The average total cost curve
a. is downward sloping at all levels of output
b. is downward sloping when marginal costs are decreasing and upward sloping when marginal costs are increasing
c. is upward sloping when marginal costs are decreasing and downward sloping when marginal costs are increasing
d. does not vary with output
QUESTION 2Suppose we estimate that the demand elasticity for fine leather jackets is -.7 at their current prices. Then we know that:
a. a 1 increase in price reduces quantity sold by .7.
b. no one wants to buy leather jackets.
c. demand for leather jackets is elastic.
d. a cut in the prices will increase total revenue.
e. leather jackets are luxury items.
QUESTION 3Browsing on the Job The Dunder-Miflin Paper Company has been suffering an even greater spate of shirking by the accounting staff ever since its employees got access to the Internet on their desktop computers. Why did this not affect the sales staff as much?
QUESTION 4The marginal cost curve:
a. Declines initially as output increases and rises with further increases in output
b. Is equal to the average variable cost curve
c. Rises initially as output increases and declines with further increases in output
d. Is always constant
QUESTION 5The marginal decision rule will be replaced with the net present value rule when:
a. costs and benefits occur at approximately the same time
b. costs are incurred immediately
c. benefits are incurred immediately
d. the marginal decision rule is never replaced
QUESTION 6Promoting from Within Like most fast food restaurants, Chipotle has a high rate of employee turnover. However, for Chipotle, this occurred not only at the entry-level, server jobs, but also at the shift supervisor, store manager, and area manager levels. Why did their enactment of a policy of exclusively promoting from within the organization reduce their turnover problem in these supervisory roles?
QUESTION 7When a firm is experiencing decreasing marginal costs, it implies
a. There are diminishing marginal productivity
b. There are increasing average costs
c. There are constant marginal productivity
d. There are increasing marginal productivity
QUESTION 8Regarding demand and supply, which of the following statements is NOT correct?
a. Demand and supply simultaneously determine equilibrium market price
b. Demand expresses intentions, but supply does not
c. Demand is a potential concept distinguished from the transactional even of units sold
d. Supply is more like scenario planning for operations than for actual production
e. all of the above statements are correct
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