In the short run, which factor is not relevant in profit-maximizing output decisions? a

  In the short run, which factor is not relevant in profit-maximizing output decisions?

a. wage rates

b. raw material costs

c. mortgage costs

d. energy costs

e. market price

142.              Marginal analysis requires that business people who make production decisions always

a. know what average fixed costs are

b. remember what has happened most recently

c. remain forward looking

d. continue producing

e. remain optimistic

143.              Suppose you are viewing a graph of the total revenue generated from the sale of bananas.
                            On the horizontal axis, the numbers indicate the quantity of bananas. On the vertical axis
                            the numbers indicate total revenue. The slope of the line represents

a. b and e

b. marginal revenue

c. average variable costs

d. total revenue

e. price

144.              Suppose you are viewing a graph of the total revenue generated from the sale of bananas.
                            On the horizontal axis the numbers indicate the quantity of bananas. On the vertical axis
                            the numbers indicate total revenue. Suppose there are two lines on the graph, A and B,
                            and they only meet when quantity is zero. If, at an output of 10,000 bananas, A lies above
                            B, we can say that

a. A corresponds to more bananas than B

b. A represents average revenue at a lower price than B

c. A represents marginal revenue at a higher price than B

d. A represents total revenue at a higher price than B

e. A represents total revenue at a lower price than B

145.              If price increases by 10 percent and a firm is maximizing profits, output will

a. increase by 10 percent

b. decrease by 10 percent

c. remain unchanged

d. increase, but we don’t know by how much

e. decrease, but we don’t know by how much

146.              If marginal revenue exceeds marginal cost, profit maximizers should

a. reduce output until they are equal

b. increase output until they are equal

c. increase output until profits are zero

d. decrease output unless profits are zero

e. maintain current output

147.              Suppose a firm notices that the price it faces has doubled, but it does not change its level
                            of output. It must be the case that

a. profits have doubled

b. the marginal cost curve is falling

c. total revenue has decreased

d. the original price was less than half of the minimum of the AVC curve

e. this situation would not really occur

148.              Imagine you own a machine that produces perfectly authentic and legal $100 bills. You
                            would use this machine until

a. the bills became worthless

b. the total cost began to fall

c. the marginal cost was $100

d. the variable cost began to rise

e. the marginal revenue began to fall

149.              The lesson learned from the discussion about kibbutzim in your textbook is that
                            organizations which are controlled by people who place a low value on acquiring
                            material things

a. do not maximize profit

b. only produce enough to survive

c. cannot compete in a capitalist society

d. have religious convictions against profit

e. still maximize profit

150.              Todd owns a painting company. He needs brushes, ladders, paint, painters, and a truck in
                            order to produce even one painted house. If it takes one hour to set up and take down the
                            equipment each day, would Todd care if his employees worked an 8-hour day or a 10-
                            hour day, assuming that each hour they painted just as quickly as the previous hour?

a. no; the revenue and costs are the same every hour

b. no; especially if he pays his employees by the hour

c. there is no way to answer this question

d. yes; because he can reduce the average fixed cost of preparation and clean-up

e. yes; but only if the homeowner pays by the hour

151.              In the Perspective on profit maximization and greed, greed is regarded as

a.inherent in capitalist societies

b.an evil that must be addressed by all societies

c.an expression of behavior that can be associated with all forms of profit maximization

d.an acceptable mode of behavior in a zero-sum world

e.having no negative consequences in a zero sum world