question
from the organization's point of view
answer
The problem-solving principles analyze firm problmes
question
the number of qualified products a worker produces
answer
According to the video of Lincoln Electric, Lincoln Electric compensates its workers based on
question
No, it is a bad policy because a salesperson may not work hard after he/she reaches the cap.
answer
Is "bonus cap" for salespersons a good policy for a company?
question
Who is making the bad decision?
answer
You can analyze any problem by asking three questions. The first question to be asked is
question
act self-interestedly
answer
The rational-actor paradigm assumes the people
question
producer surplus
answer
The difference between the minimum price the producer is willing to accept and the price the producer actually receives for a product is referred to as:
question
Consumers
answer
Price ceilings are primarily intended to help
question
Larger than the total surplus
answer
A consumer values a car at 30,000 and a producer values the same car at 20,000. The transaction will not take place if a tax is imposed
question
All of the above:
Market distortions
A reduction in incentives to work
A decrease in wealth creating transactions
Market distortions
A reduction in incentives to work
A decrease in wealth creating transactions
answer
Taxes cause
question
consumer surplus
answer
The difference between the maximum price the consumer is willing to pay and the price the consumer actually pays for a product is referred to as
question
Creates wealth by moving the clothes from lower value to higher value use
answer
You are sick and tired of your old wardrobe. You decide to donate it to a charity of your choice. Your action
question
6,000 worth of buyer surplus and 4,000 of seller surplus
answer
A consumer values a car at $30,000 and a producer values the same car at $20,000. If the transaction is completed at $24,000 the transaction will generate
question
60%
answer
A consumer values a car at $30,000 and a producer values the same car at $20,000. If a tax is levied on the seller, what level of tax will result in unconsummated transaction
question
total surplus is maximized
answer
When the market is in equilibrium, with no government intervention
question
All of the above:
It allows the market to self-regulate and clear itself
It allows a person to follow his or her own self interest
It allows voluntary transaction, which create wealth
It allows the market to self-regulate and clear itself
It allows a person to follow his or her own self interest
It allows voluntary transaction, which create wealth
answer
An advantage of capitalism is that
question
the amount of money he or she is willing to pay for it
answer
An individual's value for a good or service is the
question
are an example of price ceiling
destroy wealth by preventing the movement of apartments to higher valued use.
destroy wealth by preventing the movement of apartments to higher valued use.
answer
Rent Controls
question
all decisions and actions have a cost associated with them
answer
Economic reasoning is based on the premise that
question
Moves an asset to higher value use; moves an asset to lower value use
answer
A good policy ____ and a bad policy _____
question
The government can absorb some of the surplus, but also creates a social loss since some of the wealth creating transactions are discouraged
answer
When taxes are levied on transactions, irrespective of the party they are levied on,
question
$15,000
answer
A consumer values a car at $30,000 and a producer values the same car at $20,000. If the transaction is completed at $24,000 what level of sales tax will result in unconsummated transaction?
question
It discourages wealth creating transactions through the threat of heavy penalty
answer
The illegality of organ sales from willing donors to willing recipients is ineffective because
question
Economic profits
Accounting profits
Accounting profits
answer
A manager invests $400,000 in a technology that should reduce the overall costs of production. The company managed to reduce their cost per unit from $2 to $1.85. This affects
question
A firm ignores relevant costs
answer
The hidden-cost fallacy occurs when
question
$300,000
answer
Jane makes 1000 items a day. Each day she spends 8 hours producing those items. If hired elsewhere she could have earned $250 an hour. The time sells for $15 each. Production occurs seven days a week. If the explicit costs total $150,000 per month, what is her accounting profit? Assume a month has 30 days
question
fixed costs plus variable costs
answer
total cost equals
question
170 Million
answer
A business incurs the following cost per unit: Labor 125/unit; materials 45/unit and rent $250,000/ month. If the firm produces 1,000,000 units a month, the total variable costs equal
question
A firm considers sunk costs in making decisions
A firm considers overhead or depreciation costs in making decisions
A firm considers overhead or depreciation costs in making decisions
answer
The fixed-cost fallacy occurs when
question
opportunity cost
answer
You are at an all you can eat buffet. You feel almost full. However, they just brought out your favorite dessert and you can either choose to eat that or a helping of tapioca pudding. If you choose the cupcakes, the pudding would be your
question
is equal to the cost of the next best alternative forgone
answer
The opportunity cost of an action
question
of becoming a hardware salesman would increase
answer
A car dealership union negotiates a contract that dramatically increases all salesmen's salaries. If one of the salesman is thinking of changing careers to be a hardware salesman, his opportunity cost
question
economic profits include implicit costs
answer
Which of the following statements is true?
