All questions are in the pictures.

1 If a rm buys a specialized metal stamping machine that will last 4 years for $125,000 and cannot resell it, the sunk cost is $0 $31,250 $125,000 $93,750 2 Variable costs are a production expense that does not vary with output. a production expense that changes with the quantity of output produced. equal to total cost divided by the units of output produced. the amount by which a rm's cost changes if the rm produces one more unit of output. 3 Suppose the total cost of producing T-shirts can be represented as TC = 50 + 201. The marginal cost of the 5th T-shirt is 2 10 12 60 4 A rm's cost curve is determined by congressional laws. whether the rm hires engineers or not. natural laws. the rm's production function. 5 Isocost lines represent the combinations of inputs that have the same marginal cost. represent the combinations of inputs that have the same total cost. are the inverse of the isoquant lines. represent supply and demand for inputs at a given cost. 6 A cost function has economies of scale if average xed costs fall as production increases. total costs fall as production increases. the average total cost falls as production increases. it is less expensive to produce goods jointly rather than separately. 000539 0003) 000539 000539 000539 000539 000529 7 A is a governance structure where owners are not personally liable. sole proprietorship partnership mixed enterprise corporation 8 The gure to the right shows the cost curves for a competitive rm. If the rm is to earn economic prot, price must exceed $0 $5 $10 $11 9 If a protmaximizing firm finds that, at its current level of production, MR > MC, it will earn greater prots than if lV[R : MC. increase output. decrease output. shut down. 10 Market structure depends upon the ease of entry and exit. the ability of firms to differentiate their goods and services. the number of firms in the market. All of the above. 11 A horizontal demand curve for a rm implies that the rm is a monopoly. the market the rm is operating in is not competitive. the rm is selling in a competitive market. the products of that rm are very different from other rms' products. 12 The short run is a period of time in which at least one input cannot be varied. when nns are stuck with sunk costs, unlike the long run. treated the same way as the long run. a period of time when no inputs can be varied. 13 If a competitive rm nds that it maximizes short-run prots by shutting down, which of the following must be TRUE? p