question
For MOST firms, economic profit is:
A)equal to accounting profit.
B)negative.
C)less than accounting profit.
D)greater than accounting profit.
A)equal to accounting profit.
B)negative.
C)less than accounting profit.
D)greater than accounting profit.
answer
C) less than accounting profit
question
Money that must be paid for the use of factors of production such as labor and capital is an:
A)accounting profit.
B)implicit cost.
C)economic profit.
D)explicit cost.
A)accounting profit.
B)implicit cost.
C)economic profit.
D)explicit cost.
answer
D) explicit cost
question
Assume that diminishing marginal utility applies to both dish soap and floor wax and that Minh is spending all of her income. If Minh purchases a combination of dish soap and floor wax such that MUDishsoap//PDishsoap= 50 and MUFloorwax//PFloorwax= 30, to maximize utility, Minh should buy _____ soap and _____ floor wax.
A)more; less
B)less; less
C)less; more
D)more; more
A)more; less
B)less; less
C)less; more
D)more; more
answer
A) more; less
question
The sum of fixed and variable costs is _____ cost.
A)marginal
B)average
C)total
D)variable
A)marginal
B)average
C)total
D)variable
answer
C) total
question
Feng is thinking of mowing lawns over the summer. His friend Jason mows lawns, and he says the marginal cost of mowing the fourth lawn in a day is $40. Feng thinks about it and realizes that the total cost of mowing four lawns is:
A)$80.
B)$160.
C)not possible to determine from the information provided.
D)$40.
A)$80.
B)$160.
C)not possible to determine from the information provided.
D)$40.
answer
C) not possible to determine from the information provided
question
Juan spends all of his income on packs of baseball cards and boxes of candy. At his current consumption bundle, the marginal utility of baseball card packs is 20 and the marginal utility of candy boxes is 10. Assuming that diminishing marginal utility applies to both goods, if the price of baseball card packs is $10 and the price of candy boxes is $2, Juan should:
A)consume more candy boxes and fewer baseball card packs.
B)continue to consume the current bundle.
C)consume equal numbers of baseball card packs and candy boxes.
D)consume more baseball card packs and fewer candy boxes.
A)consume more candy boxes and fewer baseball card packs.
B)continue to consume the current bundle.
C)consume equal numbers of baseball card packs and candy boxes.
D)consume more baseball card packs and fewer candy boxes.
answer
A) consume more candy boxes and fewer baseball card packs
question
If labor is abundant in South Africa but capital is scarce, when South Africa opens to trade, the price of labor will _____ and the price of capital will _____.
A)fall; fall
B)rise; fall
C)fall; rise
D)rise; rise
A)fall; fall
B)rise; fall
C)fall; rise
D)rise; rise
answer
B) rise; fall
question
In economics, the short run is:
A)less than 1 month.
B)enough time to change all inputs to production.
C)less than 1 week.
D)enough time to vary output but not plant capacity.
A)less than 1 month.
B)enough time to change all inputs to production.
C)less than 1 week.
D)enough time to vary output but not plant capacity.
answer
D) enough time to cary output but not plant capacity
question
The law of diminishing marginal utility indicates that the slope of the marginal utility curve is generally:
A)positive.
B)horizontal.
C)negative.
D)vertical.
A)positive.
B)horizontal.
C)negative.
D)vertical.
answer
C) negative
question
Chuck spends all of his income on tacos and milkshakes. His income is $100, the price of tacos is $10, and the price of milkshakes is $2. If the price of each good doubles and Chuck's income doubles:
A)Chuck's budget line will shift out.
B)Chuck's budget line will shift in.
C)Chuck will be able to buy more of both goods.
D)Chuck's budget line will be unaffected.
A)Chuck's budget line will shift out.
B)Chuck's budget line will shift in.
C)Chuck will be able to buy more of both goods.
D)Chuck's budget line will be unaffected.
answer
D) chuck's budget line will be unaffected
question
An example of a tariff is a:
A)tax of $500 on each Honda automobile produced in the United State.
