EBK ESSENTIALS OF ECONOMICS
7th Edition
ISBN: 8220102452107
Author: Mankiw
Publisher: CENGAGE L
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Chapter 12, Problem 1QCMC
To determine
Accounting profit and economic profit.
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QUESTION 17
Whenever marginal revenues are higher than marginal costs,
a. a firm should stop its production in order to maximize profits.
b. a firm should decrease its production in order to maximize profits.
c. a firm should increase its production in order to maximize profits.
d. none of them are correct.
Suppose that a firm produces 100 units a month and sells them all for $5 each. The explict costs of production are $200 and the implicit costs of production are $250. Based on this information, the firm has an accounting profit of ___________ and an economic profit of ___________.
a.
$450; $300
b.
$300; $50
c.
$50; $300
d.
$300; $45.
1. Maximizing profits means to ______.
a. create a balance between seeking economic profits and seeking accounting profits
b. reinvest accounting profits in an effort to increase production outputs in the long run
c. increase the difference between what is given up for inputs and what is received for outputs
d. operate in an output range in which the firm experiences constant returns to scale
2. A firm’s profits are calculated as the difference between ______.
a. all the money received for its products and all that was spent to produce them
b. the cost of producing the firm’s last unit and the firm’s average per-unit cost
c. the cost of production in the short run and the cost of production in the long run
d. the maximum market price accepted for the firm’s product and the cost to produce it
3. What is the term used to describe total revenues minus total explicit costs?
a. marginal benefits
b. economic profits
c. accounting profits
d. marginal costs
4. Which of the following must…
Chapter 12 Solutions
EBK ESSENTIALS OF ECONOMICS
Ch. 12.1 - Prob. 1QQCh. 12.2 - Prob. 2QQCh. 12.3 - Prob. 3QQCh. 12.4 - Prob. 4QQCh. 12 - Prob. 1QRCh. 12 - Prob. 2QRCh. 12 - Prob. 3QRCh. 12 - Prob. 4QRCh. 12 - Prob. 5QRCh. 12 - Prob. 6QR
Ch. 12 - Prob. 7QRCh. 12 - Prob. 8QRCh. 12 - Prob. 1QCMCCh. 12 - Prob. 2QCMCCh. 12 - Prob. 3QCMCCh. 12 - Prob. 4QCMCCh. 12 - Prob. 5QCMCCh. 12 - Prob. 6QCMCCh. 12 - Prob. 1PACh. 12 - Prob. 2PACh. 12 - Prob. 3PACh. 12 - Prob. 4PACh. 12 - Prob. 5PACh. 12 - Prob. 6PACh. 12 - Prob. 7PACh. 12 - Prob. 8PACh. 12 - Prob. 9PACh. 12 - Prob. 10PA
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