB: Analytical Skills Bloom's: Knowledge Learning Objective: 8-2 McConnell - Chapter 08 #32 Topic: Law of diminishing returns
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7. The law of diminishing returns indicates that: A. as extra units of a variable resource are added to a fixed resource, marginal product will decline beyond some point. B. because of economies and diseconomies of scale a competitive firm's long-run average total cost curve will be U-shaped. C.
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AnswerstotheReviewSheetforExam2 - Econ. 202 - Review...

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