Self Test


Chapter 10 Multiple Choice

Ready to complete a self-test? Answer the questions, then click the Submit for Grade button at the bottom of this page. When the next Web page displays you can view your answers and your score. If you scroll down this answer page, you can e-mail your results to yourself or your instructor, whichever best suits your situation.


1.  

A firm



2.  

The difference between explicit costs and implicit costs



3.  

Any business wanting to attract financial capital must expect to



4.  

A person starts her own business. She quits her $40,000-a-year job, rents an office for $15,000 a year, and pays wages and salaries of $50,000 a year, utilities of $4,000 a year, and materials of $20,000. She uses her own car for sales work rather than leasing an equivalent car for $6000 a year. If revenues are $140,000, her accounting profit and economic profit are respectively



5.  

A firm is making zero economic profits. From this, we know that



6.  

The goal of the firm, according to economists, is to



7.  

If the firm can vary all factors of production, it is operating



8.  

The relationship between inputs and outputs is known as



9.  

If the average product of 20 workers is 100 bushels of wheat and the average product of 21 workers of wheat is 99 bushels of wheat, then the marginal product of the 21st worker is



10.  

Refer to the table above. Of the production processes in the table, diminishing returns is illustrated in



11.  

Refer to the table above. Process E is characterized by



12.  

Refer to the table above. In process F, diminishing marginal returns begins with worker number



13.  

If marginal product is zero, we know that



14.  

Fixed costs are



15.  

Refer to the figure above. Curve (4) is the



16.  

If total costs are $50,000 when 1000 units are produced, and total costs are $50,100 when 1001 units are produced, we can conclude that



17.  

Suppose that at three units of output, average variable cost is $10,000, and average total cost is $12,000. Average fixed costs when output is four units will equal



18.  

Short-run cost relationships for a firm are



19.  

If the marginal product curve is intersecting the average product curve, we know that



20.  

Every point on the long-run average cost curve is



21.  

The law of diminishing marginal returns is responsible for



22.  

Refer to the figure above. Economies of scale exist



23.  

Refer to the figure above. Minimum efficient scale is at output rate



24.  

The main source of diseconomies of scale is



25.  

Which of the following statements is true?

Note: answer choices in this exercise are randomized.

© 2000-2001 Prentice Hall A division of Pearson Education