Economics Business Profits Quiz

<p>Property taxes (B)</p> Signup and view all the answers

<p>A change in payroll taxes (B)</p> Signup and view all the answers

<p>Is a price taker (B)</p> Signup and view all the answers

<p>GM's was a short-run shutdown; Dell's was a long-run market exit (B)</p> Signup and view all the answers

<p>The expectation of profit (D)</p> Signup and view all the answers

<p>Maximize social welfare (D)</p> Signup and view all the answers

<p>They represent actual monetary payments for resources used (D)</p> Signup and view all the answers

<p>Total revenues minus total economic costs (B)</p> Signup and view all the answers

<p>The return on the next best alternative investment (C)</p> Signup and view all the answers

<p>Their economic profit is negative $1000. (A)</p> Signup and view all the answers

<p>$75,000 (B)</p> Signup and view all the answers

<p>Negative $100,000 (A)</p> Signup and view all the answers

<p>$450,000 (A)</p> Signup and view all the answers

<p>Can result in economic losses. (B)</p> Signup and view all the answers

<p>Large advertising budgets. (A)</p> Signup and view all the answers

<p>Monopoly. (C)</p> Signup and view all the answers

<p>Their individual production is insignificant relative to the production of the industry. (C)</p> Signup and view all the answers

<p>Horizontal. (A)</p> Signup and view all the answers

<p>How much output the firm should produce in the long run. (C)</p> Signup and view all the answers

<p>Product price is constant at all levels of output. (A)</p> Signup and view all the answers

<p>Total revenue exceeds total cost by the greatest amount. (B)</p> Signup and view all the answers

<p>Each unit produced will cost incrementally more. (B)</p> Signup and view all the answers

<p>Stays the same as output rises. (D)</p> Signup and view all the answers

<p>Is equal to marginal revenue. (D)</p> Signup and view all the answers

<p>Can increase its profit by decreasing output. (B)</p> Signup and view all the answers

<p>Point C. (C)</p> Signup and view all the answers

<p>The firm should produce 31 units. (D)</p> Signup and view all the answers

<ol start="31"> <li>(B)</li> </ol> Signup and view all the answers

The driving force behind businesses seeking to maximize earnings.

Direct, monetary payments for resources used in production.

Difference between total revenue and total economic costs (including implicit costs).

Difference between total revenue and explicit costs.

Opportunity costs of resources not paid for in the market but used in production.

Businesses are often driven by the desire to maximize profits, rather than solely for personal economic gain.

Expectation of profit is one of the primary reasons individuals establish their own small business.

Economic costs incorporate both explicit and implicit costs; calculating economic costs is much more complex than accounting costs.

The difference between total revenue and total economic costs, including both explicit and implicit costs.

The difference between total revenue and explicit costs only.

The total costs incurred by a firm in producing a good or service, including both explicit and implicit costs.

Direct, monetary payments for resources used in production, such as wages, rent, materials, and utilities.

The opportunity costs of resources not paid for in the market but used in production, such as the value of the owner's time or the use of their own capital.

The process of identifying opportunities, taking risks, and organizing resources to create a new or improved product, process, or service.

A market structure characterized by many firms, low entry barriers, homogeneous products, and price-taking firms.

The decisions made by a firm regarding the quantity of output to produce in both the short and long run, taking into account the various costs of production.

A decision made by a firm over a period of time in which at least one input is fixed, and others are variable.

A decision made by a firm over a period of time in which all inputs are variable, allowing for adjustments to production capacity.

A competitive firm should continue to operate in the short run as long as its marginal revenue (MR) exceeds its average variable cost (AVC).

The decision of a firm to start or expand a business, involving long-term commitments to capital and resources.

A change in payroll taxes affects both the marginal cost (MC) and average total cost (ATC) curves of a firm in the short run.

A firm operating in a market with many buyers and sellers, where each firm is a price taker and has no market power.

A decision made by a firm in the short run to temporarily cease production due to unfavorable market conditions (e.g., low prices).

A decision made by a firm to permanently leave a particular market due to persistent unfavorable conditions or lack of profitability.

A firm maximizes total profit when the difference between total revenue and total cost is the greatest.

When each additional unit of input produces a smaller increase in output, leading to higher costs for each incremental unit.

The shape of the total revenue curve indicates how price changes with increasing output.

In perfect competition, price and marginal revenue are always equal for each firm.

If a perfectly competitive firm is producing at a level where marginal cost exceeds price, it can increase profit by decreasing output.

A perfectly competitive firm maximizes profit when it produces at the level where marginal cost (MC) equals price (P).

A perfectly competitive firm should shut down in the short run if the market price is below its average variable cost (AVC).

In production, diminishing returns occur when adding more of an input results in smaller increases in output, eventually leading to a decline in output.