B)limit on the total number of Honda automobiles imported from Japan.
C)tax of 10% of the value of each Honda automobile imported from Japan.
D)regulation specifying that each imported Honda automobile must meet certain emission exhaust guidelines.
A)tax of $500 on each Honda automobile produced in the United State.
B)limit on the total number of Honda automobiles imported from Japan.
C)tax of 10% of the value of each Honda automobile imported from Japan.
D)regulation specifying that each imported Honda automobile must meet certain emission exhaust guidelines.
answer
C) tax of 10% of the value of each Honda automobile imported from Japan
question
In making an "either-or" decision:
A)choose the activity that results in the greater accounting profit.
B)continue in an activity as long as the marginal cost is greater than the marginal benefit.
C)continue in an activity as long as the marginal cost is less than the marginal benefit.
D)choose the activity that results in the greater economic profit.
A)choose the activity that results in the greater accounting profit.
B)continue in an activity as long as the marginal cost is greater than the marginal benefit.
C)continue in an activity as long as the marginal cost is less than the marginal benefit.
D)choose the activity that results in the greater economic profit.
answer
D) choose the activity that results in the greater economic profit
question
An urbanized country has 100 million workers living on 100 square miles of land. A country that is principally rural has 1 million workers living on 10 square miles of land. From this information we know that the urbanized country is _____ relative to the rural country.
A)labor-intensive
B)land-abundant
C)labor-abundant
D)land-intensive
A)labor-intensive
B)land-abundant
C)labor-abundant
D)land-intensive
answer
C) labor-abundant
question
If marginal cost is GREATER than average total cost:
A)marginal cost is decreasing.
B)average total cost is unchanged.
C)average total cost is increasing.
D)average total cost is decreasing.
A)marginal cost is decreasing.
B)average total cost is unchanged.
C)average total cost is increasing.
D)average total cost is decreasing.
answer
C) average total cost is increasing
question
Tom's Budget Constraint. The combination of _____ music downloads and _____ movies lies OUTSIDE Tom's budget line (meaning Tom cannot afford this combination).
Tom is trying to decide how to allocate his $50 budget for music downloads and online movie streaming when the price of a music download is $1 and the price of a movie is $5.
A)50; 0
B)20; 5
C)50; 10
D)0; 5
Tom is trying to decide how to allocate his $50 budget for music downloads and online movie streaming when the price of a music download is $1 and the price of a movie is $5.
A)50; 0
B)20; 5
C)50; 10
D)0; 5
answer
C) 50; 10
question
Kawamura, a careful utility maximizer, consumes peanut butter and ice cream. Assume that both peanut butter and ice cream are normal goods and that diminishing marginal utility applies to both goods. Right after he achieves the utility-maximizing level of consumption of the two goods, the price of peanut butter falls. After he adjusts to this event, the marginal utility of peanut butter goes _____ and that of ice cream goes _____.
A)down; up
B)up; down
C)down; down
D)up; up
A)down; up
B)up; down
C)down; down
D)up; up
answer
A) down; up
question
Bessie wants to calculate the accounting and economic profits of her cattle farm in Nebraska. She pays $30,000 per year in overhead, $80,000 in wages, and $20,000 in insurance. She forgoes $30,000 per year that she could make as a teacher. If her total revenue equals $140,000, that means her accounting profit is _____ and her economic profit is _____.
A)$60,000; $30,000
B)-$10,000; -$10,000
C)$10,000; -$20,000
D)$30,000; -$30,000
A)$60,000; $30,000
B)-$10,000; -$10,000
C)$10,000; -$20,000
D)$30,000; -$30,000
answer
C) $10,000; -$20,000
question
Wolfgang really likes both rutabagas and broccoli. The price of each good is $0.60 per pound and Wolfgang is maximizing utility. At the point of maximal utility, the marginal utility of:
A)broccoli is greater than the marginal utility of rutabagas.
