Accounting: Costs and Learning Objective

econonmMicrostintings Review Quiz Test 2 1. When is peripheral utility equal to cipher? A. When TU is postcode. B. When MU is at its maximum. C. When TU is at its maximum. D. When MU is at its minimum. The future(a) add-in shows Mias $ borderline utility for fiftys of soya milk 2. Refer to the above elude to answer this question. Suppose that Mia has a budget of $7 and the worth of a litre of soya milk is $1, what is the maximum quantity that Mia talent purchase? A. 0. B. 4 litres. C. 5 litres. D. 6 litres. E. Cannot be determined. 3. What is the train formula for MCS (marginal consumer surplus)?A. $MU- legal injury. B. footing-$MU. C. $TU-price. D. TU/price. E. TU/quantity. 4. What is the term for the difference betwixt the consumers evaluation of a product and the price which is paid for it? A. Price discrimination. B. Price elasticity of demand. C. Consumer indifference. D. Consumer surplus. 5. Refer to carry over 5. 13 to answer this question. With the consumption o f what quantity is marginal utility equal to zero. A. 1. B. 5. C. 7. D. 8. 6. You support mediocre spent both hours studying microeconomics and this has made you genuinely hungry. You have $10 to spend on a snack and decide to go to Taco Bell.Putting your newly acquired economics knowledge to use, you have actual the following table to assist with your purchase decision (a) Fill in the missing values in the table above. (b) If you bought 6 tacos and 2 burritos argon you maximising your utility? let off. beneath are some financial data for the Do Drop In convenience store. The owners have tack $40,000 into the business and they worked a descend of 80 hours during the week. savings accounts are currently paying 5. 2% pursual and the going wage rate is $8 per hour. 7. Refer to the information above to answer this question.What is the weeks economic avail for the Do Drop In? A. -$320. B. -$40. C. $280. D. $320. E. $1,050. 8. Which of the following statements about the margin al product of labour is correct? A. It may either rise or fall as to a greater extent labour is utilize. B. It always rises as more labour is used. C. It always falls as more labour is used. D. There is no relationship mingled with marginal product and labour. 9. What causes marginal address to increase? A. The advantages of the office of labour. B. The fact that ATC increases. C. Raising marginal product. D. The truth of change magnitude returns. 0. Which of the following statements regarding amount hardened monetary value is correct? A. They are constant since fixed represents are fixed. B. They are equal to average uncertain represent less average nitty-gritty cost. C. When graphed, they are a horizontal line. D. When graphed, they are a straight line which comes out of the origin. E. They fall continuously as create increases. 11. Which of the following is a protean cost? A. The leasehold cost of a building. B. Insurance on the factorys physical plant. C. Raw mater ials. D. The cost of a market placeing research report. 12.What is the sum of summarise inconstant cost and core fixed costs? A. It is equal to the sum of average product and marginal product. B. It is the sum of all marginal costs. C. It is do cost. D. It is AVC times the quantity of railroad siding. 13. Can a sloshed earn an economic loss and an accounting winnings at the same time? beg off. 14. What is meant by the term economic capacity? A. An output take aim where the satisfying is physically unable to increase output. B. The output level where average variable cost is at a minimum. C. The output level where average keep down cost is at a minimum. D. Total fixed costs are at a minimum. 5. Which of the following statements is correct if a dissipateds capacity output increases from three hundred to 600 and its total costs rise from $40,000 to $78,000? A. The firm is experiencing constant returns to scale. B. The firm is experiencing decreasing returns to scale. C. T he firm is experiencing increasing returns to scale. D. The firms long-run average cost must have go down but its short-run average cost could have either decreased or increased. 