1. Consider the following information about a business Diane opened last year: price=$5, quantity sold= 12,000; implicit cost=$17,000; explicit cost=$40,000. What was Diane's economic profit?A. $20,000 B. $3,000 C. 6,000 D. 43,000
2. Consider the following information about a business Diane opened last year: price=$5, quantity sold= 12,000; implicit cost=$17,000; explicit cost=$40,000. What was Diane's accounting profit?A. $20,000 B. $3,000 C. 6,000 D. 43,000
3. Which of the following statements is true?a. The short run is always somewhere between six and twelve months.b. In the short run, changes in output can only be brought about by a change in the quantity of variable inputs.c. The long run is a period of time over one yeard. In the short run, there are variable costs but no fixed costs
4. The long run average total cost curve shows the:a. lowest average variable cost at which the firm can produce any given level of output.b. lowest unit cost at which the firm can produce any given level of outputc. highest average fixed cost at which the firm can produce any given level of outputd. lowest marginal cost at which the firm can produce any given level of output
5 Economies of scale are relevant to the ______, whereas the law of diminishing returns is relevant to the _____.a. long run; short runb. short run; long runc. industry; firmd. firm; industry
6. Which of the flooding is NOT an assumption of the theory of perfect competition?
a. There are many sellers and many buyers, none of which is large in relation to total sales of purchases.
b. Each firm produces and sells a differentiated product.
c. Buyers and sellers have all relevant information with respect to prices, produce quality, and sources of supply
d. There is easy exit and entry.