Econ practice final

Figure 10-13. On the graph, Q represents the quantity of plastics and P represents the price of plastics. Refer to Figure 10-13. In order to reach the social optimum, the government could impose a tax of $2 per unit on plastics. impose a tax of $6 per unit on plastics. Correct! impose a tax of $8 per unit on plastics. offer a subsidy of $6 per unit on plastics.

impose a tax of $8 per unit on plastics

Linda's Autoplex performs oil changes on automobiles, light trucks, and sport utility vehicles. She is a profit-maximizing business owner whose firm operates in a competitive market. The marginal cost of an oil change is $10. The marginal productivity of the last worker that Linda hired was 1.5 oil changes per hour. What is the maximum hourly wage that Linda was willing to pay the last worker hired? $10 Correct! $15 $20 $30

$15

Figure 10-13. On the graph, Q represents the quantity of plastics and P represents the price of plastics. Refer to Figure 10-13. If the government imposed a corrective tax that successfully moved the market from the market equilibrium to the social optimum, then tax revenue for the government would amount to $1,250. $1,600. Correct! $2,000. $2,500.

$2,000.

Diane's Auto World installs tires on automobiles, light trucks, and sport utility vehicles. She is a profit-maximizing business owner whose firm operates in a competitive market. The marginal cost of installing a tire is $20. The marginal productivity of the last worker that Diane hired was 2 tires per hour. What is the maximum hourly wage that Diane was willing to pay the last worker hired? $10 $20 Correct! $40 There is insufficient information to answer this question.

$40

Suppose that eight workers can manufacture 70 radios per day and that nine workers can manufacture 90 radios per day. If radios can be sold for $20 each, the value of marginal product of the ninth worker is 20 radios. 90 radios. $200. Correct! $400.

$400

Table 10-5 The following table shows the marginal costs for each of four firms (A, B, C, and D) to eliminate units of pollution from their production processes. For example, for Firm A to eliminate one unit of pollution, it would cost $54, and for Firm A to eliminate a second unit of pollution it would cost an additional $67. Firm Unit to be eliminated A B C D First unit 54 57 54 62 Second unit 67 68 66 73 Third unit 82 86 82 91 Fourth unit 107 108 107 111 Refer to Table 10-5. If the government charged a fee of $69 per unit of pollution, how many units of pollution would the firms eliminate altogether? Correct! 7 8 9 10

7

Figure 18-1 On the graph, L represents the quantity of labor and Q represents the quantity of output per week. Refer to Figure 18-1. The marginal product of the second worker is Correct! 90 units of output. 105 units of output. 210 units of output. 330 units of output.

90 units of output.

Two firms, A and B, each currently emit 100 tons of chemicals into the air. The government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution emitted into the air. The government gives each firm 40 pollution permits, which it can either use or sell to the other firm. It costs Firm A $200 for each ton of pollution that it eliminates before it is emitted into the air, and it costs Firm B $100 for each ton of pollution that it eliminates before it is emitted into the air. It is likely that Correct! Firm A will buy all of Firm B's pollution permits. Each one will cost between $100 and $200. Firm B will buy all of Firm A's pollution permits. Each one will cost between $100 and $200. Both firms will use their own pollution permits. Firm A will buy some of Firm B's pollution permits. Each one will cost less than $100.

Firm A will buy all of Firm B's pollution permits. Each one will cost between $100 and $200.

Two firms, A and B, each currently dump 50 tons of chemicals into the local river. The government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution dumped into the river. The government will sell 40 pollution permits for $75 each. It costs Firm A $100 for each ton of pollution that it eliminates before it reaches the river, and it costs Firm B $50 for each ton of pollution that it eliminates before it reaches the river. Neither firm produces any less output, but they both conform to the law. It is likely that between the cost of permits and the cost of additional pollution abatement, Firm B will spend $3,500. Correct! Firm A will spend $4,000. Firm A will spend $4,500. Firm B will spend $3,000.

Firm A will spend $4,000.

