ReviewCh13 - Chapter13 Multiple Choice Identify the choice...

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Chapter13 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Economists normally assume that the goal of a firm is to (i) sell as much of their product as possible. (ii) set the price of the product as high as possible. (iii) maximize profit. a. (i) and (ii) are true. b. (ii) and (iii) are true. c. (iii) is true. d. (i) and (iii) are true. ____ 2. The amount of money that a firm receives from the sale of its output is called a. total gross profit. b. total net profit. c. total revenue. d. net revenue. ____ 3. Total cost is the a. amount a firm receives for the sale of its output. b. fixed cost less variable cost. c. market value of the inputs a firm uses in production. d. quantity of output minus the quantity of inputs used to make a good. ____ 4. Susan used to work as a telemarketer, earning $25,000 per year. She gave up that job to start a catering business. In calculating the economic profit of her catering business, the $25,000 income that she gave up is counted as part of the catering firm's a. total revenue. b. opportunity costs. c. explicit costs. d. marginal costs. ____ 5. Implicit costs a. do not require an outlay of money by the firm. b. do not enter into the economist's measurement of a firm's profit. c. are also known as variable costs. d. are not part of an economist’s measurement of opportunity cost. ____ 6. Jane decides to open her own business and earns $50,000 in accounting profit the first year. When deciding to open her own business, she turned down three separate job offers with annual salaries of $30,000, $40,000, and $45,000. What is Jane's economic profit from running her own business? a. $-55,000 b. $-5,000 c. $5,000 d. $20,000 ____ 7. Which of the following expressions is correct? a. accounting profit = total revenue - explicit costs b. economic profit = total revenue - implicit costs
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c. economic profit = total revenue - explicit costs d. Both a and b are correct. ____ 8. A production function is a relationship between inputs and a. quantity of output. b. revenue. c. costs. d. profit. Table 13-1 Alyson’s Pet Sitting Service Number of Workers Output (number of pet visits) 0 0 1 20 2 45 3 60 4 70 ____ 9. Refer to Table 13-1. What is the marginal product of the second worker? a. 15 b. 20 c. 22.5 d. 25 ____ 10. Refer to Table 13-1. What is the marginal product of the third worker? a. 15 b. 20 c. 35 d. 60 ____ 11. Refer to Table 13-1. Alyson’s pet sitting service experiences diminishing marginal productivity with the addition of the a. first worker. b. second worker. c. third worker. d. fourth worker. ____ 12. Refer to Table 13-1. Suppose that Alyson’s pet sitting service has a fixed cost of $50 per month for her cell phone. Each worker costs Alyson $60 per day. What is the shape of Alyson’s total cost curve as output increases from 0 and 45? a.
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This note was uploaded on 12/02/2011 for the course ECON ECON200 taught by Professor Songhualin during the Fall '11 term at Maryland.

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ReviewCh13 - Chapter13 Multiple Choice Identify the choice...

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