BUSB 1B Exam 1 - Assignment Essays

question

B. False

answer

1. MC (marginal cost) curve is the same as the ATC (average total cost) curve.

question

D. $30

answer

2. Suppose that the total variable cost for 5 outputs is equal to $100 and the total fixed cost for the same output is equal to $50. The total per unit cost (ATC) is?

question

A. accounting profit is $100,000

answer

3. If a firm has total revenues of $200,000, the owner's labor in the firm is valued at $30,000, and the firm has explicit costs of $70,000, then:

question

E. it is negative in the first stage of the production process in the short run

answer

4. If an increase in the use of a variable resource increases the total product, What can be concluded about marginal product?

question

E. increases; variable

answer

5. Diseconomies of scale result when increases in output lead to _______ in unit costs when all resources are _______

question

A. increases

answer

6. For the most part what happens to the change in satisfaction if we consume fewer units of a good?

question

A. No, they can increase satisfaction by consuming more B and less A.

answer

7. If the marginal utility of good A is 4 utils and its price is $2, and the marginal utility of good B is 6 utils and its price is $1, Suppose the individual spends a total of $3 buying one unit of each good, is the individual consumer maximizing total utility.

question

D. Yes, the good turns into a bad (dissatisfaction) after too much consumption

answer

8. Is it possible to receive disutility or dissatisfaction from consuming a good?

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B. Buy less of B and more of A

answer

9. If the MU of good A, relative to its price, is greater than the MU of good B, relative to its price. What should the consumer do to maximize total utility?

question

B. The politician assumes that the demand for gasoline at the pump is perfectly inelastic.

answer

10. Suppose the current price of gasoline at the pump is $1 per gallon and that one million gallons are sold per month. A politician proposes to add a 10-cent tax to the price of a gallon of gas. The politician says the tax will generate $100,000 tax revenues per month. What assumptions is the politician making.

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A. The amount of crime increases along with the price of product A.

answer

11. Suppose the demand for product A is perfectly inelastic. Further, assume that buyers of product A steal to pay for the product. If policies are passed to decrease the supply of A. What happens?

question

E. substitutes, CED < 1

answer

12. As the price of good X rises from $10 to $12, the quantity demanded of goo Y rises from 100 units to 114 units. Are X and Y substitutes, or complements? What is the cross elasticity of demand?

question

A. true

answer

13. The marginal product (MP) is the change in total product from one additional unit of input (labor)

question

A. true

answer

14. The firm's MC curve above AVC curve is the firm's supply curve.

question

D. Increases; variable

answer

15. Diseconomies of scale result when increases in output lead to _______ in unit costs when all resource are

question

A. True

answer

16. If the good has a price elasticity of demand coefficient more than one, then this good is elastic.

question

A. True

answer

17. If the price elasticity of demand is elastic, consumers are relatively responsive to a price increase.

question

B. False

answer

18. If price falls and total revenue rises then demand is inelastic.

question

B. False

answer

19. The law of diminishing marginal utility tells us that, at some point, successive units of a good consumed by the same individual will become more valuable to that individual

question

A. true

answer

20. To say that a good gives you, value in use, is to say that it satisfies some want or desire, or that it gives you satisfaction.

question

A. true

answer

21. By using an artificial construct called, utils, or dollar values one can measure utility.

question

A. true

answer

22. Rising marginal costs are the result of diminishing returns.

question

B. false

answer

23. Short-run costs are U-shaped because of economies and diseconomies of scale

question

D. accounting profits were $100,000 and its economic losses were $200,000.

answer

24. Suppose that a business incurred implicit costs of $300,000 and explicit costs of $1,300,000 over the past year. If the firm earned $1,400,000 in revenue, its:

question

A. at least one input is fixed.

answer

25. The distinguishing feature of the short run is that:

question

B. $2,000

answer

26. If at optimum output of 1,000 units, the firm is incurring average variable cost per unit of $2.50, average fixed per unit of $3.50, and selling its output at $8.00 per unit, its total profit is:

question

D. -$2,000

answer

27. Assume the following: price = $20, quantity = 700, explicit unit cost = $15, and implicit costs = $5,500. What does economic profit equal?

question

C. $3

answer

28. Suppose the MP (Marginal Product) of a company worker is 100 units per hour and the wage is $300 an hour. The unit cost of labor would be:

question

D. 5

answer

29. The change in total cost is $400 and the Marginal cost is $80.00, the change in the rate of output is:

question

D. $3.00

answer

30. Total variable cost for 75 units is $150, the total fixed cost for 75 units is $75. The average total cost is:

question

B. inelastic

answer

31. A college in California raises its annual tuition from $2500 to $3500; while enrollment falls from 7000 to 5800. The price elasticity of demand is:

question

A. Substitutes

answer

32. As the price of good X rises from $10 to $12, the quantity demanded of good Y rises from 100 to 114 units. Are goods X and Y substitutes or complements?

question

A. Complements

answer

33. As the price of good Y falls from $12 to $10, the quantity demanded of good X rises from 100 to 112 units. Are goods X and Y substitutes or complements?