16. The existence of both economies of scale and diseconomies of scale would have what effect on the LRAC curve? A. It would make it upward-sloping. B.It would make it downward-sloping. C. It would make it an inverse U shape. D. It would give it a U shape. E. It would make it horizontal. 17. All of the following, except one, are examples of pecuniary economies of scale. Which is the censure? A. A lower interest rate paid on money borrowed. B. The ability to sell the by-products of production. C. The ability to use specialized inputs such as a robotics assembly line. D. The ability to contract lower prices by buying in bulk. 18. What is the shape of the LRAC curve for a firm enjoying diseconomies of scale? 19. Which of the following refers to the dead private-enterprise(a) firm?A. It is a price-maker . B. It is a price-taker. C. It might be either a price-maker or a price-taker. D. It is neither a price-maker nor a price-taker. 20. What is the term for the extra gross derived from the sale of one more unit? A. median(a) tax receipts. B. borderline revenue. C. Net revenue. D. Total revenue. 21. What is average revenue? A. The price multiplied by the quantity sold. B. The total revenue divided by the price. C. The extra revenue derived from the sale of one more unit. D. It is equal to the price in perfectly matched markets. 22. What is break-even output? A.The output at which the total revenue just covers a firms total fixed cost. B. The output at which the total revenue just covers a firms total variable cost. C. The output at which the total revenue just covers a firms fixed and variable costs including normal boodle. D. The output at which the firm is making zero normal kales. 23. Which of the following is the correct sequence of events following a decrease in demand for a product in a perfectly war-ridden market? A. A decrease in the price and in the total lettuce of the representative firm which causes new firms to enter the industry. B.A decrease in the price and in the total profits of the representative firm which causes firms to leave the industry. C. A decrease in the price but an increase in the total profits of the representative firm which causes new firms to enter the industry. D. An increase in the price but a decrease in the total profits of the representative firm which causes firms to leave the industry. 24. How is average revenue defined? A. It is the extra revenue derived from the sale of one more unit. B. It is the total revenue divided by the number of units sold. C. It is marginal revenue divided by the number of units sold. D.It is the sum of the marginal revenue of all units sold. 25. Which of the following markets provide the best example of a perfect aspiration? A. Automobile manufacturing. B. Restaurants. C. Oil refining . D. Wheat farming. 26. apologise why a perfectly emulous firm faces a horizontal demand curve? 27. Explain why average revenue is equal to marginal revenue for a perfectly competitive firm? 28. The deliver curve for a perfectly competitive firm is that portion of its marginal cost curve that lies above its average variable cost curve. Explain why? Micro Review Quiz Test 2 Key 1. (p. 143)When is marginal utility equal to zero?A. When TU is zero. B. When MU is at its maximum. C. When TU is at its maximum. D. When MU is at its minimum. Difficulty diffused learnedness mark 05-01 Explain the law of diminishing marginal utility. Sayre Chapter 05 11 man-made lake text issue Law of Diminishing Marginal Utility symbol Comprehension caseful pick-me-up The following table shows Mias $ marginal utility for litres of soya milk Sayre Chapter 05 2. (p. 151)Refer to the above table to answer this question. Suppose that Mia has a budget of $7 and the price of a litre of soya milk is $1 , what is the maximum quantity that Mia might purchase? A. 0. B. litres. C. 5 litres. D. 6 litres. E. Cannot be determined. Difficulty Easy acquisition impersonal 05-04 Provide a theoretical rationale for downward-sloping demand curves. Sayre Chapter 05 54 bloodline Text Topic Marginal Utility and Demand fount Computation Type tone arm 3. (p. 154)What is the correct formula for MCS (marginal consumer surplus)? A. $MU-price. B. Price-$MU. C. $TU-price. D. TU/price. E. TU/quantity. Difficulty