Microeconomics Assignment 3 Part 1
Answer the question on the basis of the following information: Refer to the data. When two workers are employed: A. total product is 18. B. total product cannot be determined from the information given. C. total product is 20. D. average product is 10.
A
A firm can sell as much as it wants at a constant price. Demand is thus: A. perfectly inelastic. B. relatively elastic. C. perfectly elastic. D. relatively inelastic.
C
Answer the question on the basis of the following output data for a firm. Assume that the amounts of all nonlabor resources are fixed. Refer to the data. The marginal product of the sixth worker is: A. 15 units of output. B. 180 units of output. C. 30 units of output. D. negative.
A
The price elasticity of demand of a straight-line demand curve is: A. elastic in high-price ranges and inelastic in low-price ranges. B. elastic but does not change at various points on the curve. C. 1 at all points on the curve. D. inelastic but does not change at various points on the curve.
A
Answer the question on the basis of the following cost data: Refer to the data. Total fixed cost is: A. $150.00. B. $50.00. C. $6.25. D. $100.00.
B
Answer the question on the basis of the following output data for a firm. Assume that the amounts of all nonlabor resources are fixed. Refer to the data. Diminishing marginal returns become evident with the addition of the: A. fourth worker. B. third worker. C. second worker. D. sixth worker.
B
Economic cost can best be defined as: A. any contractual obligation to labor or material suppliers. B. a payment that must be made to obtain and retain the services of a resource. C. any contractual obligation that results in a flow of money expenditures from an enterprise to resource suppliers. D. all costs exclusive of payments to fixed factors of production.
B
Refer to the diagram and assume that price increases from $2 to $10. The coefficient of price elasticity of demand (midpoint formula) relating to this change in price is about: A. 1 and demand is unit elastic. B. .25 and demand is inelastic. C. .67 and demand is inelastic. D. 1.5 and demand is elastic.
B
Refer to the diagram. For output level Q, per unit costs of B are: A. unattainable, given resource prices and the current state of technology. B. attainable and imply least-cost production of this level of output. C. unattainable and imply the inefficient use of resources. D. attainable, but imply the inefficient use of resources.
B
The following is cost information for the Creamy Crisp Donut Company :Entrepreneur's potential earnings as a salaried worker = $50,000Annual lease on building = $22,000Annual revenue from operations = $380,000Payments to workers = $120,000Utilities (electricity, water, disposal) costs = $8,000Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000Entrepreneur's forgone interest on personal funds used to finance the business = $6,000Refer to the data. Creamy Crisp's total economic costs are: A. $156,000. B. $286,000. C. $94,000. D. $150,000.
B
The long run is characterized by: A. the relevance of the law of diminishing returns. B. the ability of the firm to change its plant size. C. insufficient time for firms to enter or leave the industry. D. at least one fixed input.
B
Use the following data to answer the question: Refer to the data. Diminishing returns begin to occur with the hiring of the _________ unit of labor. A. seventh B. third C. first D. second
B
A manufacturer of frozen pizzas found that total revenue decreased when price was lowered from $5 to $4. It was also found that total revenue decreased when price was raised from $5 to $6. Thus, A. $5 is not the equilibrium price of pizza. B. the demand for pizza is elastic both above and below $5. C. the demand for pizza is elastic above $5 and inelastic below $5. D. the demand for pizza is inelastic above $5 and elastic below $5.
C
Assume a firm closes down in the short run and produces no output. Under these conditions: A. TFC is positive, but TVC and TC are zero. B. TFC, TVC, and TC will all be positive. C. TFC and TC are positive, but TVC is zero. D. TVC is positive, but TFC and TC are zero.
C
Refer to the diagram. At output level Q total fixed cost is: A. 0BEQ. B. 0BEQ - 0AFQ. C. BCDE. D. 0CDQ.
C
If a firm increases all of its inputs by 10 percent and its output increases by 15 percent, then: A. it is encountering diseconomies of scale. B. the law of diminishing returns is taking hold. C. the firm's long-run ATC curve will be rising. D. it is encountering economies of scale.
D
In the diagram, curves 1, 2, and 3 represent: A. total variable cost, total fixed cost, and total cost respectively. B. average variable cost, marginal cost, and average fixed cost respectively. C. marginal product, average variable cost, and average total cost respectively. D. total fixed cost, total variable cost, and total cost respectively.
D
Refer to the diagram. This firm's average fixed costs are: A. equal to the per unit change in MC. B. the vertical distance between AVC and MC. C. not shown. D. the vertical distance between AVC and ATC.
D
The basic characteristic of the short run is that: A. the firm does not have sufficient time to cut its rate of output to zero. B. barriers to entry prevent new firms from entering the industry. C. a firm does not have sufficient time to change the amounts of any of the resources it employs. D. the firm does not have sufficient time to change the size of its plant.
D
Refer to the short-run production and cost data. In Figure A curve (1) is: A. average product and curve (2) is marginal product. B. marginal product and curve (2) is average product. C. total product and curve (2) is marginal product. D. total product and curve (2) is average product.
A