Question 1. The long-run decision is to select (Points : 1)
the desired long-run AC curve.
the desired short-run AC curve.
the desired long-run MC curve.
the desired quantity of labor to go with fixed capital.
the plant size to go with the fixed quantity of labor.
Question 2. 2. A firm that owns a car rental agency, a modeling agency, a French bakery, and a pet store is (Points : 1)
a perfect competitor.
Question 3. 3. The short run is (Points : 1)
less than six months.
more than six months, but less than a year.
in the short run, some productive resources may be fixed although some other resources may be varied.
the period of time in which all the productive resources can be varied.
the period of time in which all the inputs are fixed.
Question 4. 4. Ralph's Travel Agency had accounting profits of $50,000 and implicit costs of $30,000. What were economic profits? (Points : 1)
The amount cannot be determined from the information given.
Question 5. 5. The Southern Tree Trimming Corporation reported an accounting profit of $35,000 and a normal rate of return of 15 percent on capital and enterprise of $30,000. The opportunity cost of labor is $15,500. What is the economic profit? (Points : 1)
Question 6. 6. An example of a horizontally integrated firm is one that (Points : 1)
owns several plants, each handling a different stage of production.
produces a variety of goods and sells them in widely disparate markets.
owns several plants, each manufacturing the same product.
owns several plants in the same state.
uses highly automated assembly line techniques.
Question 7. 7. If Fred Morris buys wood and ivory every month to manufacture pianos in the plant he has leased for four years, he is operating (Points : 1)
in the long run.
without a production function.
in the short run.
a vertically integrated firm.
Question 8. 8. The cost of alternatives given up that do not carry dollar costs is (Points : 1)
not of interest to a business enterprise.
assigned a dollar value and recorded as an explicit cost.
considered an implicit cost.
part of economic profits.
Question 9. 9. A vertically integrated firm might own (Points : 1)
a ski factory, an Alpine resort hotel, and an emergency medical center.
several plants that manufacture different qualities of skis.
a ski factory, a cigar manufacturer, and a carpet factory.
several plants in different countries that manufacture skis.
Question 10. 10. Last spring, Coil Spring Co. reported that average fixed costs had increased, but average variable costs were unchanged. This indicates that (Points : 1)
marginal costs are less than average variable cost but greater than average cost.
fixed costs have increased.
output is declining.
marginal costs have increased