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  3. Liberty ECON 213 Quiz 8 Answers Complete Solutions

Contents

  • 1 Liberty ECON 213 Quiz 8 Answers Complete Solutions
      • 1.0.1 Question 1
      • 1.0.2 Question 2
      • 1.0.3 Question 3
      • 1.0.4 Question 4
      • 1.0.5 Question 5
      • 1.0.6 Question 6
      • 1.0.7 Question 7
    • 1.1 STATUS
      • 1.1.1 Question 8
      • 1.1.2 Question 9
      • 1.1.3 Question 10
      • 1.1.4 Question 11
      • 1.1.5 Question 13
      • 1.1.6 Question 14
      • 1.1.7 Question 15
      • 1.1.8 Question 16
      • 1.1.9 Question 17
      • 1.1.10 Question 18
      • 1.1.11 Question 19
      • 1.1.12 Question 20

Liberty ECON 213 Quiz 8 Answers Complete Solutions

 

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Question 1

Accounting profit is equal to:

Question 2

In the short run, average total costs and average variable costs converge as output increases because:

Question 3

If the marginal cost curve is U­shaped:

Question 4

Darrell owns a furniture store. His total costs are $225,000 per year, and his fixed costs are $150,000 per year. This means that his variable costs are:

Question 5

If workers are unable to specialize and become more productive as more labor is hired, the amount of total output produced:

Question 6

If a firm’s long­run average total costs increase as it increases its scale of production, the firm is experiencing:

Question 7

As a firm hires more labor and each worker is able to specialize, what happens to each additional worker’s marginal productivity?

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Question 8

A firm’s accounting profit is always greater than its economic profit because:

Question 9

When the average variable cost curve is upward­sloping, what must be true about the marginal cost curve?

Question 10

Madison owns a boxing gym. She recently expanded the size of her gym by adding another boxing ring and moving into a larger building so that she can serve more clients. How would Madison know if she is experiencing economies of scale from increasing the size of her boxing gym?

Question 11

Use the following graph to answer the questions that follow.

A firm expands its scale of production and finds that its long­run average total cost curve looks like LRATC3. It might look this way because the firm:

Question 13

Every year the U.S. sugar industry, which is dominated by only a few firms, spends millions of dollars lobbying members of Congress and contributing to their reelection campaigns. It does so for both Democrats and Republicans. One goal of these contributions is the preservation of the U.S. sugar quota, which limits the importation of less expensive sugar from other countries. Ultimately, all of these activities are motivated by a desire among U.S. sugar producers to:

Question 14

Darrell is the owner of a furniture store. Last year, his total revenue was $525,000 and his total labor costs were $200,000. His overhead expenses, including insurance and legal fees, were $175,000. The rent on his building was $45,000. Darrell could earn $105,000 per year working at a nearby furniture distributor. From this information, we know that his accounting profit was:

Question 15

Which is the best example of diseconomies of scale?

Question 16

In the short run, the cost of __________ is variable, whereas the cost of __________ is fixed.

Question 17

If a firm experiences diseconomies of scale, its long­run average cost curve is:

Question 18

Darrell owns a furniture store. If he decided to expand the size of his store in order to sell more furniture, how would he know if he is experiencing diseconomies of scale?

Question 19

Which of the following is true about explicit costs?

Question 20

A firm’s production function is similar to a recipe used to make a cake in the sense that the production function shows us the combination of __________ used to produce __________.

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