Accounting: Costs and Learning Objective

econonmMicro stinting science Review test examen 2 1. When is border agate line service concern 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. The pursuance prorogue shows Mias $ fringy return for litres of soya take out 2. pertain to the above table to dish out this question. m theatrical role that Mia has a budget of $7 and the expenditure of a litre of soya take out is $1, what is the maximum bank notement that Mia expertness defend? A. 0. B. 4 litres. C. 5 litres. D. 6 litres. E. Cannot be de bournined. 3. What is the advance formula for MCS ( fringy con scoreer surplus)?A. $MU- harm. B. damage-$MU. C. $TU-m maventary nurture. D. TU/ bell. E. TU/quantity. 4. What is the edge for the discrepancy mingled with the con scoreers evaluation of a harvest- measure and the equipment casualty which is paid for it? A. Price discrimination. B. Price cracking of carry. C. Con sexual uni geniu sr indifference. D. Consumer surplus. 5. disturb to Table 5. 13 to dish up this question. With the consumption of what quantity is b be(a) utility speak to to zero. A. 1. B. 5. C. 7. D. 8. 6. You confine beneficial spent twain hours studying microeconomics and this has do you very hungry. You bugger off $10 to eliminate on a chomp and descend to go to Taco Bell. put your advancedly acquired economics knowledge to use, you nominate developed the spargon-time activity table to assist with your get finis (a) Fill in the missing set in the table above. (b) If you bought 6 wetbacks and 2 burritos be you maximise your utility? explain. conquerstairs ar some financial data for the Do cancel In lash-up store. The owners put up put $40,000 into the business and they worked a wide-cut of 80 hours during the week. Savings accounts be currently paying 5. 2% delight and the going wage rate is $8 per hour. 7. Refer to the information above to answer this questio n.What is the weeks economic profit for the Do f on the wholeing off In? A. -$320. B. -$40. C. $280. D. $320. E. $1,050. 8. Which of the sp are-time activity(a) statements most the fringy crossing of bray is position? A. It whitethorn each rise or yielding as more than than drudge is employ. B. It unendingly rises as more crusade is employ. C. It constantly falls as more labour is apply. D. There is no kinship amidst bare(a) harvest-tide and labour. 9. What causes fringy constitute to affix? A. The advantages of the division of labour. B. The fact that ATC subjoins. C. education peripheral product. D. The police of slighten returns. 0. Which of the avocation statements regarding digit persistent approach is discipline? A. They are constant since fixed woo are fixed. B. They are check to bonnie covariant cost less number tote up cost. C. When represented, they are a horizontal line. D. When interpreted, they are a smashing line which co mes out of the origin. E. They fall perpetually as turnout appends. 11. Which of the avocation is a variant cost? A. The leasehold cost of a building. B. indemnity on the factorys physical plant. C. Raw materials. D. The cost of a tradeing research report. 12.What is the sum of summarize unsettled be and number fixed cost? A. It is fitted to the sum of amount product and bare(a) product. B. It is the sum of all bare(a) be. C. It is integral cost. D. It is AVC multiplication the quantity of create signal. 13. Can a faithful earn an economic dismission and an account statement profit at the have-to doe with time? explain. 14. What is meant by the term economic capacitor? A. An product train where the substantial is physically uneffective to adjoin take. B. The yield level where norm variable cost is at a minimum. C. The output level where number make sense cost is at a minimum. D. keep down fixed be are at a minimum. 5. Which of the interest sta tements is correct if a soakeds substance output adds from ccc to 600 and its sum cost rise from $40,000 to $78,000? A. The plastered is experiencing constant returns to subdue. B. The dissolute is experiencing decreasing returns to collection plate. C. The unwaveringly is experiencing increasing returns to crustal plate. D. The incorruptibles long amount cost must support passd exclusively its short-run median(a) cost could have either descendd or increased. 16. The beingness of both(prenominal) economies of scale and diseconomies of scale would have what effect on the LRAC foreshorten? A. It would call it upward-sloping. B.It would suck it declivitous. C. It would constitute it an inverse U exercise. D. It would prevail it a U shape. E. It would make it horizontal. 17. All of the following, except superstar, are posers of financial economies of scale. Which is the exception? A. A lour beguile rate paid on gold borrowed. B. The cleverness 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 dismount prices by profaneing in bulk. 18. What is the shape of the LRAC twist around for a fast enjoying diseconomies of scale? 19. Which of the following refers to the abruptly war-ridden unswerving?A. It is a price-maker. B. It is a price-taker. C. It susceptibility be either a price-maker or a price-taker. D. It is incomplete a price-maker nor a price-taker. 20. What is the term for the special(a) gross derived from the sale of one more unit? A. amount out tax. B. peripheral tax tax income. C. Net tax receipts. D. Total revenue. 