Questions:
Question 1.In the short run, if a firm has zero output, its total cost is
equal to zero.
the same as its average variable cost.
the same as its total variable cost.
the same as its total fixed cost.
the same as its average fixed cost.
Question 2.What is one thing that entrepreneurs do NOT do?
They identify consumer demands.
They establish supply and demand.
They organize production.
They allocate resources.
They acquire assets.
Question 3.An example of a horizontally integrated firm is one that
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 4.A firm that owns a wheat farm, a grain elevator, a flour mill, a commercial bakery, and a grocery store chain is
horizontally integrated.
vertically integrated.
a monopoly.
an imperfect competitor.
a conglomerate.
Question 5.When the marginal product curve is declining because of
increasing returns, the marginal cost curve is rising.
diminishing returns, the marginal cost curve is rising.
diminishing returns, the marginal cost curve is falling.
diminishing returns, the marginal cost curve is constant.
increasing returns, the marginal cost curve is falling.
Question 6.Because of diminishing marginal product in the short run, a tripling of the total product (assuming input prices are constant) requires
a tripling of marginal cost.
a tripling of total cost.
less than a tripling of total variable cost.
increased average fixed cost.
more than a tripling of total variable cost.
Question 7.Technical efficiency is
using the least-cost method of production.
the method of production that minimizes physical usage of inputs according to some specific rule.
the process of turning inputs into outputs.
the process of minimizing output with a given level of inputs.
the method of production that uses the least labor per unit of capital.
Question 8.Economic profit is defined as
total implicit costs.
total monetary costs.
total explicit costs.
total sales - explicit costs - implicit costs.
total sales - (explicit costs + implicit costs).
Question 9.A vertically integrated firm might own
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.In the short run,
all inputs are variable.
some inputs are variable and some are fixed.
all inputs are fixed.
the time period cannot exceed one year.