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econ
| Question | Answer |
|---|---|
| An informed decision is made by: | considering both implicit and explicit costs |
| Production of a good or service has decreasing marginal cost when each additional unit produced costs: | less than the previous unit |
| Behavioral economics primarily considers: | why people sometimes make less-than-perfect choices. |
| Someone who is risk averse will sacrifice some potential economic payoff in order to: | avoid a potential loss. |
| The opportunity cost of any activity is equal to its _____. | explicit cost plus its implicit cost |
| As a firm increases its production, if marginal costs at first decrease, then become constant, and then increase, the firm's marginal cost curve will be _____. | "swoosh"-shaped |
| Suppose Pedro spends two years in college and $12,000 for tuition studying to be an accounting major. If he considers changing his mind to become an art major, then: | the two years and $12,000 are sunk costs and shouldn't affect his decision. |
| School enrollments can be expected to increase when the: | implicit cost of attending school is low. |
| Chen is selling doughnuts as a fundraiser for the Humane Society. If the marginal benefit from selling the last box of doughnuts was $5 and the marginal cost of that box was $2, Chen should: | sell more doughnuts. |
| An automatic payroll deduction savings plan is one way of addressing the problem of: | having unrealistic expectations about future behavior. |
| Which of the following decisions is LEAST likely to be successfully handled with marginal analysis? | trying to decide who to vote for in the upcoming election |
| The uncertainty involved with stock market returns explains why many investors are satisfied with lower-level returns. This illustrates the concept of: | risk aversion |
| A person who is rational will make choices so as to: | generate their most preferred outcome. |
| An input whose quantity is fixed for a period of time is known as a: | fixed input |
| According to the spreading effect, as output increases, average ________ cost decreases. | fixed |
| Average variable cost is: | Variable cost divided by quantity |
| A coffee kiosk drivethru uses coffee, beans, h2o, milk, syrups, cups, electricity, barista labor, & espresso machine to make coffee. The kiosk has space for 1 espresso machine, & the time the barista works depends on coffee demand. Variable inputs are: | water, cups, and coffee beans. |
| A source of _____ is when individual workers become more skilled and efficient at performing specialized tasks. | increasing returns to scale |
| After the point of diminishing returns, each additional worker _____. | has less of the fixed input to work with, which causes each additional worker to produce less than the previous worker |
| Which is the best example of a firm adding a fixed input? | A furniture manufacturer builds a new factory. |
| A high-tech firm has large initial start-up costs. These large initial setup costs are a source of _____. | increasing returns to scale |
| Sal owns a bakery in a building with a fixed amount of space. Sal buys baking ingredients and hires workers to help bake. In the short run, Sal's bakery: | will eventually experience diminishing marginal returns to labor if Sal hires more and more workers. |
| The upward slope of marginal cost is due to: | diminishing returns to a variable input. |
| If long-run average total cost is constant when output is increasing, then the cost curves exhibit _____ returns to scale. | constant |
| The average fixed cost curve is _____. | downward sloping |
| If four workers at Taco Land can make 200 tacos in an hour and five workers can make 240 tacos in an hour, then the marginal product of the fifth worker is: | 40 tacos |
| The relationship between the long-run industry supply curve and the short-run industry supply curve is such that: | the long-run supply curve is more elastic than the short-run supply curve. |
| In long-run equilibrium in a perfectly competitive industry, which is NOT true for all firms? | Firms will earn economic profits. |
| The short-run industry supply curve is the sum of the individual marginal cost curves, assuming that: | the number of producers is fixed. |
| Suppose that Prince Puckler's Ice Cream sells 100 cones each day. It sells each cone for $3, its average variable cost is $2.50, the marginal cost is $3, and the average total cost is $3.10. From this, one knows the firm: | is making a loss |
| The curve showing the relationship between the price of a good and the total output of the industry as a whole is known as the: | industry supply curve. |
| Which of the following is an example of a standardized product? | Corn |
| Suppose the perfectly competitive cotton-growing industry is in long-run equilibrium and no economic profits are being earned. If demand increases, firms will: | enter the industry |
| The long-run industry supply curve can slope downward if average total costs are: | decreasing |
| If costs are constant in an industry so that each firm faces the same cost structure, then the long-run industry supply curve is: | perfectly elastic |
| Long-run equilibrium in perfect competition is efficient because: | no mutually beneficial transactions go unexploited. |
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agd37449