a. Economic profits include implicit costs.
b. Economists consider sunk costs in their decision making.
c. Accounting profits include all of the opportunity costs.
d. Economic profits ignore implicit costs.
a. Economic profits include implicit costs.
b. Economists consider sunk costs in their decision making.
c. Accounting profits include all of the opportunity costs.
d. Economic profits ignore implicit costs.
question
Every decision has an opportunity cost
answer
Economists argue that
question
it is the sunk cost fallacy
answer
When a firm considers depreciation cost in making extent decisions
question
Some inputs are fixed and some inputs are variable
answer
In the short run
question
considered sunk costs, not relevant in further decision making
answer
A manager invests $400,000 in a technology that should reduce the overall costs of production. The company managed to reduce their cost per unit from $2 to 1.85. After the investment has been made, the $400,000 investment is
question
Economic profits alone cannot determine accounting profits
answer
If a firm is earning negative economic profits, it implies
question
$250,000
answer
A business incurs the following cost per unit: Labor $125/unit; Materials $45/ unit and rent $250,000/ month. If the firm produces 1,000,000 units a month, the total fixed cost equal
question
accounting profit-implicit cost
answer
economic profit=
question
$240,000
answer
A business owner makes 1000 items a day. Each day she spends 8 hours producing those items. If hired, elsewhere she could have earned$250 an hour. The item sells for $15 each. Production occurs seven days a week. If the explicit cost total $150,000 per month, what is her economic profit? assume a month has 30 days
question
$400
answer
Number of Workers
Total Cost
0. 1000
1. 2200
2. 3200
3 4000
4 4600
5. 5000
6. 5200
7. 5600
8. 6200
9. 7000
10. 8000
The marginal cost of hiring the 7th worker is
Total Cost
0. 1000
1. 2200
2. 3200
3 4000
4 4600
5. 5000
6. 5200
7. 5600
8. 6200
9. 7000
10. 8000
The marginal cost of hiring the 7th worker is
question
$25
answer
If AVC=$15 and AFC=$10, then ATC=
question
Some productions costs are fixed
answer
In the short run,
question
$1,000
answer
Number of Workers
Total Cost
0. 1000
1. 2200
2. 3200
3 4000
4 4600
5. 5000
6. 5200
7. 5600
8. 6200
9. 7000
10. 8000
If the firm hires 5 workers, the average cost equals
Total Cost
0. 1000
1. 2200
2. 3200
3 4000
4 4600
5. 5000
6. 5200
7. 5600
8. 6200
9. 7000
10. 8000
If the firm hires 5 workers, the average cost equals
question
rising
answer
If Marginal Cost (MC) is higher than average cost (AC),average cost is
question
average cost
answer
Total cost divided by the number of units produced is called
question
Marginal revenue is greater than marginal costs
answer
Managers undertake an investment only if
question
total variable cost is $17,000; total fixed cost is $2,250; total cost is $19,250
answer
A firm produces 500 units per week. It hires 20 full-time workers (40 hours/week) at an hourly wage of $15. Raw materials are ordered weekly and they costs $10 for every unit produced. The weekly cost of the rent payment for the factory is $2,250. How do the overall cost breakdown?
question
the firm should hire the 4th worker as MR>MC
answer
Number of Workers
Total Cost
0. 1000
1. 2200
2. 3200
3 4000
4 4600
5. 5000
6. 5200
7. 5600
8. 6200
9. 7000
10. 8000
If hiring the 4th worker increases total product by 50 units and the price of each unit is $15,
Total Cost
0. 1000
1. 2200
2. 3200
3 4000
4 4600
5. 5000
6. 5200
7. 5600
8. 6200
9. 7000
10. 8000
If hiring the 4th worker increases total product by 50 units and the price of each unit is $15,
question
Sell the additional stands seats at a discount since the marginal costs of the additional passenger are almost zero and fly at full capacity
answer
An airline's flight is about to take off. It has a few empty seats left abroad. If it lowers its prices, it can fill the remaining seats and fly at full capacity. What should be done
question
$800
answer
Number of Workers
Total Cost
0. 1000
1. 2200
2. 3200
3 4000
4 4600
5. 5000
6. 5200
7. 5600
8. 6200
9. 7000
10. 8000
What is the average total cost of producing 7 units if you hire 7 workers?
