Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / University of Waterloo MICROECONO AFM101 Chapter 10 1)Flora's Flower Shop bought a new van for $35,000
University of Waterloo
MICROECONO AFM101
Chapter 10
1)Flora's Flower Shop bought a new van for $35,000.
Today, the market price of this van is $20,000. Over the years, Flora's accountant has depreciated the van by $13,000. What is the economic depreciation of the van?
The economic depreciation of the van is . A. $20,000
B. $35,000
C. $13,000
D. $15000 ? 35,000-20,000 =15,000
2) The long-run average cost curve traces out the lowest attainable of producing each output.
A. average total cost
B. average variable cost
C. average fixed cost
D. marginal cost
3) The table gives the total product schedule for Flora's Flower Shoppe.
If Flora's increases the number of workers hired from 2 to 3, what happens to the average product of labour?
If Flora's increases the number of workers hired from 3 to 4, what happens to the average product labour?
If Flora's increases the number of workers hired from 2 to 3, average product of labour . If Flora's increases the number of workers hired from 3 to 4, average product labour .
A. decreases; increases
B. decreases; decreases
C. increases; decreases
D. increases; increases
4) What is economic profit? Economic profit .
A. is equal to the return earned on average by an entrepreneur
B. can never be a negative amount
C. is equal to total revenue minus the opportunity cost of production
D. is equal to total revenue minus all of the costs of production that are paid either by cash or cheque
5) Lucinda starts a business consulting company. She makes all the business decisions and bears the risk of running the business.
What does Lucinda expect to receive? Lucinda expects to receive .
A. revenue greater than her explicit cost
B. revenue greater than the capital investment
C. normal profit
D. revenue greater than her implicit cost
6) Kay's Keyboarding company buys a new computer that Kay uses for word-processing. Complete the sentence.
Kay's opportunity cost of using the new computer is equal to the .
A. explicit rental rate
B. implicit rental rate
C. economic depreciation
D. purchase price
7) The table gives the total product schedule for Flora's Flower Shoppe.
If Flora's increases the number of workers hired from 2 to 3, what is the marginal product of labour? If Flora's increases the number of workers hired from 3 to 4, what is the marginal product of labour?
If Flora's increases the number of workers hired from 2 to 3, the marginal product of labour is
bouquets.
If Flora's increases the number of workers hired from 3 to 4, the marginal product of labour is
bouquets.
A. 190; 230
B. 70; 40
C. 70; 70
D. 50; 70
8) The past expenditure on a plant that has no resale value is called a cost.
A. misplaced
B. lost
C. vanished
D. sunk
9) The only costs that influence a firm's current decisions are .
A. the long-run cost of changing its labour inputs and the long-run cost of changing its plant
B. any sunk costs, the short-run cost of changing its labour inputs, and the long-run cost of changing its plant
C. any sunk costs, the short-run cost of changing its labour inputs and the short-run cost of changing its plant
D. the short-run cost of changing its labour inputs and the long-run cost of changing its plant
10) If diseconomies of scale are present and the firm all its inputs, its output .
A. increases; increases by the same percentage
B. halves; doubles
C. doubles; less than doubles
D. doubles; more than doubles
11) The table gives Knit-rite's short-run total cost schedule. What is the average fixed cost of producing 9 sweaters a day?
The average fixed cost of producing 9 sweaters a day is a sweater. A. $1.54
B. $2.22
C. $1.25
D. $1.11
12) The smallest quantity of output at which long-run average cost is at a minimum is a firm's
.
A. profit-maximizing output point
B. maximum efficient scale
C. minimum efficient scale
D. efficient output point
13) In a market in which the smallest output at which long-run average cost reaches its lowest level is large relative to market demand, the market is .
A. monopolistically competitive
B. experiencing growth
C. either an oligopoly or monopoly
D. perfectly competitive
14) The table gives the total product schedule for Flora's Flower Shoppe. If Flora's employs 5 workers, what is total product?
If Flora's employs 2 workers, what is total product?
If Flora's employs 5 workers, total product is bouquets an hour. If Flora's employs 2 workers, total product is bouquets an hour.
A. 125; 60
B. 115; 60
C. 125; 25
D. 5; 2
15) Complete the sentence.
The output at which average product is a maximum is the same output at which is a minimum.
A. average fixed cost
B. marginal cost
C. average variable cost
D. average total cost
16) The table gives the cost of producing T-shirts.
