Refer to the table below. An output level of 25 units, this firm's accounting profit is ________, and its economic profit is ________. QuantityTotal RevenueExplicit CostsImplicit Costs1050365157563620100937251251258301501619
A. zero; $8
B. $125; $113
C. zero; ?$8
D. $125; zero
Answer: C
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Explain how firms that each produce as efficiently as they can may not be equally productive
What will be an ideal response?
Answer the following statements true (T) or false (F)
1) All else equal, if a firm has complex input specifications, it is likely cost saving for the firm to buy the input for another firm. 2) All else equal, if a firm's long-run average cost curve increases as more of an input is produced and the firm requires a large quantity of the input, it is likely cost saving for the firm to buy the input from another firm. 3) All else equal, if a firm needs a small quantity of an input, it is likely to be cost saving for the firm to make the input. 4) If a firm has a long-run average cost of $4 when it produces 5,000 units of an input and has a long-run average cost of $2 when it produces $12,000 units, the firm is experiences economies of scale. 5) All else equal, the more of an input a firm needs per year, the more likely that the net present value from making the input internally is positive.
Suppose that at a bicycle shop, instead of having each worker assemble an entire bicycle themselves, one person welds the frames, another person works on the braking system, another person works on the tires, and another person works on the gears
This best demonstrates the concept of A) division of labor. B) microeconomics. C) comparative advantage. D) absolute advantage.
When the monopolist decides to supply a given amount to the market, it will:
A. set the price equal to marginal cost. B. set the price higher than what demanders are willing to pay for that amount. C. only sell that amount if it charges what the demanders are willing to pay for that amount. D. set the price lower than the demand curve to create a perceived shortage.