Costs of Production Quiz

Analyzing the behavior of the firm enhances our understanding of

• what decisions lie behind the market supply curve.

• how consumers allocate their income to purchase scarce resources.

• how financial institutions set interest rates.

• whether resources are allocated fairly.

A student might describe information about the costs of production as

• dry and technical.

• boring.

• crucial to understanding firms and market structures.

• All of the above could be correct.

Tags

CCSS.RI. 9-10.2

CCSS.RI.11-12.2

CCSS.RI.8.2

CCSS.RL.11-12.2

CCSS.RL.9-10.2

A student might describe information about the costs of production as

• exciting and fresh.

• unimportant for understanding market structure.

• dry and technical.

• vibrant and enthralling.

Tags

CCSS.RI. 9-10.2

CCSS.RI.11-12.2

CCSS.RI.8.2

CCSS.RL.11-12.2

CCSS.RL.9-10.2

Which field of economics studies how the number of firms affects the prices in a market and the efficiency of market outcomes?

• macroeconomics

• industrial organization

• labor economics

• monetary economics

Economists in the field of industrial organization study how

• central banking policies affect financial markets.

• firms' demand for labor and individuals' supply of labor affect resource markets.

• firms' decisions about prices and quantities depend on market conditions.

• externalities and public goods affect the environment.

Economists assume that the typical person who starts her own business does so with the intention of

• donating the profits from her business to charity.

• capturing the highest number of sales in her industry.

• maximizing profits.

• minimizing costs.

Economists normally assume that the goal of a firm is to

• sell as much of its product as possible.

• set the price of the product as high as possible.

• maximize profit.

• (i), (ii), and (iii)

Economists normally assume that the goal of a firm is to earn

• profits as large as possible, even if it means reducing output.

• profits as large as possible, even if it means incurring a higher total cost.

• revenues as large as possible, even if it reduces profits.

• (i), (ii), and (iii)

An entrepreneur's motivation to start a business arises from

• an innate love for the type of business that he or she starts.

• a desire to earn a profit.

• an altruistic desire to provide the world with a good product.

• All of the above could be correct.

Tags

CCSS.RI.11-12.5

CCSS.RI.6.5

CCSS.RI.7.5

CCSS.RI.8.5

CCSS.RI.9-10.5

Economists normally assume that the goal of a firm is to

• maximize its total revenue.

• maximize its profit.

• minimize its explicit costs.

• minimize its total cost.