MicroEconomics - Pearson - Week 4 - Quiz
Changes in the value of a firm's stocks and bonds offer important information for a firm's managers. If the price is increasing investors are _______ and are providing information that indicates the firm's managers might want to _________ the business.
more optimistic expand
Suppose Sheri owns a restaurant that serves pizza using three inputs: workers, restaurant space (and layout), and ovens. If workers are variable, restaurant space (and layout) is variable, and ovens are variable, then Sheri is producing pizza in the
long run
For example, if the total cost of producing three units of output is $2,111 and the total cost of producing four units of output is $3,126, then the marginal cost of the fourth unit is $ __________________(Enter your response as an integer.)
$3,126
A company that provides home-care for the elderly is able to provide monthly services for 5 patients at a total cost of $5,000 and monthly services for 6 patients at a cost of $5,350. What is the marginal cost of providing monthly services for a 6th patient?
$350.00
Suppose Ford Motor Company issues bonds with a face value of $500 and an annual coupon payment of $10. What is the interest rate Ford is paying on the borrowed funds?
2%
A partnership is :
A firm owned jointly by 2 or more persons and not organized by a corporation.
List the errors in the graph to the right (where AFC is average fixed cost, AVC is average variable cost, ATC is average total cost, and MC is marginal cost).
AFC should be MC, ATC should be AVC, and AVC should be ATC
Briefly explain whether you agree with the following observation: "Technological change refers only to the introduction of new products, so it is not relevant to the operations of most firms."
Answer: Both A and B A. The statement is incorrect. Technology includes firm operations such as the training of its workers B. The statement is incorrect. Technology includes firm operations such as the speed of its machinery.
A student looks at the data in the table to the right and draws this conclusion: "The marginal product of labor is increasing for the first 3 workers hired, and then it declines for the next 3 workers. I guess each of the first 3 workers must have been hard workers. Then Jill must have had to settle for increasingly poor workers." Do you agree with the student's analysis? Briefly explain.
Answer: No. Marginal product initially increases due to specialization and then decreases due to the law of diminishing returns.
The graph to the right illustrates the long-run average cost (LRAC) curve for a firm. What is the firm's minimum efficient scale of production? Using the point drawing tool, indicate the firm's quantity and long-run average cost at the minimum efficient scale. Label your point 'E'.
E is labeled
A firm's financial statements are generally assumed to include its income statement and balance sheet. Which of the following piece of information is provided by a firm's balance sheet?
Net worth
Suppose that shortly after graduating from college you decide to start your own business. Assuming you are starting a small business and want it to be your business alone, which category of firm are you most likely to start?
Sole Propietorship
ExxonMobil is a large corporation. Who owns this company? ExxonMobil is owned by
Stockholders
Suppose you originally invested in a firm when it was small and unprofitable. Now the firm has grown to be large and profitable. Would you be better off now if you had bought the firm's stock or bonds?
Stocks
