Microeconomics Assignment 3 Part 3

Answer the question on the basis of the following demand schedule: Refer to the data. The price elasticity of demand is unity: A. over the entire $6-$4 price range. B. in the $4-$3 price range only. C. over the entire $3-$1 price range. D. throughout the entire price range because the slope of the demand curve is constant.

B

In the diagram, the range of diminishing marginal returns is: A. 0Q3. B. Q1Q2. C. Q1Q3. D. 0Q2.

C

A supply curve that is parallel to the horizontal axis suggests that: A. a change in demand will change price in the same direction. B. the industry is organized monopolistically. C. the relationship between price and quantity supplied is inverse. D. a change in demand will change the equilibrium quantity but not price.

D

Economic profits are calculated by subtracting: A. explicit and implicit costs from total revenue. B. implicit costs from normal profits. C. explicit costs from total revenue. D. implicit costs from total revenue.

A

Refer to the information and assume the stadium capacity is 5,000. The supply of seats for the game: A. is perfectly inelastic. B. varies directly with ticket prices. C. varies inversely with ticket prices. D. is perfectly elastic.

A

The Sunshine Corporation finds that its costs are $40 when it produces no output. Its total variable costs (TVC) change with output as shown in the accompanying table. Use this information to answer the following question. Refer to the information. The total cost of producing 3 units of output is: A. $105. B. $145. C. $185. D. $65.

A

The price elasticity of demand for beef is about 0.60. Other things equal, this means that a 20 percent increase in the price of beef will cause the quantity of beef demanded to: A. increase by approximately 12 percent. B. decrease by approximately 12 percent. C. decrease by approximately 26 percent. D. decrease by approximately 32 percent.

B

If a firm decides to produce no output in the short run, its costs will be: A. zero. B. its marginal costs. C. its fixed costs. D. its variable costs.

C

Refer to the diagram and assume that price increases from $2 to $10. The coefficient of the price elasticity of supply (midpoint formula) relating to this price change is about: A. 2.5 and supply is elastic. B. 5 and supply is elastic. C. .25 and supply is inelastic. D. 1 and supply is unit elastic.

C

Refer to the diagram. At output level Q total cost is: A. 0AFQ + BCDE. B. 0BEQ. C. 0BEQ + BCDE. D. BCDE.

C

Refer to the diagram. If price falls from $10 to $2, total revenue: A. falls from A + D to B + C and demand is inelastic. B. rises from C + D to B + A and demand is elastic. C. falls from A + B to B + C and demand is inelastic. D. rises from A + B to A + B + D + C and demand is elastic.

C

The demand schedules for such products as eggs, bread, and electricity tend to be: A. of unit price elasticity. B. relatively price elastic. C. relatively price inelastic. D. perfectly price elastic.

C

Answer the question on the basis of the following cost data: Refer to the data. If the firm closed down in the short run and produced zero units of output, its total cost would be: A. zero. B. $150. C. $100. D. $50.

D

Answer the question on the basis of the following cost data: Refer to the data. The average fixed cost of producing 3 units of output is: A. $7.40. B. $6. C. $5.50. D. $8.

D

If the price elasticity of demand for a product is unity, a decrease in price will: A. have no effect upon the amount purchased. B. increase the quantity demanded but decrease total revenue. C. increase the quantity demanded and increase total revenue. D. increase the quantity demanded, but total revenue will be unchanged.

D

In the diagram, total product will be at a maximum at: A. Q2 units of labor. B. some point that cannot be determined with the above information. C. Q1 units of labor. D. Q3 units of labor.

D

Marginal cost is the: A. change in average variable cost that results from producing one more unit of output. B. change in average total cost that results from producing one more unit of output. C. rate of change in total fixed cost that results from producing one more unit of output. D. change in total cost that results from producing one more unit of output.

D

Marginal product is: A. the increase in total revenue attributable to the employment of one more worker. B. the increase in total cost attributable to the employment of one more worker. C. total product divided by the number of workers employed. D. the increase in total output attributable to the employment of one more worker.

D

Refer to the diagram. The vertical distance between ATC and AVC reflects: A. marginal cost at each level of output. B. the law of diminishing returns. C. the presence of economies of scale. D. the average fixed cost at each level of output.

D

The diagram suggests that: A. X and Y are substitute goods. B. X and Y are both normal goods. C. X and Y are both inferior goods. D. X and Y are independent goods.

D