Study guide

>9 an STE" Which one ofthe following is the efficient scale of operation for XYZ auto trader? 20 automobile sold 30 automobile sold 40 automobile sold 50 automobile sold To answer questions 10-13, use the following information for Judy's wonderful Taco, a taco stand that has been a city center institution for 40 years. Cost ofsupplies and other material $10,000 Rent $20,000 'I EST, ECUN 1501 Wages paid $25,000 Interest on a $10,000 bank loan $1,000 ludy's salary offer from a competitor $20,000 10. 9.0.5.9: 9.05:9: 14. a. b. c. d. 15. a. b. c. d. Which one ofthe following is the total explicit (accounting) cost of running Iudy's Taco? $1 1,000 $36,000 $56,000 $76,000 .Which one ofthe following is the total opportunity [economic) cost of running ludy's Taco? $3 6,000 $56,000 $75,000 $76,000 .lqudy pays off the bank loan and invests $10,000 of her own money in the business, thus giving up the chance to earn $1,000 in interest elsewhere, which one of the following will occur? Accounting and economic costs will both rise by $1,000. Accounting and economic costs will both fall by $1,000. Accounting cost will fall by $1,000, but economic cost will not change. Accounting cost will not change, but economic cost will fall by $1,000. .lqudy has a job offer of $50,000 per year to manage his competitor's business, which one of the following will occur? The implicit cost of staying in business will rise. The explicit cost of staying in business will rise The implicit cost of staying in business will fall. The explicit cost of staying in business will fall The efficient scale ofthe firm is the quantity of output that minimizes Average variable cost Average total cost. Marginal cost. Average fixed cost. With the law of diminishing returns, which ofthe following occurs as output increases in the short run? Fixed cost will eventually fall. Fixed cost will eventually rise. Marginal cost will eventually fall. Marginal cost will eventually rise