The optimal method of production maximizes cost for a given level of output.
Answer the following statement true (T) or false (F)
False
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As a firm expands its output, cost per unit of output (average cost) decreases and then increases. Average cost and output have
A) a relationship with a minimum. B) a relationship with a maximum. C) no relationship. D) a linear positive relationship.
Which of the following is an implicit cost of production?
A) interest paid on a loan to a bank B) wages paid to labor plus the cost of carrying benefits for workers C) rent that could have been earned on a building owned and used by the firm D) the utility bill paid to water, electricity, and natural gas companies
Dante has two possible routes to travel on a business trip. One is more direct but more exhausting, taking one day but with a probability of business success of 1/4. The second takes three days, but has a probability of success of 2/3
If the value of Dante's time is $1000/day, the value of the business success is $12,000, and Dante is risk neutral, A) it doesn't matter which path he takes, because he doesn't consider risk. B) he should take the 1-day trip, because he doesn't consider risk. C) he should take the 1-day trip, because $11,000 is greater than $9,000. D) he should take the 3-day trip, because it will increase his expected net revenue by $3,000. E) he should take the 3-day trip, because it will increase his expected net revenue by $5,000.
Refer to the above table. Given the demand and cost schedules, what are the maximum economic profits for this monopolist?
A) $155 B) $143 C) $175 D) $164