question
A firm's managers are constrained by
A) consumers.
B) workers.
C) government.
D) All of the above.
A) consumers.
B) workers.
C) government.
D) All of the above.
answer
D) All of the above.
question
Which of the following would be categorized as an opportunity cost?
a. not being able to spend your $10,000 savings if you sink the money in your business
b. the cost of purchasing supplies for your house-cleaning business
c. the cost of purchasing auto insurance for your dry-cleaning delivery business
A) a only
B) a and c only
C) b and c only
D) all of the above
a. not being able to spend your $10,000 savings if you sink the money in your business
b. the cost of purchasing supplies for your house-cleaning business
c. the cost of purchasing auto insurance for your dry-cleaning delivery business
A) a only
B) a and c only
C) b and c only
D) all of the above
answer
A) a only
question
Golda Rush quit her job as a manager for Home Depot to start her own hair dressing salon, Goldilocks. She gave up a salary of $40,000 per year, invested her savings of $30,000 (which was earning 5 percent interest) and borrowed $10,000 from a close friend, agreeing to pay 5 percent interest per year. In her first year, Golda spent $18,000 to rent a salon, hired a part-time assistant for $12,000 and incurred another $15,000 on equipment and hairdressing material. Based on this information, what is the amount of her implicit costs?
A) $80,000
B) $70,000
C) $42,000
D) $41,500
A) $80,000
B) $70,000
C) $42,000
D) $41,500
answer
D) $41,500
question
Quantity Total Cost Variable Cost
0 $1,000 $0
100 1,360 360
200 1,560 560
300 1,960 960
400 2,760 1,760
500 4,000 3,000
600 5,800 4,800
Table 12-1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases. In perfect competition, marginal revenue (MR) is always equal to the market price. Assume that output can only be increased in batches of 100 units.
4) Refer to Table 12-1. If the market price of each camera case is $8, what is the profit-maximizing quantity?
A) 300 units
B) 400 units
C) 500 units
D) 600 units
0 $1,000 $0
100 1,360 360
200 1,560 560
300 1,960 960
400 2,760 1,760
500 4,000 3,000
600 5,800 4,800
Table 12-1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases. In perfect competition, marginal revenue (MR) is always equal to the market price. Assume that output can only be increased in batches of 100 units.
4) Refer to Table 12-1. If the market price of each camera case is $8, what is the profit-maximizing quantity?
A) 300 units
B) 400 units
C) 500 units
D) 600 units
answer
B) 400 units
question
Quantity Total Cost Variable Cost
0 $1,000 $0
100 1,360 360
200 1,560 560
300 1,960 960
400 2,760 1,760
500 4,000 3,000
600 5,800 4,800
Table 12-1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases. In perfect competition, marginal revenue (MR) is always equal to the market price. Assume that output can only be increased in batches of 100 units.
5) Refer to Table 12-1. If the market price of each camera case is $8, what is the firm's total revenue?
A) $2,400
B) $3,200
C) $4000
D) $4,800
0 $1,000 $0
100 1,360 360
200 1,560 560
300 1,960 960
400 2,760 1,760
500 4,000 3,000
600 5,800 4,800
Table 12-1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases. In perfect competition, marginal revenue (MR) is always equal to the market price. Assume that output can only be increased in batches of 100 units.
5) Refer to Table 12-1. If the market price of each camera case is $8, what is the firm's total revenue?
A) $2,400
B) $3,200
C) $4000
D) $4,800
answer
B) $3,200
question
If total variable cost exceeds total revenue at all output levels, a perfectly competitive firm
A) should produce in the short run.
B) is making short-run profits.
C) should shut down in the short run.
D) has covered its fixed cost.
A) should produce in the short run.
B) is making short-run profits.
C) should shut down in the short run.
D) has covered its fixed cost.
answer
C) should shut down in the short run.
question
Refer to Figure 12-10. Identify the short-run shut down point for the firm.
A) a
B) b
C) c
D) d
A) a
B) b
C) c
D) d
answer
B) b
question
Suppose Jill Johnson quits her $30,000 a year job to start a pizza store. She uses $50,000 of her savings to buy equipment—furniture, etc.—and takes out a loan as well.
How much are her implicit costs?
Ingredients $20,000
Wages 48,000
Interest payments on loan to buy pizza ovens 10,000
Electricity 6,000
Lease payment for store 24,000
Foregone salary 30,000
Foregone interest 3,000
Total
$141,000
How much are her implicit costs?