What is the total fixed cost and what is the marginal cost of increasing production from 10 to 12 T- shirts?
The total fixed cost is and the marginal cost of increasing production from 10 to 12 T-shirts is .
A. $20; $8
B. $20; $16
C. $56; $16
D. $8; $20
17) The U shape of the average total cost curve arises because of spreading total cost over a larger output and eventually returns.
A. fixed; diminishing
B. fixed; increasing
C. variable; diminishing
D. variable; increasing
18) The graph shows a firm's average fixed cost curve and average variable cost curve. Draw a curve that is approximately the firm's average total cost curve. Label it.
Choose the statement that is
correct.
i. TC/Q = TFC/Q + TVC/Q
ii. ATC = AVC−AFC
iii. (TC/Q−TFC/Q) increases over all values of output
iv. ATC/Q = TC
19) If total fixed cost increases, then the average total cost curve and the marginal cost curve .
i. does not shift; shifts upward
ii. does not shift; does not shift
iii. shifts upward; does not shift
iv. shifts upward; shifts upward
20. The graph shows the short-run total cost curves of Poppy Lipstick, a producer of lipsticks. Draw a point on the firm's:
1) total fixed cost curve. Label it TFC.
2) total variable cost curve. Label it TVC.
3) total cost curve. Label it TC. Choose the statement that is correct.
A. Total variable cost includes normal profit.
B. The vertical distance between curve 1 and curve 2 is total fixed cost.
C. TC = TFC − TVC
D. The quantities of fixed factors change as output changes, but their total cost per unit produced does not change.
21. If marginal cost exceeds average total cost and output increases, average total cost and average variable cost .
A. decreases; increases
B. increases; increases
C. increases; decreases
D. decreases; decreases
22. The graph shows a firm's average product curve. Draw the firm's marginal product curve. Label it.
>>> Make sure your MP curve shows initial increasing returns followed by decreasing returns. When your marginal grade exceeds your GPA, your GPA .
b. falls
c. remains constant
d. rises
e. is at a maximum
23. The table gives the cost of producing shirts.
When 5 shirts are produced, what is the average fixed cost and what is the average variable cost?
When 5 shirts are produced, the average fixed cost is and the average variable cost is .
A. $10.00; $8.40
B. $2.00; $6.40
C. $5.00; $3.00
D. $2.00; $8.50
24. Cecilia is a stockbroker who earned $150,000 in 2016.
At the beginning of 2017, Cecilia wanted to pursue a new career so she quit her job and became a personal trainer.
In her first year, she made total revenue of $75,000.
The information at the right gives details of Cecilia's first year in the personal trainer business. What is Cecilia's economic profit?
Cecilia's economic profit is__________________
25. What is the short run? What is the long run?
In economics, the short run is the time frame in which and the long run is the period of time in which .
a. the quantities of all factors of production are variable but technology is fixed; sunk costs are variable
b. the quantities of some factors of production are fixed; the quantities of all factors of production can be varied
c. the quantities of some factors of production are variable; the quantities of all factors of production are fixed
d. the quantities of all factors of production are fixed;
the quantities of all factors of production can be varied
26. Complete the sentences.
The law of diminishing returns says that as the firm uses more of , with a given quantity of ,
marginal product of the variable factor eventually diminishes.
a. a variable factor of production; the fixed factor of production
b. all factors of production; entrepreneurship
c. all factors of production; capital
d. a fixed factor of production; variable factors of production
27. Most production processes experience marginal returns initially, but all production processes eventually reach a point of marginal returns.
A. diminishing; constant
B. constant; diminishing
C. diminishing; increasing
D. increasing; diminishing
28. Complete the sentences.
The firm's production function is the relationship between the and .
A. output produced; the quantities of all inputs
B. possible range of maximum output; the quantity of variable inputs
C. the quantity of fixed inputs; the quantity of variable inputs
D. maximum output attainable; the quantities of both labour and capital
29. The production function for a water bottling firm tells us that 2 workers working with 1 bottling machine can produce 10 bottles of water in an hour, and 2 workers working with 2 bottling machines can produce 16 bottles of water.
When the firm increases the number of bottling machines from 1 to 2 and keeps the quantity of labour at 2 workers, it experiences .
A. diminishing marginal product of labour
B. diminishing marginal product of capital
C. increasing marginal product of capital
D. increasing marginal product of labour
