Assume that a cargo ship carrying the merchandise of a cloth merchant has been wrecked. Such a setback will be accounted as the merchant's:
a. sunk cost.
b. deadweight loss.
c. marginal cost.
d. opportunity cost.
A
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Refer to Table 11-9. Clock It To Me manufactures clock radios. The table above shows estimates of fixed cost per period and average variable cost for three possible plant sizes
a. You are employed as the company's cost accountant and have been asked to prepare cost estimates for various output levels for each of the three possible plant sizes. Record your calculations in the table below. Average Cost of Production 5,000 Clock Radios 8,000 Clock Radios 20,000 Clock Radios Small plant Medium plant Large plant b. For each of the three output levels, which plant size will generate the lowest average total cost of production? c. Suppose the firm currently sells 8,000 clock radios per period (using the optimal plant size for this output level). Now, however, it has just secured a long-term contract to supply 20,000 clock radios per period. In the short run, what is the average total cost of producing 20,000 clock radios? Provide a numerical value based on your answer in part a. d. What happens to average total cost of production in the long run? Provide a numerical value based on your answer in part a.
Countries with low wages will always be able to export to countries with high wages
Indicate whether the statement is true or false
A profit-maximizing firm will increase its use of capital and decrease its use of labour when the:
a) marginal product of capital is higher than the marginal product of labour. b) marginal product of capital, per dollar spent on capital, is less than the marginal product of labour, per dollar spent on labour. c) average product of capital is higher than the average product of labour. d) total product of capital is higher than the total product of labour. e) marginal product of capital, per dollar spent on capital, is greater than the marginal product of labour, per dollar spent on labour.
Which of the following is a determinant of supply?
A) tastes and preferences of consumers B) technology C) consumer income D) number of consumers