Ch 12

2900 Words Mar 19th, 2015 12 Pages
Name: ________________________ Class: ___________________ Date: __________

ID: A

CH 12
Multiple Choice
Identify the choice that best completes the statement or answers the question.
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1. The fundamental goal of a firm is
a. different for each firm.
b. to make a quality product.
c. to maximize profit.
d. to gain market share.
e. decrease its employment of workers in order to cut its costs.
2. Lauren runs a chili restaurant in San Francisco. Her total revenue last year was $110,000. The rent on her restaurant was $48,000, her labor costs were $42,000, and her materials, food and other variable costs were
$20,000. Lauren could have worked as a biologist and earned $50,000 per year. An economist calculates
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Name: ________________________

ID: A

____ 12. The above table shows the total product schedule for Hair Today, a hair styling salon. Based on the table, the marginal product for Hair Today
a. never reaches a maximum.
b. decreases after the 1st worker.
c. reaches a maximum with the 4th worker.
d. reaches a maximum with the 3rd worker.
e. reaches a maximum with the 5th worker.
____ 13. Chuck owns a factory that produces leather footballs. His total fixed cost equaled $86,000 last year. His total cost equaled $286,000 last year. Hence Chuck's
a. total variable cost was zero.
b. incurred an economic loss.
c. total variable cost equaled $200,000.
d. total variable cost equaled $372,000.
e. None of the above answers is correct.
____ 14. If Melissa owns a software company that incurs no fixed costs, then
a. her total cost equals her total variable cost.
b. she will earn an economic profit.
c. her total variable cost is less than her total cost.
d. her total cost equals zero.
e. her marginal cost must equal zero.

____ 15. The Jerry-Berry Ice Cream Shoppe's total cost schedule is in the above table. Based on the table, the marginal cost of producing the fourth gallon of ice cream is
a. $2.
b. $3.
c. $5.
d. $8.
e. $32.

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Name: ________________________

ID: A

____ 16. Anna owns a dog grooming salon in Brunswick, Georgia. The above table has Anna's total product schedule.
Anna pays each worker $300 per week and she pays rent of $600 a week for her salon.
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