Easy eruditeness object lens 05-05 Understand why consumers generally value a product more than the price they pay. Sayre Chapter 05 62 citation Text Topic Consumer Surplus Type definitionType Pickup 4. (p. 154)What is the term for the difference between the consumers evaluation of a product and the price which is paid for it? A. Price discrimination. B. Price elasticity of demand. C. Consumer indifference. D. Consumer surplus. Difficulty Easy information Objective 05-05 Understand why consumers generally value a product more than the price they pay. Sayre Chapter 05 63 Source Text Topic Consumer Surplus Type Definition Type Pickup Sayre Chapter 05 5. (p. 162)Refer to Table 5. 13 to answer this question. With the consumption of what quantity is marginal utility equal to zero.A. 1. B. 5. C. 7. D. 8. Difficulty Easy Learning Objective 05-02 Derive a consumers purchasing rule that ensures satisfaction is maximized. Sayre Chapter 05 91 Source Study orchestrate Topic Optimal get Rule Type Computation Type Pickup 6. (p. 145-148)You have just spent two hours studying microeconomics and this has made you very hungry. You have $10 to spend on a snack and decide to go to Taco Bell. Putting your newly acquired economics knowledge to use, you have developed the following table to assist with your purchase decision (a) Fill in the missing values in the table above. b) If you bought 6 tacos and 2 burritos are you maximizing your utility? Explain. (a) The completed table ( b) By purchasing 6 tacos and 2 burritos you are not maximizing your utility. At this level of consumption you have put yourself into the following position MU/P for tacos = -6 9 = MU/P for burritos. You can use the rational choice rule to reallocate your $10 and increase your total utility. sort of than the above allocation, you should purchase each item until your MU/P is the same for both munchies. Doing so will result in the purchase of 4 double Decker tacos and 3 chicken burrito Supremes.To see why this is the case, think about each purchase individually, and pick the item that will give you the highest MU/P. Reasoning in this way, you would make the following decisions First dollar spent on a taco Second through fourth dollars spent on one taco and one burrito one-fifth dollar spent on a taco Sixth and seventh dollars spent on a burrito Eighth through tenth dollars spent on one taco and one burrito After this allocation, the MU/P for each item is the same (and equal to 4). D ifficulty Difficult Learning Objective 05-02 Derive a consumers purchasing rule that ensures satisfaction is maximized.Sayre Chapter 05 130 Source Text Topic Optimal Purchasing Rule Type Computation Type Pickup on a lower floor are some financial data for the Do Drop In convenience store. The owners have put $40,000 into the business and they worked a total of 80 hours during the week. nest egg accounts are currently paying 5. 2% interest and the going wage rate is $8 per hour. Sayre Chapter 06 7. (p. 182)Refer to the information above to answer this question. What is the weeks economic profit for the Do Drop In? A. -$320. B. -$40. C. $280. D. $320. E. $1,050. Difficulty EasyLearning Objective 06-01 Understand how and why economists measure costs differently from how accountants do and distinguish between the accountants and economists views of profits. Sayre Chapter 06 10 Source Text Topic Explicit and Implicit be Type Computation Type Pickup 8. (p. 185)Which of the following statements about the marginal product of labour is correct? A. It may either rise or fall as more labour is used. B. It always rises as more labour is used. C. It always falls as more labour is used. D. There is no relationship between marginal product and labour.Difficulty Easy Learning Objective 06-02 Understand the crucial relationship between productivity and costs. Sayre Chapter 06 23 Source Text Topic Theory of Production Type Comprehension Type Pickup 9. (p. 194)What causes marginal cost to increase? A. The advantages of the division of labour. B. The fact that ATC increases. C. Raising marginal product. D. The law of diminishing returns. Difficulty Easy Learning Objective 06-04 