A firm's opportunity costs ___________________.
include explicit costs and implicit costs
increase when economies of scope exist
do not include implicit costs because implicit costs have no monetary value
equal its explicit costs
Lucinda starts a business consulting company. She makes all the business decisions and bears the risk of running the business. Lucinda expects to receive _____________________.
revenue greater than the capital investment
revenue greater than her opportunity cost
Total revenue minus the sum of implicit and explicit costs is equal to _______ profit.
Emma owns a firm that produces raincoats. Currently, Emma produces 25 raincoats a day. Emma cannot produce more raincoats in a day unless she purchases another sewing machine. Emma is _______ efficient.
All of the following statements are false except _____________________________.
economic efficiency implies technological efficiency
technological efficiency implies the lowest costs of production
economic efficiency implies maximum output with maximum inputs
technological efficiency implies economic efficiency
A major disadvantage of a proprietorship is that ____________________.
the owner's entire wealth is at risk
the firm has perpetual life
the owner has limited liability
the profits are taxed twice
The Herfindahl-Hirschman Index is smaller in _______ market than in _______ market.
a perfectly competitive; a monopolistic
a monopolistic; a monopolistic competitive
an oligopolistic; a perfectly competitive
a monopolistic; a perfectly competitive
Andy wants to purchase a golden retriever. Andy buys newspapers to read the classified advertisements and he buys dog magazines to check out the locations of golden retriever breeders. Andy has incurred the _______ costs of making a purchase.
A firm that hires various specialists to work on a range of projects experiences ________________________.
economies of scope
increasing normal profit
increasing economic profit
economies of scale
_______ coordinate most of our economic activity because firms can _______.
Firms and markets; organize efficient team production
Firms and markets; reap economies of scale
Markets; have a principal-agent problem
Firms and not markets; organize efficient team production
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