FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 6: Cost Analysis

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Multiple Choice

Review LaterAdd Note

Review Later

The following figure shows the long-run average cost curve of a firm. Figure 6-1 -Refer to Figure 6-1.What is the quantity that the firm will produce if it is operating at minimum efficient scale?

A) 0E
B) 0A
C) 0C
D) 0D
E) 0B

F) C) and E)
G) A) and C)

Correct Answer

verified

Show Answer

Question 32

Multiple Choice

Review LaterAdd Note

Review Later

Amanda invests $500,000 in a new business venture.Which of the following correctly identifies the relevant opportunity cost that she faces?

A) The potential profits from the business
B) The discounted present value of future profits from the business
C) The rate of interest that could have been earned on $500,000
D) The probability of losing the initial investment of $500,000
E) The rate of return on $500,000 invested in the business

F) C) and E)
G) B) and C)

Correct Answer

verified

Show Answer

Question 33

Multiple Choice

Review LaterAdd Note

The following figure shows the long-run average cost curve of a firm. Figure 6-1 -Refer to Figure 6-1.The production function of the firm displays decreasing returns to scale at all levels of output between _____.

A firm produces 100 units of output at an average variable cost of $5 and incurs a total fixed cost of $700.Which of the following is true?

"All fixed costs are sunk costs and all sunk costs are fixed costs." Examine the validity of this statement.

Dana,who is a trained yoga instructor,spends 4 hours on Monday baking and packing 10 boxes of cookies.She sells the cookies for $10 a box.Given that she can also teach yoga for $80 an hour,what is her opportunity cost of baking cookies?

Which of the following is true of the long run?

A firm will continue to operate in the long run only if:

A firm produces 100 units of good A at a total cost of $1,500 and separately 200 units of good B at a cost of $2,000.By combining the production of A and B,it is possible to produce the same quantities of A and B respectively at a combined total cost of $2,800.Compute the economies of scope experienced by this firm.

Which of the following is true of a firm's fixed costs?

A firm that produces and sells toys has a factory located in New Town built on a 50,000 square feet plot of land.The following table gives information about the costs of production and output of the firm. Table 6-1 -Refer to Table 6-1.What is the average fixed cost of producing a toy?

Explain how each of the following events will affect the average and marginal cost curves of a firm: i)An increase in labor costs ii)An increase in lease payments for a facility iii)A decrease in the cost of utilities (electricity,water heat) iv)Stricter environmental regulation requiring installation of scrubbers on smokestacks

A lawyer is contemplating quitting her current job with a major corporation (where she earns an annual salary of $110,000)to open her own law firm.She estimates that the total cost of operating the office will be approximately $118,000 per year.The potential revenue is estimated as $200,000 per year.Compute her accounting cost,accounting profit,economic cost,and economic profit.