Ingredients $20,000
Wages 48,000
Interest payments on loan to buy pizza ovens 10,000
Electricity 6,000
Lease payment for store 24,000
Foregone salary 30,000
Foregone interest 3,000
Total
$141,000
answer
Foregone salary + Foregone interest 30,000 + 3,000 = 33,000
question
Suppose Jill Johnson quits her $30,000 a year job to start a pizza store. She uses $50,000 of her savings to buy equipment—furniture, etc.—and takes out a loan as well.
How much are her explicit costs?
Ingredients $20,000
Wages 48,000
Interest payments on loan to buy pizza ovens 10,000
Electricity 6,000
Lease payment for store 24,000
Foregone salary 30,000
Foregone interest 3,000
Total
$141,000
How much are her explicit costs?
Ingredients $20,000
Wages 48,000
Interest payments on loan to buy pizza ovens 10,000
Electricity 6,000
Lease payment for store 24,000
Foregone salary 30,000
Foregone interest 3,000
Total
$141,000
answer
Ingredients + Wages + Interest payments on loan to buy pizza ovens + Electricity + Lease payment for store = 20,000+48,000+10,000+6,000+24,000 = 108,000
question
Price discrimination
A) is the practice of charging different prices to different customers based on a seller's personal preferences and prejudices.
B) is the practice of charging different prices to different customers based on the different costs of supplying the product to different customers.
C) is the practice of charging different prices to different customers when the price differences cannot be attributed to variations in cost.
D) is the practice of giving preferential treatment to certain groups of customers based on their long-standing relationship to the producer.
A) is the practice of charging different prices to different customers based on a seller's personal preferences and prejudices.
B) is the practice of charging different prices to different customers based on the different costs of supplying the product to different customers.
C) is the practice of charging different prices to different customers when the price differences cannot be attributed to variations in cost.
D) is the practice of giving preferential treatment to certain groups of customers based on their long-standing relationship to the producer.
answer
C) is the practice of charging different prices to different customers when the price differences cannot be attributed to variations in cost.
question
For a firm that can effectively price discriminate, who will be charged a lower price?
A) customers who have an elastic demand for the product
B) customers who have an inelastic demand for the product
C) buyers that are members of the largest market segment
D) buyers that are members of the smallest market segment
A) customers who have an elastic demand for the product
B) customers who have an inelastic demand for the product
C) buyers that are members of the largest market segment
D) buyers that are members of the smallest market segment
answer
A) customers who have an elastic demand for the product
question
Some electric utilities offer one rate to commercial users and a different rate to residential users. This is an example of:
a. universal access pricing.
b. bundling.
c. peak load pricing.
d. third degree price discrimination.
a. universal access pricing.
b. bundling.
c. peak load pricing.
d. third degree price discrimination.
answer
d. third degree price discrimination.
question
12) Vacation tours to Europe invariably package visits to disparate regions: cities, mountains, and the seaside. Bundling, a type of second degree price discrimination, is most profitable when:
a. the preference rankings of vacationers travelling together are negatively correlated.
b. a preference for cities is always higher than preferences for mountain vistas.
c. preference rankings of vacationers travelling together are positively correlated.
d. preference for the seaside is always higher than preferences for city excursions.
e. no one wants to take a European vacation package to cities, mountains, and the seaside.
a. the preference rankings of vacationers travelling together are negatively correlated.
b. a preference for cities is always higher than preferences for mountain vistas.
c. preference rankings of vacationers travelling together are positively correlated.
d. preference for the seaside is always higher than preferences for city excursions.
e. no one wants to take a European vacation package to cities, mountains, and the seaside.
answer
a. the preference rankings of vacationers travelling together are negatively correlated.
question
Suppose a used-car salesman asks you the most you would be able to pay for a car and, unthinkingly, you answer truthfully, $4,800. Suppose, amazingly, that $4,800 is exactly the price for the car that you are presently examining. Then, the used-car salesman has effectively used perfect price discrimination or first degree price discrimination on you.
a. True
b. False
a. True
b. False
answer
a. True
question
Tomas increased his consumption of potato chips when the price of pistachios increased. For Tomas, potato chips and pistachios are
A) substitutes in consumption.
B) both inferior goods.
C) complements in consumption.
D) both luxury goods.
A) substitutes in consumption.
B) both inferior goods.
C) complements in consumption.