List and graph the seven specific cost definitions used by economists. Sayre Chapter 06 75 Source Text Topic Total be and Average Total CostsType Comprehension Type Pickup 10. (p. 193)Which of the following statements regarding average fixed costs is correct? A. They are constant since fixed costs are fixed. B. They are equal to average variable cost less average total cost. C. When graphed, they are a horizontal line. D. When graphed, they are a straight line which comes out of the origin. E. They fall continuously as output increases. Difficulty Easy Learning Objective 06-04 List and graph the seven specific cost definitions used by economists. Sayre Chapter 06 84 Source Text Topic Total Costs and Average Total CostsType Comprehension Type Pickup 11. (p. 190)Which of the following is a variable cost? A. The leasehold cost of a building. B. Insurance on the factorys physical plant. C. Raw materials. D. The cost of a marketing research report. Difficulty Easy Learning Objective 06-03 Understand the important difference between fixed costs and variable costs. Sayre Chapter 06 86 Source Text Topic Marginal and Variable Costs Type Computation Type Pickup 12. (p. 202)What is the sum of total variable costs and total fixed costs? A. It is equal to the sum of average product and marginal product.B. It is the sum of all marginal costs. C. It is total cost. D. It is AVC times the quantity of output. Difficulty Easy Learning Objective 06-04 List and graph the seven specific cost definitions used by economists. Sayre Chapter 06 119 Source Study Guide Topic Total Costs and Average Total Costs Type Definition Type Pickup 13. (p. 182-183)Can a firm earn an economic loss and an accounting profit at the same time? Explain. Accounting profit is equal to total revenue less explicit cost and economic profits is equal to total revenue less implicit cost and explicit cost.Suppose the firm is earning an accounting profit. If implicit cost is greater than accounting profit, there will be an economic loss. Difficulty Easy Learning Objective 06-05 Explain the meaning of increasing productivity and cutting costs. Sayre Chapter 06 158 Source Text Topic Explicit and Implicit Costs Type Comprehension Type Pickup 14. (p. 210)What is meant by the term economic capacity? A. An ou tput level where the firm is physically unable to increase output. B. The output level where average variable cost is at a minimum. C. The output level where average total cost is at a minimum.D. Total fixed costs are at a minimum. Difficulty Easy Learning Objective 07-02 Understand why medium-sized firms are sometimes just as in effect(p) as big firms. Sayre Chapter 07 3 Source Text Topic Constant Returns to Scale Type Definition Type Pickup 15. (p. 213)Which of the following statements is correct if a firms capacity output increases from 300 to 600 and its total costs rise from $40,000 to $78,000? A. The firm is experiencing constant returns to scale. B. The firm is experiencing decreasing returns to scale. C. The firm is experiencing increasing returns to scale. D.The firms long-run average cost must have decreased but its short-run average cost could have either decreased or increased. Difficulty Easy Learning Objective 07-03 Understand why big firms sometimes enjoy great cost advantages. Sayre Chapter 07 17 Source Text Topic Economies of Scale Type Definition Type Pickup 16. (p. 218)The existence of both economies of scale and diseconomies of scale would have what effect on the LRAC curve? A. It would make it upward-sloping. B. It would make it downward-sloping. C. It would give it an inverse U shape. D. It would give it a U shape. E.It would make it horizontal. Difficulty Easy Learning Objective 07-06 Explain what is meant by the right size of firm. Sayre Chapter 07 46 Source Text Topic What is the Right Size of Firm? Type Comprehension Type Pickup 17. (p. 224)All of the following, except one, are examples of pecuniary economies of scale. Which is the exception? A. A lower interest rate paid on money borrowed. B. The ability to sell the by-products of production. C. The ability to use specialized inputs such as a robotics assembly line. D. The ability to obtain lower