question

B. a 10 percent rise in the price of gasoline will decrease the amount purchased by 2 percent.

answer

34. If the price elasticity of demand for gasoline is 0.20:

question

D, rising

answer

35. As the firm decreases price by 10% its quantity demanded rises by 15%. The firm's total revenue relative to price elasticity of demand is:

1 of 35

question

B. False

answer

1. MC (marginal cost) curve is the same as the ATC (average total cost) curve.

question

D. $30

answer

2. Suppose that the total variable cost for 5 outputs is equal to $100 and the total fixed cost for the same output is equal to $50. The total per unit cost (ATC) is?

question

A. accounting profit is $100,000

answer

3. If a firm has total revenues of $200,000, the owner's labor in the firm is valued at $30,000, and the firm has explicit costs of $70,000, then:

question

E. it is negative in the first stage of the production process in the short run

answer

4. If an increase in the use of a variable resource increases the total product, What can be concluded about marginal product?

question

E. increases; variable

answer

5. Diseconomies of scale result when increases in output lead to _______ in unit costs when all resources are _______

question

A. increases

answer

6. For the most part what happens to the change in satisfaction if we consume fewer units of a good?

question

A. No, they can increase satisfaction by consuming more B and less A.

answer

question

D. Yes, the good turns into a bad (dissatisfaction) after too much consumption

answer

8. Is it possible to receive disutility or dissatisfaction from consuming a good?

question

B. Buy less of B and more of A

answer

9. If the MU of good A, relative to its price, is greater than the MU of good B, relative to its price. What should the consumer do to maximize total utility?

question

B. The politician assumes that the demand for gasoline at the pump is perfectly inelastic.

answer

question

A. The amount of crime increases along with the price of product A.

answer

11. Suppose the demand for product A is perfectly inelastic. Further, assume that buyers of product A steal to pay for the product. If policies are passed to decrease the supply of A. What happens?

question

E. substitutes, CED < 1

answer

12. As the price of good X rises from $10 to $12, the quantity demanded of goo Y rises from 100 units to 114 units. Are X and Y substitutes, or complements? What is the cross elasticity of demand?

question

A. true

answer

13. The marginal product (MP) is the change in total product from one additional unit of input (labor)

question

A. true

answer

14. The firm's MC curve above AVC curve is the firm's supply curve.

question

D. Increases; variable

answer

15. Diseconomies of scale result when increases in output lead to _______ in unit costs when all resource are

question

A. True

answer

16. If the good has a price elasticity of demand coefficient more than one, then this good is elastic.

question

A. True

answer

17. If the price elasticity of demand is elastic, consumers are relatively responsive to a price increase.

question

B. False

answer

18. If price falls and total revenue rises then demand is inelastic.

question

B. False

answer

19. The law of diminishing marginal utility tells us that, at some point, successive units of a good consumed by the same individual will become more valuable to that individual

question

A. true

answer

20. To say that a good gives you, value in use, is to say that it satisfies some want or desire, or that it gives you satisfaction.

question

A. true

answer

21. By using an artificial construct called, utils, or dollar values one can measure utility.

question

A. true

answer

22. Rising marginal costs are the result of diminishing returns.

question

B. false

answer

23. Short-run costs are U-shaped because of economies and diseconomies of scale

question

D. accounting profits were $100,000 and its economic losses were $200,000.

answer

24. Suppose that a business incurred implicit costs of $300,000 and explicit costs of $1,300,000 over the past year. If the firm earned $1,400,000 in revenue, its:

question

A. at least one input is fixed.

answer

25. The distinguishing feature of the short run is that:

question

B. $2,000

answer

26. If at optimum output of 1,000 units, the firm is incurring average variable cost per unit of $2.50, average fixed per unit of $3.50, and selling its output at $8.00 per unit, its total profit is:

question

D. -$2,000

answer

27. Assume the following: price = $20, quantity = 700, explicit unit cost = $15, and implicit costs = $5,500. What does economic profit equal?

question

C. $3

answer

28. Suppose the MP (Marginal Product) of a company worker is 100 units per hour and the wage is $300 an hour. The unit cost of labor would be:

question

D. 5

answer

29. The change in total cost is $400 and the Marginal cost is $80.00, the change in the rate of output is:

question

D. $3.00

answer

30. Total variable cost for 75 units is $150, the total fixed cost for 75 units is $75. The average total cost is:

question

B. inelastic

answer

31. A college in California raises its annual tuition from $2500 to $3500; while enrollment falls from 7000 to 5800. The price elasticity of demand is:

question

A. Substitutes

answer

32. As the price of good X rises from $10 to $12, the quantity demanded of good Y rises from 100 to 114 units. Are goods X and Y substitutes or complements?

question

A. Complements

answer

33. As the price of good Y falls from $12 to $10, the quantity demanded of good X rises from 100 to 112 units. Are goods X and Y substitutes or complements?

question

B. a 10 percent rise in the price of gasoline will decrease the amount purchased by 2 percent.

answer

34. If the price elasticity of demand for gasoline is 0.20:

question

D, rising

answer

35. As the firm decreases price by 10% its quantity demanded rises by 15%. The firm's total revenue relative to price elasticity of demand is:

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