D) both luxury goods.
answer
A) substitutes in consumption.
question
If the price of music downloads was to decrease, then
A) the demand for MP3 players would decrease.
B) the demand for MP3 players would increase.
C) the supply of MP3 players would increase.
D) the quantity demanded of MP3 players would decrease.
A) the demand for MP3 players would decrease.
B) the demand for MP3 players would increase.
C) the supply of MP3 players would increase.
D) the quantity demanded of MP3 players would decrease.
answer
B) the demand for MP3 players would increase.
question
In June, buyers of titanium expect that the price of titanium will fall in July. What happens in the titanium market in June, holding everything else constant?
A) The demand curve shifts to the right.
B) The quantity demanded increases.
C) The quantity demanded decreases
D) The demand curve shifts to the left.
A) The demand curve shifts to the right.
B) The quantity demanded increases.
C) The quantity demanded decreases
D) The demand curve shifts to the left.
answer
D) The demand curve shifts to the left.
question
Suppose the cross-price elasticity of demand between grapefruit juice and orange juice is approximately -6. What does this mean?
A) A 1 percent decrease in the price of grapefruit juice leads to a 6 percent increase in orange juice consumption.
B) A 6 percent increase in the price of grapefruit juice leads to a 1 percent increase in orange juice consumption.
C) If the price of grapefruit juice rises by $1, 6 more cartons of orange juice will be purchased.
D) The demand for orange juice is 6 times more than the demand for grapefruit juice.
A) A 1 percent decrease in the price of grapefruit juice leads to a 6 percent increase in orange juice consumption.
B) A 6 percent increase in the price of grapefruit juice leads to a 1 percent increase in orange juice consumption.
C) If the price of grapefruit juice rises by $1, 6 more cartons of orange juice will be purchased.
D) The demand for orange juice is 6 times more than the demand for grapefruit juice.
answer
A) A 1 percent decrease in the price of grapefruit juice leads to a 6 percent increase in orange juice consumption.
question
Economists estimated that the price elasticity of beer is -0.30 and the income elasticity of beer is 0.09. This means that
A) an increase in the price of beer will increase the quantity demanded of beer and beer is a normal good.
B) an increase in the price of beer will lead to an increase in revenue for beer sellers and beer is a normal good.
C) a decrease in the price of beer will lead to an increase in revenue for beer sellers and beer is an inferior good.
D) an increase in the price of beer will lead to a decrease in the quantity demanded of beer and beer is a necessity.
A) an increase in the price of beer will increase the quantity demanded of beer and beer is a normal good.
B) an increase in the price of beer will lead to an increase in revenue for beer sellers and beer is a normal good.
C) a decrease in the price of beer will lead to an increase in revenue for beer sellers and beer is an inferior good.
D) an increase in the price of beer will lead to a decrease in the quantity demanded of beer and beer is a necessity.
answer
B) an increase in the price of beer will lead to an increase in revenue for beer sellers and beer is a normal good.
question
19) Assume that a 4 percent increase in income results in a 2 percent increase in the quantity demanded of a good. The income elasticity of demand for the good is
a. negative, and the good is an inferior good.
b. negative, and the good is a normal good.
c. positive, and the good is a normal good.
d. positive, and the good is an inferior good.
a. negative, and the good is an inferior good.
b. negative, and the good is a normal good.
c. positive, and the good is a normal good.
d. positive, and the good is an inferior good.
answer
c. positive, and the good is a normal good.
question
In September 2012, the average price of gasoline in the United States was $3.91 per gallon and consumers bought 5 percent less gasoline than they had during September 2011, when the average price was $3.66 per gallon. Based on these numbers, what was the arc price elasticity of demand for gasoline from September 2011 to September 2012 using the Midpoint Formula?
A) -0.33
B) -0.76
C) -2.96
D) -6.75
A) -0.33
B) -0.76
C) -2.96
D) -6.75
answer
B) -0.76
% change in quantity demanded between 2011 and 2012 = -5%
% change in price between 2011 and 2012 (using the midpoint formula) = (3.91-3.66)/((3.91+3.66)/2)100 = (0.25/3.785)100 = 6.60
Using midpoint formula, the price elasticity od demand between 2011 and 2012 = -5/6.60 = -0.7575 = -0.76
% change in quantity demanded between 2011 and 2012 = -5%
% change in price between 2011 and 2012 (using the midpoint formula) = (3.91-3.66)/((3.91+3.66)/2)100 = (0.25/3.785)100 = 6.60
Using midpoint formula, the price elasticity od demand between 2011 and 2012 = -5/6.60 = -0.7575 = -0.76
question
If the price of steel increases drastically, the quantity of steel demanded by the building industry will fall significantly over the long run because
A) buyers of steel are more sensitive to a price change if they have more time to adjust to the price change.
