21.

Larry owns his own auto repair shop, and employs three mechanics. His total parts and sales volume this year was $322,400. Because he is well known for his repair expertise, he is also paid $5,200 per year by a local radio station to answer auto repair questions on "Ask the Mechanic." His explicit costs for payroll, parts and taxes, mortgage and utilities are $290,160. Larry left a job as an accountant making $40,000 a year to own his own business. Larry's economic profit is:

A)

$32,240.

B)

$37,440.

C)

$327,600.

D)

Larry is actually experiencing an economic loss of $2,560.

22.

Which of the following is NOT typical of the long run?

A)

Firms may enter or leave the industry.

B)

A firm may add facilities.

C)

Output will vary only with changes in the labor force.

D)

The size of an industry may change.

23.

Which of the following examples represents the short run?

A)

Walmart builds another store.

B)

Ford asks its workers to work overtime.

C)

Sea-Land increases the size of its cargo fleet by 20%.

D)

A university builds two classroom buildings.

24.

If a firm can change all of its factors of production, then it is operating in:

A)

the short run.

B)

the mid-term run.

C)

the long run.

D)

balance.

25.

Marginal product is:

A)

total output divided by total input.

B)

input divided into output.

C)

the change in total output, given a change in labor input.

D)

the change in total costs, given a change in labor input.