Thank you , Ch. 4 Problems & Applications 9. The technology improvements shift t

Question

Thank you , Ch. 4 Problems & Applications 9. The technology improvements shift the production function: A) Upward indicating that more resources are used to produce more output. B) Downward indicating that fewer inputs can now be used to produce any given C) Upward and the average total cost curve downward. Downward and the marginal cost curve downward. 10. Economists are defining costs as: A) Explicit and implicit costs while accountants recognize only implicit costs. B) Explicit and implicit costs while accountants recognize only explicit costs. C) Only explicit costs while accountants recognize only implicit costs. Only explicit costs while accountants recognize explicit and implicit costs. 11. Fixed costs: A) Rarely ever change unless technology improves output B) Change when the rate of output is altered. C) Are constant at all levels of output. Are equal to the total costs of production. 12. What is the marginal cost of the 120th unit of output? A) $1.20. B) $24.00. C) $120.00. D) $144.00. Ch. 4 Problems & Applications 13. are the r of a firm that earned total revenue of is $200,000; $500,000. At the same time the costs of labor economic depreciation is $50,000; normal profit is $75,000; interest rate to the bank is $25,000, and the cost of other factors of production is $100,000 What is the economic profit earned by your firm? $175,000 $50,000 $25,000 14. In the short run as more labor is used in a fixed sized plant the marginal returns decrease because: Less productive workers are hired Adding more workers exhausts the possible gains from specialization The entre r does not know how to manage more workers. r will produce more than the worker previously hired. 15. The figure shows the total product schedule for Hair Style salon. Based on this table, the marginal product for Hair Style: Reaches a maximum with 3rd worker Reaches a maximum with the 5th worker Never reaches maximum Decreases after the 1st worker

Explanation / Answer

9)

Right answer is : (C)

Production function shifts upwards and average cost shifts downwards. Same output can be accomplished with same level of inputs.

10)

Right answer is (B)

Economist includes both explicit and implicit costs while accountant does not consider implicit cost only Implicit cost such as opportunity costs are not included by accountant.

11)

Right answer is (C)

Fixed cost does not change with change in output level. It remains same in all levels of output. Firm has to bear fixed even if it stops producing.

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