Question

25. Which of the following inputs is most likely to be "fixed" in the short run? a) Labor b) Capital c) Energy d) Raw material 26. Assume a factory that currently employs 25 workers is considering adding another 5 workers to its payroll. Economists would classify this as a) A short-run decision b) A long-run decision c)Neither a short-run nor long-un decision d)Both a short-run and a long-run decision 27. Which of the following is true of the typical relationship between marginal product (MP) and average product (AP)? a) If MP is greater than AP, then AP is falling b) The AP curve intersects the MP curve at minimum MP c) The MP curve intersects the AP curve at maximum AP d) If MP is less than AP, then AP is increasing 28. The "luw of diminishing returns" applies to a) The short run, but not the long run b) The long run, but not the short run c) Both the short run and the long run d) Neither the short run nor the long run 29. Which of the following is an example of an "implicit cost"? a) Interest that could have been earned on retained earnings used by the firm for finance expansion b) The payment of rent by the firm for the building in which it is housed c) The interest payment maid by the firm for funds borrowed from a bank d) The payment of wages by the firm $ 30. Suppose a sole proprietorship is earning total revenues of $10,000 and is incurring explicit it costs of $75,000. If the owner could work for another company for $30,000 a year, we would conclude that: a) The firm is incurring an economic loss b) Implicit costs are $25,000 c) The total economic costs are $100,000 d) The individual is earning an economic profit of $25,000 31. Fred is considering opening a ski shop in Colorado. Assume Fred will incur the following costs: building rent - $100,000/year, inventory = $250,000/year, energy = $50,000 year and lab (one clerk) - $10,000/year. In addition, Fred's current income as a computer programmer is $40,000 per year. Assuming Fred would earn $460,000 in revenues, he could expect to earn:

Answer 1

25.7 which of the following inputs is most likely to be fixed in the short run? 1. b) capital; since capital needs large cost- 26) Assume a factory that currently employs 25 workers is considering adding another s workers to its payroll. Economists would classify this as d? Both short ron a long run decision.

- 27) True of typical relationship between Marginal product and Arerange product e) The mp curves intersects the AP urrue at maximum A.P mp/Apa At E: max AP I AP - L 28.) The "low a diminishing returns" applies to : a] The short run but not the long run. The capital is fixed or constant in short ront only labort is increased. 29.) which of following is an implicit cost? . al Interests that could have been earned on retained earnings used by the firm for finance expansion