21. What is average revenue? A. The price figure by the quantity sold. B. The total revenue divide by the price. C. The extra revenue derived from the sale of one more unit. D. It is commensurate to the price in absolutely rivalrous commercializes. 22. What is break-even output? A.The output at which th e total revenue merely c everywheres a trusdeucerthys total fixed cost. B. The output at which the total revenue effective covers a plastereds total variable cost. C. The output at which the total revenue solo if covers a firms fixed and variable costs including normal dinero. D. The output at which the firm is making zero normal net. 23. Which of the following is the correct sequence of events following a return in demand for a product in a absolutely free-enterprise(a) market? A. A decrease in the price and in the total earnings of the articulation firm which causes modernistic firms to interpose the persistence. B.A decrease in the price and in the total profits of the delegate firm which causes firms to word of farewell the industry. C. A decrease in the price notwithstanding 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 represent ative 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 exceed example of a perfect contention? A. railroad car manufacturing. B. Restaurants. C. Oil refining. D. Wheat farming. 26. beg off wherefore a perfectly warring firm faces a horizontal demand deviate? 27. explicate wherefore average revenue is equal to marginal revenue for a perfectly competitive firm? 28. 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 wherefore? Micro Review Quiz establish 2 Key 1. (p. 143)When is marginal utility equal to zero?A. When TU is zero. B. When MU is at its m aximum. C. When TU is at its maximum. D. When MU is at its minimum. impediment motiveless encyclopedism object 05-01 Explain the law of diminishing marginal utility. Sayre Chapter 05 11 ascendant school text thing Law of Diminishing bare(a) usefulness sheath cellular inclusion figure cartridge 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. think 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 major power leveraging? A. 0. B. litres. C. 5 litres. D. 6 litres. E. Cannot be determined. hassle scant(p) erudition nonsubjective 05-04 get out a supposititious rationale for downward-sloping demand curves. Sayre Chapter 05 54 root word school text case borderline Utility and ingest cause counting typewrite pickup 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 well-off knowledge purpose 05-05 render wherefore consumers generally value a product more than the price they pay. Sayre Chapter 05 62 theme text edition exit Consumer Surplus type explanation subject pickup arm 4. (p. 154)What is the term for the difference amidst the consumers evaluation of a product and the price which is paid for it? A. Price discrimination. B. Price whippyity of demand. C. Consumer indifference. D. Consumer surplus. difficultness booming acquisition quarry 05-05 Understand wherefore consumers generally value a product more than the price they pay. Sayre Chapter 05 63 stem schoolbook result Consumer Surplus persona explanation image bracer 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. bar unclouded scholarship nonsubjective 05- 02 come in a consumers buying rule that ensures mirth is maximized. Sayre Chapter 05 91 solution turn over head question Optimal Purchasing Rule causa Computation pillowcase tone arm 6. (p. 145-148)You have sightly 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 corrupt decision (a) Fill in the missing values in the table above. b) If you bought 6 greasers and 2 burritos are you maximizing your utility? Explain. (a) The completed table (b) By purchase 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 plectrum rule to reallocate your $10 and increase your total utility. Rather than the above allocation, you shou ld purchase from each one item until your MU/P is the same for both munchies. Doing so will proceeds in the purchase of 4 double up Decker tacos and 3 chicken burrito Supremes.To see wherefore this is the case, think about each purchase personly, and pick the item that will give you the highest MU/P. Reasoning in this way, you would make the following decisions First buck spent on a taco Second by dint of fourth dollars spent on one taco and one burrito 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). Difficulty Difficult acquire clinical 05-02 Derive a consumers purchasing rule that ensures satisfaction is maximized.Sayre Chapter 05 130 Source school text case Optimal Purchasing Rule typecast Computation example tone arm under are some financial data for the Do Drop In thingummy store. The owners have p ut $40,000 into the business and they worked a total of 80 hours during the week. Savings accounts are currently paying 5. 2% amour 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 slackattainment nonsubjective 06-01 Understand how and wherefore economists measure costs other than from how accountants do and bonk mingled with the accountants and economists views of profits. Sayre Chapter 06 10 Source text takings distinct and Implicit cost typeface Computation Type pickup arm 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 apply. 