B)both goods is zero.
C)rutabagasis greater than the marginal utility of broccoli.
D)rutabagas and broccoli is the same.
A)broccoli is greater than the marginal utility of rutabagas.
B)both goods is zero.
C)rutabagasis greater than the marginal utility of broccoli.
D)rutabagas and broccoli is the same.
answer
D) rutabagas and broccoli is the same
question
Freddy has eaten three corn dogs at the county fair, and if he eats another, he will get sick on the roller coaster. Knowing this, and ignoring any impact that price might have on his decision, we can say that, for the fourth corn dog, the:
A)marginal utility is less than zero.
B)marginal utility curve is still increasing.
C)total utility is less than zero.
D)total utility curve is still increasing.
A)marginal utility is less than zero.
B)marginal utility curve is still increasing.
C)total utility is less than zero.
D)total utility curve is still increasing.
answer
A) marginal utility is less than zero
question
"Diminishing marginal returns" means that:
A)each additional unit of an input will increase output, but by larger and larger amounts as inputs increase.
B)each additional unit of an input will decrease output.
C)the firm is maximizing profit.
D)each additional unit of an input will increase output, but by smaller and smaller amounts as inputs increase.
A)each additional unit of an input will increase output, but by larger and larger amounts as inputs increase.
B)each additional unit of an input will decrease output.
C)the firm is maximizing profit.
D)each additional unit of an input will increase output, but by smaller and smaller amounts as inputs increase.
answer
D) each additional unit of an input will increase output, but by smaller and smaller amounts as inputs increase
question
Costs that are included in the economic concept of cost but that are NOT explicit costs are:
A)accounting profits.
B)economic profits.
C)outlay costs.
D)implicit costs.
A)accounting profits.
B)economic profits.
C)outlay costs.
D)implicit costs.
answer
D) implicit costs
question
You own a deli. Which input of production is MOST likely fixed at your deli?
A)the employees
B)the dining room
C)the bread used to make sandwiches
D)the tomato sauce used to make soups
A)the employees
B)the dining room
C)the bread used to make sandwiches
D)the tomato sauce used to make soups
answer
B) the dining room
question
An "either-or" decision entails:
A)calculating marginal costs for each activity.
B)deciding how much of an activity to do.
C)calculating the marginal benefits for each activity.
D)a choice between two activities.
A)calculating marginal costs for each activity.
B)deciding how much of an activity to do.
C)calculating the marginal benefits for each activity.
D)a choice between two activities.
answer
D) a choice between two activites
question
The long-run average cost curve will be upward-sloping when the firm has:
A)diminishing returns.
B)economies of scale.
C)diseconomies of scale.
D)constant returns to scale.
A)diminishing returns.
B)economies of scale.
C)diseconomies of scale.
D)constant returns to scale.
answer
C) diseconomies of scale
question
In economic analysis, the principle of marginal analysis refers to:
A)the notion that a group's problems can be effectively analyzed by focusing on only a small subsample of the group.
B)the result that the optimal quantity of an activity is that at which the net benefit of the representative, or marginal, individual is maximized.
C)dividing large problems into smaller, more manageable ones.
D)the result that the optimal quantity of an activity is that at which marginal benefit is equal to marginal cost.
A)the notion that a group's problems can be effectively analyzed by focusing on only a small subsample of the group.
B)the result that the optimal quantity of an activity is that at which the net benefit of the representative, or marginal, individual is maximized.
C)dividing large problems into smaller, more manageable ones.
D)the result that the optimal quantity of an activity is that at which marginal benefit is equal to marginal cost.
answer
D) the result that the optimal quantity of an activity is that at which marginal benefit is equal to marginal cost
question
Which good is MOST likely to display increasing marginal utility over some range?
