Econ 2000 Han Yu Exam 2

What is the total cost of 120 units in Figure 21.2?

$34,560 (Picture on test)

Refer to the data in Figure 22.1. The total fixed costs for this firm are approximately

$50 (Picture on test)

What is the total fixed cost in Figure 21.2?

$9,600 (Picture on test)

Suppose a firm has an annual budget of $200,000 in wages and salaries, $75,000 in materials, $30,000 in new equipment, $20,000 in rented property, and $35,000 in interest costs on capital. the owner/manager does not choose to pay himself, but he could receive income of $90,000 by working elsewhere. The firm earns revenues of $360,000 per year. What is the economic profit for the firm described above?

-$90,000

If the price of cell phones increases by 5 percent and the quantity demanded falls by 2 percent, the absolute value of the price elasticity of demand is

0.4

The marginal physical of the third unit of labor in Figure 21.1 is

12.0 units per day

If income falls 4 percent for a year and as a result the quantity of homes demanded falls from 23 million to 20 million units for the year, the value of the income elasticity of demand for new homes is closest to

3.5

Refer to figure 22.3 for a perfectly competitive firm. At a market price of $23, total profits are maximized at an output of

39 (Picture on test)

For the perfectly competitive firm, the marginal revenue is always

Constant

Higher prices will increase total revenue if

Demand is elastic

Accounting costs and economic costs differ because

Economic costs include implicit costs and accounting costs do not

The demand curve for two perfectly competitive firms is

Horizontal

The demand curve that is completely elastic is

Horizontal

If a good is normal, its

Income elasticity of demand is positive

Assume the price elasticity of demand for JT Chip Co. chips is 4.0. If the company decreases the price of each bag of chips from $1.89 to $1.49, the number of bags sold will

Increase by 95 percent

Refer to Figure 22.3 at quantity level B

Marginal revenue is greater than marginal cost, so the firm should expand production (Pic on test)

In which of the following types of markets does a single firm have the most market power?

Monopoly

A catfish farmer will shut down production when

Price falls below AVC

A firm's total revenue can be measured by

Price times quantity

The period in which at least one input is fixed in quantity is the

Short Run

When the prices of postage stamps rise, the demand for internet services increases, 'ceteris paribus'. Postage stamps and internet services are therefore

Substitutes

Profit is

The difference between total revenue and total cost

When demand is inelastic

The percentage change in price is greater than the percentage change in quantity demanded

With which unit of labor do diminishing marginal returns first appear in Table 21.1?

The third (Picture on test)

In the short run, when a firm produces zero output, variable cost equals

Zero