Total Cost
0. 1000
1. 2200
2. 3200
3 4000
4 4600
5. 5000
6. 5200
7. 5600
8. 6200
9. 7000
10. 8000
What is the average total cost of producing 7 units if you hire 7 workers?
question
incremental
answer
When economists speak of "marginal", they mean
question
3 units
answer
Harvey's Hardware is thinking about starting a line of lawnmowers to serve its customer base in the summer. The lawnmowers would be priced at $100 and Harvey the manager believes that they would sell 3 units. They have the following estimated costs. Use this information for questions 55-58
Units Produced
Labor Cost
Total cost
0 0. 100
1. 50. 150
2. 100. 200
3. 200. 300
4. 350. 450
How many units should Harvey's Housewares produce?
Units Produced
Labor Cost
Total cost
0 0. 100
1. 50. 150
2. 100. 200
3. 200. 300
4. 350. 450
How many units should Harvey's Housewares produce?
question
$100
answer
Harvey's Hardware is thinking about starting a line of lawnmowers to serve its customer base in the summer. The lawnmowers would be priced at $100 and Harvey the manager believes that they would sell 3 units. They have the following estimated costs. Use this information for questions 55-58
Units Produced
Labor Cost
Total cost
0 0. 100
1. 50. 150
2. 100. 200
3. 200. 300
4. 350. 450
What is the average cost of producing three units?
Units Produced
Labor Cost
Total cost
0 0. 100
1. 50. 150
2. 100. 200
3. 200. 300
4. 350. 450
What is the average cost of producing three units?
question
MC=$30
answer
Total costs increase from $1,500 to $1,800 when a firm increases output from 40 to 50 units. Which of the following are true?
question
marginal revenue-marginal cost=0
answer
The level of an economic activity should be increased to the point where the
question
$20
answer
If AVC=$5 and AFC=15,then AC=
question
$800
answer
Number of Workers Total Cost
0. 1000
1. 2200
2. 3200
3 4000
4 4600
5. 5000
6. 5200
7. 5600
8. 6200
9. 7000
10. 8000
If the firms hires 5 workers and produces 5 units, the average variable costs equals
0. 1000
1. 2200
2. 3200
3 4000
4 4600
5. 5000
6. 5200
7. 5600
8. 6200
9. 7000
10. 8000
If the firms hires 5 workers and produces 5 units, the average variable costs equals
question
$1,000
answer
Number of Workers Total Cost
0. 1000
1. 2200
2. 3200
3 4000
4 4600
5. 5000
6. 5200
7. 5600
8. 6200
9. 7000
10. 8000
If the firm hires 8 workers, the total fixed cost is
0. 1000
1. 2200
2. 3200
3 4000
4 4600
5. 5000
6. 5200
7. 5600
8. 6200
9. 7000
10. 8000
If the firm hires 8 workers, the total fixed cost is
question
$100
answer
Harvey's Hardware is thinking about starting a line of lawnmowers to serve its customer base in the summer. The lawnmowers would be priced at $100 and Harvey the manager believes that they would sell 3 units. They have the following estimated costs. Use this information for questions 55-58
Units Produced
Labor Cost
Total cost
0 0. 100
1. 50. 150
2. 100. 200
3. 200. 300
4. 350. 450
What is the marginal cost of producing the third unit
Units Produced
Labor Cost
Total cost
0 0. 100
1. 50. 150
2. 100. 200
3. 200. 300
4. 350. 450
What is the marginal cost of producing the third unit
question
$800
answer
A firm's fixed costs are $10 million. It sets the price at $1800 per unit and has marginal costs of $1,000
What is the firm's contribution margin?