A)paint, because you need enough to paint at least one entire room
B)peanut butter and jelly sandwiches
C)chicken during the 1920s, when it was considered a luxury good
D)lobsters, which are so expensive that you must eat two to get your money's worth
A)paint, because you need enough to paint at least one entire room
B)peanut butter and jelly sandwiches
C)chicken during the 1920s, when it was considered a luxury good
D)lobsters, which are so expensive that you must eat two to get your money's worth
answer
A) paint, because you need enough to paint at least one entire room
question
A tariff _____ the price received by domestic producers and _____ the price paid by domestic consumers.
A)increases; increases
B)decreases; increases
C)increases; decreases
D)decreases; decreases
A)increases; increases
B)decreases; increases
C)increases; decreases
D)decreases; decreases
answer
A) increases; increases
question
Suppose Cyd knows the average total cost of producing 9 scones is $5, while the average total cost of producing 10 scones is $5.20. What is the marginal cost of the tenth scone?
A)$5.20
B)$5.00
C)$7.00
D)$0.20
A)$5.20
B)$5.00
C)$7.00
D)$0.20
answer
C) $7.00
question
The United States must give up the production of 500 bicycles to produce 20 additional tractors. The opportunity cost of producing 100 bicycles is _____ tractor(s).
A)25
B)1
C)100
D)4
A)25
B)1
C)100
D)4
answer
D) 4
500/20 = 25
100/25 = 4
500/20 = 25
100/25 = 4
question
The amount by which an additional unit of an activity increases total cost is:
A)marginal benefit.
B)marginal cost.
C)net benefit.
D)negative benefit.
A)marginal benefit.
B)marginal cost.
C)net benefit.
D)negative benefit.
answer
B) marginal cost
question
Saudi Arabia has a tremendous comparative advantage in petroleum. Which factor is a source of this comparative advantage?
A)no opportunity cost associated with oil production
B)mild temperatures
C)high tariffs on oil from other nations
D)large reserves of crude oil
A)no opportunity cost associated with oil production
B)mild temperatures
C)high tariffs on oil from other nations
D)large reserves of crude oil
answer
D) large reserves of crude oil
question
Krista's dry-cleaning business incurs $900 per month in fixed costs. Last month her total output was 3,000 pounds of clothes. This month her total output fell to 2,700 pounds. This means her average fixed cost _____ by a little more than _____ cents.
A)fell; 2.50
B)fell; 3.33
C)increased; 2.50
D)increased; 3.33
A)fell; 2.50
B)fell; 3.33
C)increased; 2.50
D)increased; 3.33
answer
D) increased; 3.33
900/2700 = 0.333
900/2700 = 0.333
question
Xavier notices that the marginal utility of working with a tutor seems to fall with each hour the tutor helps him study. If Xavier keeps the tutor until his grade actually begins to fall, his marginal utility for the last hour of tutoring will be:
A)positive, but rising more slowly.
B)0.
C)immeasurable.
D)negative.
A)positive, but rising more slowly.
B)0.
C)immeasurable.
D)negative.
answer
D) negative
question
If two firms are identical in all respects except that one has more of the fixed input capital than another, the total product curve for the firm with more capital:
A)will lie above the total product curve for the firm with less capital.
B)will lie below the total product curve for the firm with less capital.
C)will show no diminishing marginal returns.
D)must equal the total product curve for the firm with less capital.
A)will lie above the total product curve for the firm with less capital.
B)will lie below the total product curve for the firm with less capital.
C)will show no diminishing marginal returns.
D)must equal the total product curve for the firm with less capital.
answer
A) will lie above the total product curve for the firm with less capital
question
In the long run, all costs are:
A)variable.
B)fixed.
C)marginal.
D)constant.
A)variable.
B)fixed.
C)marginal.
D)constant.
answer
A) variable
question
Marginal benefit:
A)is the addition to total benefit due to undertaking one more unit of an activity.
B)normally increases as more of an activity is undertaken.
C)is the subsidiary benefit from an activity; for example, the main benefit from weight training is an increase in muscle mass, and the subsidiary or marginal benefit might be a reduction in cholesterol.