Sunshine's Organic Market sells organic produce. Assume that labor is the only input that varies for the firm. The store manager has determined that if she hires 9 workers, the store can sell 200 pounds of produce per day. If she hires 10 workers, the store can sell 230 pounds of produce per day. The store earns $4 for each pound of produce that it sells, and the manager pays each worker $60 per day. Which of the following is correct? For the 10th worker, the marginal product is 20 pounds of produce per day. Correct! For the 10th worker, the marginal revenue product is $120 per day. The marginal profit from the 10th worker is $120. All of the above are correct.

For the 10th worker, the marginal revenue product is $120 per day.

Carolyn's Pottery Shop produces vases that sell for $15 each. Assume that labor is the only input that varies for the firm. If Carolyn hires 10 workers, she can produce and sell 500 vases per week. If she hires 11 workers, she can produce and sell 560 vases per week. Carolyn pays each of her workers $400 per week. Which of the following is correct? Correct! For the 11th worker, the marginal profit is $500. For the 11th worker, the marginal revenue product is $500. The firm is maximizing its profit. If the firm is employing 11 workers, then its profit would increase if it cut back to 10 workers.

For the 11th worker, the marginal profit is $500

Sally runs a hair styling salon. Sally is a profit-maximizing owner whose firm operates in a competitive market. The marginal cost of a haircut is $15. What is the maximum wage that Sally will pay her stylists? less than $15 per haircut $15 per haircut more than $15 haircut Correct! There is insufficient information to answer this question.

There is insufficient information to answer this question.

Table 15-4 A monopolist faces the following demand curve: Price Quantity $30 0 $25 2.5 $20 5 $15 7.5 $10 10 $5 12.5 $0 15 Refer to Table 15-4. If the monopolist produces 5 units, what is its average revenue? a) $100 Correct! b) $20 c) $5 d) $4 $4

b) $20

When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $9 it sells 62 units. The marginal revenue for the firm over this range is: a) $18. Correct! b) $23. c) $46. d) $92.

b) $23

If the monopolist's linear demand curve intersects the quantity axis at Q = 30, then the monopolist's marginal revenue will be equal to zero at a) Q = 10. Correct! b) Q = 15. c) Q = 20. d) Q = 30.

b) Q = 15

Bob's Butcher Shop is the only place within 100 miles that sells bison burgers. Assuming that Bob is maximizing his profit, which of the following statements is true? a) The price of Bob's bison burgers will be less than Bob's marginal cost. Correct! b) The price of Bob's bison burgers will exceed Bob's marginal cost. c) The price of Bob's bison burgers will equal Bob's marginal cost. d) Costs are irrelevant to Bob because he is a monopolist.

b) The price of Bob's bison burgers will exceed Bob's marginal cost.

Figure 10-13. On the graph, Q represents the quantity of plastics and P represents the price of plastics. Refer to Figure 10-13. Each unit of plastics that is produced results in an external a) cost of $6. Correct! b) cost of $8. c) benefit of $6. d) benefit of $8.

b) cost of $8.

Table 15-5 A monopolist faces the following demand curve: Price Quantity $51 1 $47 2 $42 3 $36 4 $29 5 $21 6 $12 7 Refer to Table 15-5. The monopolist has total fixed costs of $60 and has a constant marginal cost of $15. What is the profit-maximizing price? a) $4 b) $39 Correct! c) $36 d) $42 $42

c) $36

If a monopolist can sell 7 units when the price is $4 and 8 units when the price is $3, then the marginal revenue of selling the eighth unit is equal to a) $3. b) $4. c) $24. Correct! d) -$4.

d) -$4

Figure 10-13. On the graph, Q represents the quantity of plastics and P represents the price of plastics. Refer to Figure 10-13. If 325 units of plastics are produced and consumed, then the social optimum has been reached. Correct! market equilibrium has been reached. government must have imposed a corrective tax to guide the market to this outcome. government must have offered a corrective subsidy to guide the market to this outcome.

market equilibrium has been reached.