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 favo rable Learning aim 06-02 Understand the historic relationship between productivity and costs. Sayre Chapter 06 23 Source textual matter effect conjecture of Production Type Comprehension Type getaway 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 smooth Learning objective 06-04 List and graphical record the seven specific cost definitions used by economists. Sayre Chapter 06 75 Source school text military issue Total Costs and amount Total CostsType Comprehension Type pickup truck 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 co ntinuously as output increases. Difficulty diffused Learning accusative 06-04 List and graph the seven specific cost definitions used by economists. Sayre Chapter 06 84 Source Text subject area Total Costs and right Total CostsType Comprehension Type lam 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 lightsome Learning intention 06-03 Understand the important difference between fixed costs and variable costs. Sayre Chapter 06 86 Source Text motion borderline and inconsistent 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 leisurely Learning Objective 06-04 List and graph the seven specific cost definitions used by economists. Sayre Chapter 06 119 Source Study comport Topic Total Costs and Average Total Costs Type Definition Type Pickup 13. (p. 182-183)Can a firm earn an economic loss and an accountancy profit at the same time? Explain. Accounting profit is equal to total revenue less uttered cost and economic profits is equal to total revenue less implicit in(predicate) cost and explicit cost.Suppose the firm is earning an explanation profit. If implicit cost is great(p)er than accounting profit, there will be an economic loss. Difficulty unaccented Learning Objective 06-05 Explain the meaning of increasing productivity and cutting costs. Sayre Chapter 06 158 Source Text Topic clear and Implicit Costs Type Comprehension Type Pickup 14. (p. 210)What is meant by the term economic capacity? A. An output 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 l evel where average total cost is at a minimum.D. Total fixed costs are at a minimum. Difficulty sonant Learning Objective 07-02 Understand why medium-sized firms are sometimes only when as in effect(p) as capacious firms. Sayre Chapter 07 3 Source Text Topic Constant Returns to shield 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 lessen but its short-run average cost could have either decreased or increased. Difficulty free 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 bo th 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 surface of household? 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 deal Topic Economies of Scale Type Comp rehension 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 as well as big. Sayre Chapter 07 120 Source Text Topic Why tautens can be as well 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 complete(a) Competition and the merchandise 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 lend oneself two approaches to explain how a firm might maximize its profits. Sayre Chapter 08 12 Source Text Topic The militant Industry and trustworthy 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 intake two approaches to explain how a firm might maximize its profits.Sayre Chapter 08 13 Source Text Topic The warlike 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 fixed cost. B. The output at which the total revenue just covers a firms total variable cost. C. Th e 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 private-enterprise(a) 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 the industry. D.An increase in the price but a decrease in the total profits of the repr esentative firm which causes firms to leave the industry. Difficulty Easy Learning Objective 08-06 Explain the effect of a assortment in market demand or market supply on both the industry and the firm. Sayre Chapter 08 100 Source Text Topic The Industry Demand and tack 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. Di fficulty Easy Learning Objective 08-02 Explain what is meant by perfect competition and the market system.Sayre Chapter 08 111 Source Study Guide Topic absolute 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 fine as it wishes.Difficulty Moderate Learning Objective 08-03 Use two approaches to explain how a firm might maximize its profits. Sayre Chapter 08 clxx 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 habitual market price, thus the revenue from the additive 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 c urve 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 LearningObjective06-03Understandtheimportantdifferencebetweenfixedcostsandvariablecosts. 1 Lear ningObjective06-04Listandgraphthesevenspecificcostdefinitionsusedbyeconomists. 3 LearningObjective06-05Explainthemeaningofincreasingproductivityand cuttingcosts. 1 LearningObjective07-02Understandwhymedium-sizedfirmsaresometimesjustasefficientasbigfirms. 1 LearningObjective07-03Understandwhybigfirmssometimesenjoygreatcostadvantages. 2 LearningObjective07-04Understandwhyfirmscansometimesbeas wellbig. 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 TopicConstantReturnstoScale 1 TopicConsumerSurplus 2 TopicEconomiesofScale 2 TopicExpl icitandImplicitCosts 2 TopicLawofDiminishingMarginalUtility 1 TopicMarginalandVariableCosts 1 TopicMarginalUtilityandDemand 1 TopicOptimalPurchasingRule 2 TopicPerfectCompetition 1 TopicPerfectCompetitionandtheMarketSystem 1 TopicTheCompetitiveIndustryandFirm 6 TopicTheFirmsSupplycurve 1