prices by buying in bulk. Difficulty EasyLearning Objective 07-03 Understand why big firms sometimes enjoy great cost advantages. Sayre Chapter 07 75 Source Study Guide Topic Economies of Scale Type Comprehension Type Pickup 18. (p. 215)What is the shape of the LRAC curve for a firm enjoying diseconomies of scale? The long-run average cost curve is upward-sloping when the firm is experiencing diseconomies of scale an increase in output will lead to an increase in the average cost. Difficulty Easy Learning Objective 07-04 Understand why firms can sometimes be alike big. Sayre Chapter 07 120 Source Text Topic Why Firms can be too BigType Comprehension Type Pickup 19. (p. 232)Which of the following refers to the perfectly competitive firm? A. It is a price-maker. B. It is a price-taker. C. It might be either a price-maker or a price-taker. D. It is neither a price-maker nor a price-taker. Difficulty Easy Learning Objective 08-02 Explain what is meant by perfect competition and the market system. Sayre Chapter 08 6 Source Text Topic Perfect Competition and the Mark et System Type Definition Type Pickup 20. (p. 239)What is the term for the extra revenue derived from the sale of one more unit? A. Average revenue. B. Marginal revenue.C. Net revenue. D. Total revenue. Difficulty Easy Learning Objective 08-03 using up two approaches to rationalize how a firm might maximize its profits. Sayre Chapter 08 12 Source Text Topic The Competitive manufacturing and Firm Type Definition Type Pickup 21. (p. 238)What is average revenue? A. The price multiplied by the quantity sold. B. The total revenue divided by the price. C. The extra revenue derived from the sale of one more unit. D. It is equal to the price in perfectly competitive markets. Difficulty Easy Learning Objective 08-03 Use two approaches to explain how a firm might maximize its profits.Sayre Chapter 08 13 Source Text Topic The Competitive Industry and Firm Type Definition Type Pickup 22. (p. 239)What is break-even output? A. The output at which the total revenue just covers a firms total f ixed cost. B. The output at which the total revenue just covers a firms total variable cost. C. The output at which the total revenue just covers a firms fixed and variable costs including normal profits. D. The output at which the firm is making zero normal profits. Difficulty Easy Learning Objective 08-03 Use two approaches to explain how a firm might maximize its profits. Sayre Chapter 08 26Source Text Topic The Competitive Industry and Firm Type Definition Type Pickup 23. (p. 254)Which of the following is the correct sequence of events following a decrease in demand for a product in a perfectly competitive market? A. A decrease in the price and in the total profits of the representative firm which causes new firms to enter the industry. B. A decrease in the price and in the total profits of the representative firm which causes firms to leave the industry. C. A decrease in the price but an increase in the total profits of the representative firm which causes new firms to enter t he industry. D.An increase in the price but a decrease in the total profits of the representative firm which causes firms to leave the industry. Difficulty Easy Learning Objective 08-06 Explain the effect of a change in market demand or market supply on both the industry and the firm. Sayre Chapter 08 100 Source Text Topic The Industry Demand and Supply Type Comprehension Type Pickup 24. (p. 260)How is average revenue defined? A. It is the extra revenue derived from the sale of one more unit. B. It is the total revenue divided by the number of units sold. C. It is marginal revenue divided by the number of units sold.D. It is the sum of the marginal revenue of all units sold. Difficulty Easy Learning Objective 08-03 Use two approaches to explain how a firm might maximize its profits. Sayre Chapter 08 106 Source Study Guide Topic The Competitive Industry and Firm Type Definition Type Pickup 25. (p. 261)Which of the following markets provide the best example of a perfect competition? A. Automobile manufacturing. B. Restaurants. C. Oil refining. D. Wheat farming. Difficulty Easy Learning Objective 08-02 Explain what is