B) buyers of steel are less sensitive to a price change if they have more time to adjust to the price change.
C) sales revenue in the building industry will fall sharply.
D) profits will fall by a greater amount in the long run than in the short run.
A) buyers of steel are more sensitive to a price change if they have more time to adjust to the price change.
B) buyers of steel are less sensitive to a price change if they have more time to adjust to the price change.
C) sales revenue in the building industry will fall sharply.
D) profits will fall by a greater amount in the long run than in the short run.
answer
A) buyers of steel are more sensitive to a price change if they have more time to adjust to the price change.
question
Managerial economics
Select one:
a. helps managers make decisions in the face of scarcity.
b. ensures managers always make good decisions.
c. describes how pay for managers is set.
d. explains which products consumers will buy.
Select one:
a. helps managers make decisions in the face of scarcity.
b. ensures managers always make good decisions.
c. describes how pay for managers is set.
d. explains which products consumers will buy.
answer
a. helps managers make decisions in the face of scarcity.
question
Economic costs of production differ from accounting costs in that
Select one:
a. economic costs include expenditures for hired resources while accounting costs do not.
b. accounting costs are always larger than economic cost.
c. economic costs add the opportunity costs of a firm using its own resources while accounting
costs do not.
d. accounting costs include expenditures for hired resources while economic costs do not.
Select one:
a. economic costs include expenditures for hired resources while accounting costs do not.
b. accounting costs are always larger than economic cost.
c. economic costs add the opportunity costs of a firm using its own resources while accounting
costs do not.
d. accounting costs include expenditures for hired resources while economic costs do not.
answer
c. economic costs add the opportunity costs of a firm using its own resources while accounting
costs do not.
costs do not.
question
How many pounds of apples should Margie sell to maximize her profit? Refer to Table 12-2.
Table 12-2 lists the various pounds (lbs.) of apples that Margie Stattler can sell. Assume that Margie
operates in a perfectly competitive market.
a. 400 pounds
b. This cannot be determined without knowing Margie's total or marginal production costs.
c. 300 pounds
d. This can be determined only when all of the values for market price, total revenue, average
revenue and marginal revenue are given.
Table 12-2 lists the various pounds (lbs.) of apples that Margie Stattler can sell. Assume that Margie
operates in a perfectly competitive market.
a. 400 pounds
b. This cannot be determined without knowing Margie's total or marginal production costs.
c. 300 pounds
d. This can be determined only when all of the values for market price, total revenue, average
revenue and marginal revenue are given.
answer
b. This cannot be determined without knowing Margie's total or marginal production costs.
question
Figure 12-9 shows cost and demand curves facing a profit-maximizing, perfectly competitive firm.
Identify the short-run shut down point for the firm.
Select one:
a. a
b. b
c. c
d. d
Identify the short-run shut down point for the firm.
Select one:
a. a
b. b
c. c
d. d
answer
b. b
question
Sally quit her job as an auto mechanic earning $50,000 per year to start her own business. To save money she operates her business out of a small building she owns which, until she started her own
business, she had rented out for $10,000 per year. She also invested her $20,000 savings (which earned
a market interest rate of 5% per year) in her business. You are given the following information about the
first year of her operations.
Total revenue: $120,000
Cost of labor: $40,000
Cost of materials: $15,000
Equipment rental: $5,000
Foregone Salary: $50,000
Foregone Interest: $1,000
Opportunity cost of Building: 10,000
Which one is the correct answer?
a. In the first year, economic profit is -$1,000 and accounting profit is $60,000
b. In the first year, economic profit is $120,000 and accounting profit is $61,000
c. In the first year, economic profit is $70,000 and accounting profit is $60,000
d. In the first year, economic profit is $60,000 and accounting profit is $60,000
business, she had rented out for $10,000 per year. She also invested her $20,000 savings (which earned
a market interest rate of 5% per year) in her business. You are given the following information about the
first year of her operations.
