econ hw 4

Chapter 9 - Refer to Table 9.1. If the market price is $42, then for this firm to maximize profits it should produce ________ units of output and its profits will be ________.

c-- six; $70

Chapter 9 - Refer to Figure 9.2. This firm will earn a zero economic profit if price is

x-- $0 C- $13

Chapter 7 - Refer to Figure 7.1. A corn producer's profit is $200 and is producing 100 bushels of corn. Then he must have a cost per bushel of ________.

x-- $2 X-- $4

Chapter 8 - Wally's Window Wipers produces 100 window wipers. Its average fixed cost is $5 and its total variable cost is $300. What is the total cost of producing 100 window wipers?

x-- $305 x-- $500 C-800

Chapter 9 - Refer to Figure 9.7. In which of the following price ranges will the firm continue to operate but at a loss?

x-- $5-$6 C-- $6-$7

Chapter 7 - You are the owner and only employee of a pizza shop. Last year you earned a total revenue of $100,000. Your costs for rent and supplies were $50,000. To start this business you invested an amount of your own capital that could pay you a return of $20,000 a year. Your economic profit last year was

c-- $30,000

Chapter 9 - Refer to Figure 9.7. Suppose demand for wheat is initially D2. If consumer incomes increase, then demand for wheat will shift to ________. This will ________ the equilibrium price of wheat, and individual profit maximizing firms will produce ________ bushels of wheat.

c-- D3; increase; 15

Chapter 8 - Refer to Table 8.1. Assuming the price of labor (L) is $5 per unit and the price of capital (K) is $10 per unit, what production technique should this firm use to produce 2 units of output?

c-- Production technique B

Chapter 9 - Assume firms break even in an industry. New firms ________ attracted to the industry and current ones ________ exiting it.

c-- are not; are not

Chapter 9 - Gary invests $100,000 in his cousin's a new deli on the promise that Gary will earn a return of 10% per year on his investment. The deli sells 52,000 sandwiches per year. The deli's fixed costs include the return to Gary and $42,000 in other fixed costs. Variable costs consist of wages ($1,000 per week) plus materials, electricity, etc. ($2,000 per week). The deli is open 52 weeks per year. What must the average price per sandwich be for the deli to earn a normal return of 10% expected by Gary?

x-- 3 C- 4

Chapter 7 - The marginal products of the first, second, and third workers are 20, 12, and 8, respectively. If four workers can produce 45 units of output, then the marginal product of the fourth worker is ________.

x-- 4 C-- 5

Chapter 8 - Refer to Figure 8.8. This farmer's profit-maximizing level of output is ________ units of output.

x-- 700 X-1400

Chapter 9 - Refer to Figure 9.2. This firm's shutdown point corresponds to Point

x-- A X-- C X- D

Chapter 9 - Refer to Figure 9.2. This firm will continue to operate in the short run, but incur an economic loss if price is

x-- between $4 and $7. C- between 7 and 13

Chapter 8 -Refer to Figure 8.5. If two ovens are produced, average variable costs are

x-- indeterminate from this information X-- $200 C-100

Chapter 8 -Refer to Figure 8.5. The average total costs are minimized when ________ ovens are produced.

x-- less than six C-- more than six

Chapter 8 -Related to the Economics in Practice on page 175: When there are a few empty seats on an airline flight, the marginal cost of adding extra passengers to occupy those seats

x-- will primarily depend on the number of passengers waiting to get the seats. X-- is generally quite high C- is probably close to zero

Chapter 9 - Refer to Figure 9.5. For this firm, diseconomies of scale set in after ________ units of output.

c-- q3

Chapter 9 - Refer to Figure 9.2. This firm's short-run supply curve is the firm's

c-- marginal cost curve above Point B.

chapter 9 - Susan borrowed $20,000 from her parents to open a bagel shop. She pays her parents a 5% yearly return on the money they lent her. Her other yearly fixed costs equal $9,000. Her variable costs equal $30,000. In her first year, Amy sold 40,000 dozen at a price of $1.50 per dozen. Susan's profit is

c-- $20,000.