1.A restaurant owner just found out that his pizza bistro is losing money. What
ID: 1110712 • Letter: 1
Question
1.A restaurant owner just found out that his pizza bistro is losing money. What is one possible explanation for this loss?
The costs and the revenue aren’t both being maximized.
E The costs and the revenue aren’t both being minimized.
2.
When a firm grows larger, many additional layers of managers are sometimes added that do not actually produce any output. At the same time, the firm gains additional bargaining power over the prices it pays to its suppliers. If both of these factors have an equal effect, we would expect this firm to experience
E increasing marginal returns.
3.Refer to the following table. What is the total cost of producing five units of the good?
4. One benefit from tariffs would be
E more imports into the country.
5.
By reducing trade barriers, the government
E decreases deadweight loss.
6.
Suppose a perfectly competitive broccoli farm can produce 35 crates at an output level where marginal revenue equals marginal cost. The price per crate of broccoli is $25 and the average total cost is $30. What is the total profit or loss that this farm is earning?
A The revenue isn’t being maximized.Explanation / Answer
(1) (A)
Reason in order to earn profit revenue should be maximized and cost should be minimized so option A is looking correct but cost minimization point is not mention clearly so option A is correct.
(2) (c ) constant returns to scale.
reason both the factor nullifies the effects of each other as managerial inefficiency will decrease the effect of external economies of scale in form of bargaining power so constant return to scale is expected.
3) (B)
4) (D) the protection of domestic businesses.
it will provide protection to domestic business from foreign competition as they would maintain the employment, income and output.
5) (c)
by removing trade barriers government can rise import and reduce to export as they will increase stiff competition for domestic producer , they will produce less and export less.
6 ) (B) -$175.00
reason profit = TR- TC
= 35*25 - 35* 30
= 875 -1050
= $ -175.00
Output Total Fixed Cost Total Variable Cost Total Cost Average Fixed Cost Average Variable Cost Average Total Cost Marginal Cost 1 $500 $200 700 $500 $200 700 — 2 $500 $300 $800 $250 $150 400 $100 3 $500 $375 $875 $167 $125 291.66667 $75 4 $500 $425 $925 $125 $106 231.25 $50 5 $500 450 950 $100 $90 190 $25 6 $500 $450 $950 $83 $75 158.33333 $0Related Questions
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