Test 3

Refer to problems for practice 5-7(page 165). Calculate producer surplus for the free market $1350 $2700 $225 $8100

$1350

If AVC is $3 per unit of output and ATC is $5 when 2 units are produced. Find AFC of producing 2 units. $1 $2 $4 $8

$2

Output 0 1 2 3 4 5 Fixed cost (FC) $9 Variable cost (VC) $0 $5 $8 $10 $11 $12 The total cost of producing 4 units of output is: less than $9 more than $20 $9 $11 $20

$20

Refer to problems for practice 5-7(page 165). Calculate consumer surplus for the free market $1350 $2025 $2700 $3375

$2025

Refer to problems for practice 5-7(page 165). Calculate producer surplus after the price ceiling $20 $400 $800 $600

$600

Output 0 1 2 3 4 5 Fixed cost (FC) $9 Variable cost (VC) $0 $5 $8 $10 $11 $12 The average total cost (AC or ATC) of producing 2 units is: $17 per unit $8.50 per unit $4 per unit $8 per unit $9 per unit

$8.50 per unit

Refer to problems for practice 5-4b (page 162). The price elasticity of demand for good X is (before taking absolute value): -0.4411 -0.8823 -226.66 -2.26

-0.4411

The price elasticity of demand for corn is -2.0. A 10% rise in the price of corn will result in a 5% increase in the quantity of corn demanded. 20% increase in the quantity of corn demanded. 5% decrease in the quantity of corn demanded 20% decrease in the quantity of corn demanded no change in the quantity of corn demanded.

20% decrease in the quantity of corn demanded

Assume that the units of variable input in a coal-production process are 1, 2, 3, 4, and 5. The corresponding total outputs are 10, 15, 19, 22, and 24 tons, respectively. Then the marginal product of the third unit of input is: 19 tons 22 tons 3 tons 4 tons 15 tons

4 tons

Number of workers 1 2 3 4 5 6 Output 20 52 75 92 105 96 The table shows production data for a firm. If you were the owner of the firm, you would never hire ________ workers. 4 6 3 5

6

Suppose the units of variable input in a steel-production process are 1, 2,3, 4, and 5. The corresponding total outputs are 30, 34, 37, 39, and 40 tons, respectively. Then the average product of the fifth unit of input is: 8 tons 2 tons 1 ton 39 tons 40 tons

8 tons

Economists define the "long run" as a period which a firm can change the quantities of neither fixed nor variable inputs variable but not fixed inputs. all inputs used but not the quantity of output they produce fixed but not variable inputs. both fixed and variable inputs.

both fixed and variable inputs.

The price elasticity of demand is lowest for which of the following goods? Toyotas cars Fords Chevrolets

cars

Cross elasticity of demand measures the responsiveness of changes in the quantity __________ of one good to changes in __________. demanded; the price of the same good. demanded; income. demanded; the price of another good. supplied; the price of the same good.

demanded; the price of another good.

If the percentage change in quantity demanded is greater than the percentage change in price, demand is inelastic unit elastic elastic perfectly inelastic

elastic

When a variable factor of production is applied to a set of fixed factors, the marginal productivity of the variable factor will: first decline, then remain constant continually rise eventually decline first decline, then rise first rise, then remain constant

eventually decline

A good will tend to have a low price elasticity of demand if it has few substitutes a person spends a high percentage of his or her budget on it. the good is a luxury it is a luxury car

it has few substitutes

Economies and diseconomies of scale account for the shape of the marginal-cost curve long-run average-cost curve average-variable- cost curve average-fixed-cost curve average-total-cost curve

long-run average-cost curve

If quantity demanded is completely unresponsive to changes in price, demand is inelastic unit elastic elastic perfectly elastic perfectly inelastic

perfectly inelastic

When a total-product curve is increasing at an increasing rate, its corresponding marginal-product curve is: vertical horizontal falling rising negative

rising

Labor costs are part of ______ cost because they ________be varied in the short run. variable, cannot fixed, cannot variable, can fixed, can

variable, can

An example of variable cost... interest paid on borrowed money to purchase capital rent paid to landlords money spent on expanding a business wages and salaries

wages and salaries