D)must be increasing if total benefit is increasing.
A)is the addition to total benefit due to undertaking one more unit of an activity.
B)normally increases as more of an activity is undertaken.
C)is the subsidiary benefit from an activity; for example, the main benefit from weight training is an increase in muscle mass, and the subsidiary or marginal benefit might be a reduction in cholesterol.
D)must be increasing if total benefit is increasing.
answer
A) is the addition to total benefit due to undertaking one more unit of an activity
question
Which model states that nations that are abundant in a factor will have a comparative advantage in a good whose production is intensive in that factor?
A)the Ricardian model
B)the oligopoly model
C)the pauper labor fallacy model
D)the Heckscher-Ohlin model
A)the Ricardian model
B)the oligopoly model
C)the pauper labor fallacy model
D)the Heckscher-Ohlin model
answer
D) the Heckscher-Ohlin model
question
Economists identify the satisfaction a person derives from the consumption of goods and services as:
A)utility.
B)happiness.
C)pleasure.
D)usefulness.
A)utility.
B)happiness.
C)pleasure.
D)usefulness.
answer
A) utility
question
Suppose the marginal cost curve in the short run first decreases and then increases. If marginal cost is increasing, _____ must be _____.
A)average variable cost; increasing
B)average total cost; increasing
C)marginal product; decreasing
D)marginal product; increasing
A)average variable cost; increasing
B)average total cost; increasing
C)marginal product; decreasing
D)marginal product; increasing
answer
C) marginal product; decreasing
question
Both the United States and Canada produce automobiles and their components; however, each particular model or component is produced in only one of the two countries. Which factor explains this pattern of production and trade?
A)differences in factor endowments
B)the role of increasing returns
C)differences in climate
D)differences in technology
A)differences in factor endowments
B)the role of increasing returns
C)differences in climate
D)differences in technology
answer
B) the role of increasing returns
question
A factor of production whose quantity can be changed in the SHORT run is a(n) _____ factor of production.
A)incremental
B)variable
C)fixed
D)marginal
A)incremental
B)variable
C)fixed
D)marginal
answer
B) variable
question
Ashley Bakery expects its marginal cost curve will eventually slope upward because, as with most production processes, baking has:
A)a maximum output.
B)decreasing opportunity costs.
C)constant opportunity costs.
D)diminishing marginal returns.
A)a maximum output.
B)decreasing opportunity costs.
C)constant opportunity costs.
D)diminishing marginal returns.
answer
D) diminishing marginal returns
question
The implicit cost of capital is:
A)irrelevant for determining economic profit.
B)the opportunity cost of capital used by a business.
C)the expense associated with leasing machines.
D)the expense associated with buying machines.
A)irrelevant for determining economic profit.
B)the opportunity cost of capital used by a business.
C)the expense associated with leasing machines.
D)the expense associated with buying machines.
answer
B) the opportunity cost of capital used by a business
question
Whenever marginal benefit is less than marginal cost, the decision maker should do _____ of the activity.
A)none
B)less
C)that exact amount
D)more
A)none
B)less
C)that exact amount
D)more
answer
B) less
question
According to the Heckscher-Ohlinmodel, Brazil will have a comparative advantage in oranges if the factors that are _____ in the production of oranges are _____.
A)scarce; imported
B)intensive; inexpensive
C)intensive; imported
D)intensive; abundant
A)scarce; imported
B)intensive; inexpensive
C)intensive; imported
D)intensive; abundant
answer
D) intensive; abundant
question
The larger the output, the more variable input required to produce additional units. Called the _____ effect, this leads to a _____ average _____ cost as output rises.
A)spreading; higher; fixed
B)diminishing returns; higher; variable
C)spreading; lower; fixed
D)diminishing returns; lower; variable
A)spreading; higher; fixed
B)diminishing returns; higher; variable
C)spreading; lower; fixed
D)diminishing returns; lower; variable
answer
B) diminishing returns; higher; variable
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
