How do you determine the optimal amount of labor to use when labor is the only variable input?

17.* How do you determine the optimal amount of labor to use when labor is the only variable input? (Points : 1)

a. MP[L]=C[L] b. MP[L]=MP[K] c. MP[L]/MP[K]=1 d. None of above

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18.* The optimal usage of two variable inputs is determined by: (Points : 1)

a. The Iso-quant for the production process b. MP[K]=MRTS C. MP[K]=MCL d. None of above

19.*

Productive activity includes all but

(Points : 1)

a. stockbrokers b. loan officers at a bank c. work around the house, which you perform d. the service industries e. none above

20.*

In a company fixed costs are $ 1300.00 per month, variable cost is $ 9.00 per hour and price charged per hour is $ 15.00 (This is a service company). Break even number of hours per month are about:

(Points : 1)

a. 650 b. 216 c. 422 d. None of above

21.* Given information in question 20 above, the degree of operating leverage at 480 hours of service sold is about: (Points : 1)

a. 2.62 b. 1.82 c. 11.82 d. 4.62 e. None of above

22.* An individual’s annual income is $100,000. The person is considering opening their own business. Expected revenues for the business, if they open it, is 2 million the first year. Salaries for employees are expected to be 1.5 million. Operating expenses (rent, supplies, etc. ) are expected to be $250,000. To start the business the individual must borrow $500,000 from the bank at an interest rate of 15%. Equipment will cost $50,000. At the end of the year, the value of the equipment will be $30,000, even though the depreciation expense for tax purposes is only $5,000 during the first year. The pre-tax accounting profit will be: (Points : 1)

a. -28,000 b. 26,000 c. 50,100 d. None of above

23.* Continue with question 23, The economic profit will be: (Points : 1)

a. 50,100 b. 80,000 c. 122,000 d. None of above

24.* If expected sales is 2,300 units and the standard deviation is 150. What is the probability of an operating loss? (Points : 1)

a. 2.28% b. 15.87% c. 50% d. Not enough information

25. Economic cost do not include the explicit costs, but only opportunity costs. (Points : 1) True False

Question 26.26. A learning curve tells you (Points : 1) a. How a 1% increase in output affects unit costs b. How a 10% invrease in output affects total cost c. How total cost decrease as output doubles d. How unit costs decrease as output doubles e. None of the above

Question 27.27. Given a 50% learning curve, where the first unit costs is $1,000, the cost of the 4th unit would be: (Points : 1) a. $800 b. $250 c. $500 d. $400 e. None of above

Question 28.28. Theoretically , in a long-run cost function: (Points : 1) a. all inputs are fixed b. all inputs are considered variable c. some inputs are always fixed d. capital and labor are always combined in fixed proportions e. b and d

Question 29.29. What method of inventory valuation should be used for economic decision-making problems? (Points : 1) a. Book value b. Original cost c. Current replacement cost d. Cost or market, whichever is lower e. Historical cost

Question 30.30. The degree of operating leverage is equal to the ______ change in __________ divided by the _______ change in _____. (Points : 1) a. percentage; sales; percentage; EBIT b. unit; sales; unit; EBIT c. percentage; EBIT; percentage; sales d. unit; EBIT; unit; sales e. None of above

Question 31.31. In the linear breakeven model, the breakeven sales volume (in dollars) is equal to fixed costs divided by: (Points : 1) a. unit selling price less unit variable cost b. contribution margin per unit c. contribution margin per unit d. target margin per unit e. none of the above

Question 32.32. In the linear break-even model, the difference between selling price per unit and variable cost per unit is referred to as: (Points : 1) a. variable margin per unit b. variable cost ratio c. contribution margin per unit d. target margin per unit e. None of the above

Question 33.33. The rate at which one input X may be substituted for another input Y in a production process, while output remains constant, is: (Points : 1) a. the slope of the isoquant curve b. the marginal rate of technical substitution c. Equal to MPX/MPY d. all of the above e. none of the above