Total revenue: $120,000
Cost of labor: $40,000
Cost of materials: $15,000
Equipment rental: $5,000
Foregone Salary: $50,000
Foregone Interest: $1,000
Opportunity cost of Building: 10,000
Which one is the correct answer?
a. In the first year, economic profit is -$1,000 and accounting profit is $60,000
b. In the first year, economic profit is $120,000 and accounting profit is $61,000
c. In the first year, economic profit is $70,000 and accounting profit is $60,000
d. In the first year, economic profit is $60,000 and accounting profit is $60,000
answer
In the first year, economic profit is -$1,000 and accounting profit is $60,000
question
A firm that can effectively price discriminate will charge a higher price to
Select one:
a. customers who have the more inelastic demand for the product.
b. buyers who belong to the largest market segment.
c. buyers who are members of the smallest market segment.
d. customers who have the more elastic demand for the product.
Select one:
a. customers who have the more inelastic demand for the product.
b. buyers who belong to the largest market segment.
c. buyers who are members of the smallest market segment.
d. customers who have the more elastic demand for the product.
answer
a. customers who have the more inelastic demand for the product.
question
Selling tickets in the orchestra region of the Metropolitan Opera for $55 and selling tickets in the upper
balcony for $28 to listen to Luciano Pavoratti describes which type of price discrimination?
Select one:
a.
first-degree price discrimination
b. bundling
c. third-degree price discrimination
d. This is not necessarily price discrimination.
balcony for $28 to listen to Luciano Pavoratti describes which type of price discrimination?
Select one:
a.
first-degree price discrimination
b. bundling
c. third-degree price discrimination
d. This is not necessarily price discrimination.
answer
c. third-degree price discrimination
question
If a firm charges customers $ 200 per unit of the first unit purchased, and $160 per unit for each additional unit
purchased in excess of one unit. Then, what is the economic term of this strategy?
Select one:
a. Third -degree price discrimination
b. First-degree price discrimination
c. Profit maximization pricing
d. Second-degree price discrimination
purchased in excess of one unit. Then, what is the economic term of this strategy?
Select one:
a. Third -degree price discrimination
b. First-degree price discrimination
c. Profit maximization pricing
d. Second-degree price discrimination
answer
d. Second-degree price discrimination
question
If the Apple iPhone and the Samsung Galaxy are considered substitutes, then, other things equal, an
increase in the price of the iPhone will
Select one:
a. increase the quantity demanded for the iPhone.
b. increase the quantity demanded for the Galaxy.
c. increase the demand for the Galaxy.
d. decrease the demand for the iPhone.
increase in the price of the iPhone will
Select one:
a. increase the quantity demanded for the iPhone.
b. increase the quantity demanded for the Galaxy.
c. increase the demand for the Galaxy.
d. decrease the demand for the iPhone.
answer
c. increase the demand for the Galaxy.
question
If the price of automobiles was to increase, then
Select one:
a. the quantity demanded of gasoline would decrease.
b.
c. the demand for gasoline would decrease.
d. the demand for gasoline would increase.
e. the supply of gasoline would increase.
Select one:
a. the quantity demanded of gasoline would decrease.
b.
c. the demand for gasoline would decrease.
d. the demand for gasoline would increase.
e. the supply of gasoline would increase.
answer
c. the demand for gasoline would decrease.
question
Studies have shown links between calcium consumption and a reduction in osteoporosis. How does this
affect the market for calcium?
Select one:
a. The calcium supply curve shifts to the right because of a change in tastes in favor of calcium.
b. The calcium demand curve shifts to the right because of a change in tastes in favor of calcium.
c. The calcium supply curve shifts to the left because this new information will increase the price
of calcium.
d. The calcium demand curve shifts to the left because this new information will increase the price
of calcium.
affect the market for calcium?
Select one:
a. The calcium supply curve shifts to the right because of a change in tastes in favor of calcium.
b. The calcium demand curve shifts to the right because of a change in tastes in favor of calcium.
c. The calcium supply curve shifts to the left because this new information will increase the price
of calcium.
d. The calcium demand curve shifts to the left because this new information will increase the price
of calcium.
answer
b. The calcium demand curve shifts to the right because of a change in tastes in favor of calcium.
question
Buyers rush to purchase stocks in California vineyards following a forecast of a 30 percent decline in this
year's grape harvest. What happens in the California wine market as a result of this announcement?
