Econ 2000 test 2

q3 units of output

Refer to Figure 9.5. Assume this firm is in a constant-cost industry. For this firm to be in long-run equilibrium, the firm must be producing

$7

Refer to figure 9.1. This farmer's shutdown point is at a price of

all firms have costs that they must bear regardless of their output

In the short run

C

Perfectly competitive firms must make all of the following decisions EXCEPT A) how much output to supply. C) what price to charge for its output. B) which production technology to use. D) how much of each input to demand.

total utility increases

Refer to Figure 6.13. If Arthur moves from indifference curve 1 to indifference curve 2, then Arthur's

13.5

Refer to Figure 7.3. The average product of the second worker is ________ yards raked

$108

Refer to Figure 9.1. If this farmer is maximizing his profits, his TVC is

$10

Refer to Figure 9.1. This farmer would earn a zero economic profit if price was

q3

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

C

Refer to Table 7.1. If the hourly wage rate is $7 and the hourly price of capital is $10, which production technology should be selected?

$40

Refer to Table 8.2. If Sherry produces two pairs of earrings, her marginal cost is

$100

Refer to Table 8.2. If Sherry produces zero earrings, her total fixed costs are

six;$14

Refer to Table 8.5. Assume that fruit baskets are sold in a perfectly competitive market. The market price of a fruit basket is $22. To maximize profits, Exotic Fruit should sell ________ fruit basket(s) and their profit is ________.

0

Refer to figure 6.9. The marginal utility of the fourth video game rental is _____

$900

Refer to scenario 9.3. Economic profit per week is _____

consume less X and more Y

Richard is consuming X and Y so that he is spending his entire income and MUx/Px = 6 and 11) MUy/Py = 10. To maximize utility, he should

$30 x clothing + $5 x food =600

Ted has $600 dollars a week to spend on clothing and food. The price of clothing is $30 and the price of food is $5. What is the equation for Ted's budget constraint?

equal to

he relationship between the price that a perfectly competitive firm can charge buyers and the firm's marginal revenue is that the price is ________ marginal revenue over all output.

$2000

refer to scenario 9.3. total fixed costs per week are _____

there is free entry into the wool industry

Assume the wool industry is perfectly competitive. Why is it difficult for a wool producer to make excess profits in the long run?

by the technologies that are available and by input prices

Costs of production are determined

include both a normal rate of return on investment and the opportunity cost of each factor of production

Economic Costs

the substitution effect will decrease the quantity of the good demanded while the income effect will increase the quantity of the good demanded

For interior goods, the substitution and income effects of a price increases will _____

upward sloping

If the substitution effect of a wage change outweighs the income effect of a wage change, the labor-supply curve is __________

increase;increase

Wheat is produced in a perfectly competitive market. Market demand for wheat increases. This will cause the individual wheat farmer's marginal revenue to ________ and their profit maximizing level of output to ________.