Economics Final Exam [Chap. 13,16]

Accounting profit is equal to total revenue minus

Economic profit is equal to total revenue minus

Nicole owns a small pottery factory. She can make 1,000 pieces of pottery per year and sell them for €100 each. It costs Nicole €20,000 for the raw materials to produce the 1,000 pieces of pottery. She has invested €100,000 in her factory and equipment: €50,000 from her savings and €50,000 borrowed at 10 per cent. (Assume that she could have loaned her money out at 10 per cent, too.) Nicole can work at a competing pottery factory for €40,000 per year. The accounting profit at Nicole's pottery factory is

Nicole owns a small pottery factory. She can make 1,000 pieces of pottery per year and sell them for €100 each. It costs Nicole €20,000 for the raw materials to produce the 1,000 pieces of pottery. She has invested €100,000 in her factory and equipment: €50,000 from her savings and €50,000 borrowed at 10 percent (assume that she could have loaned her money out at 10 percent, too). Nicole can work at a competing pottery factory for €40,000 per year. The economic profit at Nicole's pottery factory is

If there are implicit costs of production,

If a production function exhibits diminishing marginal product, its slope

If a production function exhibits diminishing marginal product, the slope of the corresponding total-cost curve

Refer to Figure 13-1. The marginal product of labour as production moves from employing one worker to employing two workers is

Refer to Figure 13-1. The production process described above exhibits

Which of the following is a variable cost in the short run?

Refer to Figure 13-2. The average fixed cost of producing four units is

Refer to Figure 13-2. The average total cost of producing three units is

Refer to Figure 13-2. The marginal cost of changing production from three units to four units is

Refer to Figure 13-2. The efficient scale of production is

When marginal costs are below average total costs,

If marginal costs equal average total costs,

If, as the quantity produced increases, a production function first exhibits increasing marginal product and later diminishing marginal product, the corresponding marginal-cost curve will

In the long run, if a very small factory were to expand its scale of operations, it is likely that it would initially experience

The efficient scale of production is the quantity of output that minimizes

Which of the following statements is true?

Of all the costs shown below incurred by Superior Airways, which is an example of an implicit cost?

Everything that needs to be given up whenever a choice is made is called:

Accounting profit is generally ________ than economic profit, because accountants ________ implicit costs in their calculations.

The law of diminishing marginal product of labor occurs when:

The cost of raw materials will fall under the category of:

The factory rent payments made by a firm fall under the category of:

Based on the table above, what is the marginal cost of the tenth unit?

Based on the table above, if the fixed cost is $500, what is the average total cost of the fifth unit?

Based on the table above, what is the average variable cost of the fourth unit?

Economies of scale occur when ________ as the quantity of output increases.

Which of the following is NOT a characteristic of monopolistic competition?

The diagram depicting monopolistic competition in the short run:

If the average-total-cost curve of a firm in monopolistic competition happens to be above the demand curve, it means:

In the long run, firms in monopolistic competition will see their price:

If firms in monopolistic competition are enjoying positive economic profits, in the long run:

In long-run equilibrium, firms in monopolistic competition ________ than firms in perfect competition.

In long-run equilibrium in a monopolistically competitive market, the price will be equal to:

A major critique of advertising is that:

A major argument in favor of advertising is that:

According to the text, branding can be good for society because:

Which of the following is relevant to the long-run Phillips curve?

Which of the following shifts the long-run Phillips curve right?

What effect does an increase in the expected rate of inflation have on the short-run and the long-run Phillips curves?

If the sacrifice ratio is 2, how much output would be lost by reducing the inflation rate from 6 percent to 2 percent?

Suppose the Bank of Canada announced an increase in interest rates, and suppose also that people believed the Bank was serious about reducing inflation. Which of the following would occur?

Which of the following would best illustrate how the Phillips curve shows the short-run tradeoff between inflation and unemployment?

What effect will an increase in aggregate demand have?

Which of the following is a characteristic of the long-run Phillips curve?

Suppose that inflationary expectations increase. Which of the following would we expect?

Which of the following best describes the natural-rate hypothesis?

In order to reduce inflation, which of the following must an economy endure?

According to Phillips, which of the following conditions occurred in years of exceptionally high unemployment?

Which of the following events would shift the Phillips curve to the right?