Select one:
a. The supply curve for California wine shifts to the left in anticipation of lower quantities in the
future.
b. The supply curve for California wine shifts to the right in anticipation of higher prices in the
future.
c. The demand curve for California wine shifts to the right in anticipation of higher prices in the
future.
d. The demand curve for California wine shifts to the left in anticipation of higher prices in the
future.
year's grape harvest. What happens in the California wine market as a result of this announcement?
Select one:
a. The supply curve for California wine shifts to the left in anticipation of lower quantities in the
future.
b. The supply curve for California wine shifts to the right in anticipation of higher prices in the
future.
c. The demand curve for California wine shifts to the right in anticipation of higher prices in the
future.
d. The demand curve for California wine shifts to the left in anticipation of higher prices in the
future.
answer
c. The demand curve for California wine shifts to the right in anticipation of higher prices in the
future.
future.
question
If the cross-price elasticity of demand for two goods is 1.25, then
Select one:
a. the two goods are substitutes.
b. the demand for one of the goods conforms to the law of demand, but the demand for the other
good violates the law of demand.
c. one of the goods is normal and the other good is inferior.
d. the two goods are luxuries.
Select one:
a. the two goods are substitutes.
b. the demand for one of the goods conforms to the law of demand, but the demand for the other
good violates the law of demand.
c. one of the goods is normal and the other good is inferior.
d. the two goods are luxuries.
answer
a. the two goods are substitutes.
question
Assume that a 4 percent decrease in income results in a 6 percent increase in the quantity demanded of
a good. The income elasticity of demand for the good is
Select one:
a.
b. negative, and the good is a normal good.
c. positive, and the good is an inferior good.
d. negative, and the good is an inferior good.
e. positive, and the good is a normal good.
a good. The income elasticity of demand for the good is
Select one:
a.
b. negative, and the good is a normal good.
c. positive, and the good is an inferior good.
d. negative, and the good is an inferior good.
e. positive, and the good is a normal good.
answer
d. negative, and the good is an inferior good.
question
In September 2012, the average price of gasoline in the United States was $3.91 per gallon and
consumers bought 5 percent less gasoline than they had during September 2011, when the average
price was $3.66 per gallon. Based on these numbers, what was the arc price elasticity of demand
(midpoint formula) for gasoline from September 2011 to September 2012?
Select one:
a. -2.96
b. -0.76
c. -6.75
d. -0.33
consumers bought 5 percent less gasoline than they had during September 2011, when the average
price was $3.66 per gallon. Based on these numbers, what was the arc price elasticity of demand
(midpoint formula) for gasoline from September 2011 to September 2012?
Select one:
a. -2.96
b. -0.76
c. -6.75
d. -0.33
answer
b. -0.76
question
Which of the following statements about the price elasticity of demand is correct?
Select one:
a. Demand is more elastic in the long run than it is in the short run.
b. Demand is more elastic the smaller the percentage of the consumer's budget the item takes
up.
c. The absolute value of the elasticity of demand ranges from zero to one.
d. The elasticity of demand for a good in general is equal to the elasticity of demand for a specific
brand of the good.
Select one:
a. Demand is more elastic in the long run than it is in the short run.
b. Demand is more elastic the smaller the percentage of the consumer's budget the item takes
up.
c. The absolute value of the elasticity of demand ranges from zero to one.
d. The elasticity of demand for a good in general is equal to the elasticity of demand for a specific
brand of the good.
answer
a. Demand is more elastic in the long run than it is in the short run.
question
The law of diminishing marginal returns states that increases in the variable input reduce the total
product.
Select one:
a. False
b. True
product.
Select one:
a. False
b. True
answer
a. False
question
We should use relatively more labor if we learn that the marginal product per dollar of labor
expenditures is less than a marginal product per dollar of capital expenditures.
Select one:
a. True
b. False
expenditures is less than a marginal product per dollar of capital expenditures.
Select one:
a. True
b. False
answer
b. False
question
If production displays economies of scale, the long-run average cost curve is
Select one:
a. upward sloping.
b. above the short-run average total cost curve.
c. downward-sloping.
d. above the long-run marginal cost curve.
Select one:
a. upward sloping.
b. above the short-run average total cost curve.
c. downward-sloping.
d. above the long-run marginal cost curve.
answer
c. downward-sloping.
question
Over time, more experienced workers will demand higher wage and therefore, will lead to an increase in
the cost of production for the producers
Select one:
a. True
b. False
the cost of production for the producers
Select one:
a. True
b. False
answer
b. False
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