meant by perfect competition and the market system.Sayre Chapter 08 111 Source Study Guide Topic Perfect Competition Type Comprehension Type Pickup 26. (p. 237)Explain why a perfectly competitive firm faces a horizontal demand curve? In a perfectly competitive market, the individual firm has no control over price. Furthermore, the individual firm only produces a tiny fraction of the total market supply. If the individual firm sells at a higher price, nobody will buy it nor would the firm sell it at a lower price. Therefore there is only one price the market price, at which the firm can produce as much or as little as it wishes.Difficulty Moderate Learning Objective 08-03 Use two approaches to explain how a firm might maximize its profits. Sayre Chapter 08 170 Source Text Topic The Competitive Industry and Firm Type Comprehension Type Pickup 27. (p. 239)Explain why average revenue is equal to marginal revenue for a perfectly competitive firm? A perfectly competitive firm faces a perfectly elastic demand curve. It may sell as many units as it wishes at the prevailing market price, thus the revenue from the incremental sale (MR) and the revenue per unit (AR) is equal to the price.Difficulty Moderate Learning Objective 08-03 Use two approaches to explain how a firm might maximize its profits. Sayre Chapter 08 171 Source Text Topic The Competitive Industry and Firm Type Comprehension Type Pickup 28. (p. 248)The supply curve for a perfectly competitive firm is that portion of its marginal cost curve that lies above its average variable cost curve. Explain why? If the price is below average variable cost, the firm could not cover all of its variable cost. It would therefore shut down and produce nothing.If the price is equal or greater to the average variable cost, the firm will cover all of its variable cost, thus the firm will operate. Difficulty Moderate Learning Objective 08-05 Explain how a firms supply curve is derived. Sayre Chapter 08 173 Source Text Topic The Firms Supply curve Type Comprehension Type Pickup Micro Review Quiz Test 2 Summary Category ofQuestions DifficultyDifficult 1 DifficultyEasy 24 DifficultyModerate 3 LearningObjective05-01Explainthelawofdiminishingmarginalutility. 1 LearningObjective05-02Deriveaconsumerspurchasingrulethatensuressatisfactionismaximized. 1 LearningObjective05-02Deriveaconsumerspurchasingrulethatensuressatisfactionismaximized. 1 LearningObjective05-04Provideatheoreticalrationalefordownward-slopingdemandcurves. 1 LearningObjective05-05Understandwhyconsumersgenerallyvalueaproductmorethanthepricetheypay. 2 LearningObjective06-01Understandhowandwhyeconomistsmeasurecostsdifferentlyfromhowaccountantsdoanddistinguishbetweentheaccountantsandeconomistsviewsofprofits. 1 LearningObjective06-02Understandthecrucialrelationshipbetweenproductivityandcosts. 1 LearningObjec tive06-03Understandtheimportantdifferencebetweenfixedcostsandvariablecosts. 1 LearningObjective06-04Listandgraphthesevenspecificcostdefinitionsusedbyeconomists. 3 LearningObjective06-05Explainthemeaningofincreasingproductivityand cuttingcosts. 1 LearningObjective07-02Understandwhymedium-sizedfirmsaresometimesjustasefficientasbigfirms. 1 LearningObjective07-03Understandwhybigfirmssometimesenjoygreatcostadvantages. 2 LearningObjective07-04Understandwhyfirmscansometimesbetoobig. 1 LearningObjective07-06Explainwhatismeantbytherightsizeoffirm. 1 LearningObjective08-02Explainwhatismeantbyperfectcompetitionandthemarketsystem. 2 LearningObjective08-03Usetwoapproachestoexplainhowafirmmightmaximizeitsprofits. 6 LearningObjective08-05Explainhowafirmssupplycurveisderived. 1 LearningObjective08-06Explaintheeffectofachangeinmarketdemandormarketsupplyonboththeindustryandthefirm. 1 SayreChapter05 8SayreChapter06 8 SayreChapter07 5 SayreChapter08 10 SourceStudyGuide 5 SourceText 23 TopicCo nstantReturnstoScale 1 TopicConsumerSurplus 2 TopicEconomiesofScale 2 TopicExplicitandImplicitCosts 2 TopicLawofDiminishingMarginalUtility 1 TopicMarginalandVariableCosts 1 TopicMarginalUtilityandDemand 1 TopicOptimalPurchasingRule 2 TopicPerfectCompetition 1 TopicPerfectCompetitionandtheMarketSystem 1 TopicTheCompetitiveIndustryandFirm 6 TopicTheFirmsSupplycurve 1