What is the firm's contribution margin?
question
12,500
answer
A firm's fixed costs are $10 million. It sets the price at $1800 per unit and has marginal costs of $1,000
The break even quantity is
The break even quantity is
question
65
answer
A firm sells 1000 units per week. It charges $70 per unit, the average variable costs are $25, and the average costs are $65. If the fixed costs are avoidable, at what price would the firm consider shutting down in the short run
question
$25
answer
A firm sells 1000 units per week. It charges $70 per unit, the average variable costs are $25, and the average costs are $65. At what price would the firm consider shutting down in the short run?
question
Mergers
Contracts
Exchanges of hostages
Contracts
Exchanges of hostages
answer
What are some of the solutions for a hold up problem
question
$2,434.26
answer
Ricky is thinking about borrowing $10,000 from Fred. He promises Fred cash flows of $5000 for the next three years. If Fred's cost of capital is 10%, what is the Net Present Value of the investment for Fred
question
One of the parties makes a heavy investment in equipment specific to its trading partner
answer
Hold-up problems usually occur when
question
An increase in fixed costs
answer
Which of the following will increase the price needed to break even?
question
1500/(1 +0 .11)^12
answer
If the interest rate is 11%, $1500 received at the end of 12 years is worth how much today
question
6
answer
Lucy invested $10,000 at the rate of 12%. According to the rule of 72, it would take ______ years for her money to double
question
$541.32
answer
A publisher is deciding whether or not to invest in a new printer. The printer would cost $500, and it would increase cash flows by $600 for the next two years. If the cost of capital is 10% then the net present value of the investment is
question
$16.4
answer
A business produces 5,000 units per month. It spends $12,000 on raw materials. It pays wages of $20,000. Other costs include $50,000 for rent, paid by the month. In order to break even the selling price per unit will have to be
question
5
answer
A firm is deciding between two different sewing machines. Technology A has fixed costs of $500 and marginal costs of $50 whereas Technology B has fixed costs of $250 and marginal costs of $100.
At what quantity is the firm indifferent between the two technologies
At what quantity is the firm indifferent between the two technologies
question
There are zero profits
answer
Break-even quantity is a point where
question
25
answer
A firm sells 1000 units per week. It charges $70 per unit, the average variable costs are $25, and the average costs are $65. If the fixed costs are not avoidable, at what price would the firm consider shutting down in the short run?
question
$750
answer
A firm is deciding between two different sewing machines. Technology A has fixed costs of $500 and marginal costs of $50 whereas Technology B has fixed costs of $250 and marginal costs of $100.
What is the cost of production at the number of units where the company is indifferent between the two technologies?
What is the cost of production at the number of units where the company is indifferent between the two technologies?
question
$500
answer
If the annual interest rate is 10%, the net present value of receiving $550 in the next year is:
question
It will make a profit
answer
If a firm sells more than the break-even quantity,
question
Yes because the NPV>0
answer
A publisher is deciding whether or not to invest in a new printer. The printer would cost $500, and it would increase cash flows by $600 for the next two years. If the cost of capital increased to 25%, would the firm invest in the printer?
question
Fixed Costs
answer
In the short-run, a firm's decision to shut-down should not take into consideration
question
0.5.
answer
If quantity demanded for rice falls by 4% when price increases 8%, we know that the absolute value of the own-price elasticity of rice is
question
Increase
answer
If the price elasticity of demand is -0.8 and the firm increases price, revenue will
question
3.20
answer
Russellville Ice Cream Store sells ice cream cones. The price for one ice cream cone is $3.00 and the marginal cost for one cone is $2.40. The owner of the store used a survey to found out that the price of elasticity of demand is -4. What will be the optimal ice cream price?
question
0.75
answer
Puma's share of the athletic shoe market is 30% The own price elasticity of demand for Puma athletic shoes is 2.5. What would be the own price elasticity of athletic shoes as a whole
question
decrease production
answer
If current margin is smaller than desired margin, then the firm should
question
0.25
answer
Russellville Ice Cream Store sells ice cream cones. The price for one ice cream cone is $3.00 and the marginal cost for one cone is $2.40. The owner of the store used a survey to found out that the price of elasticity of demand is -4. What is the desired margin for the ice cream cones?
question
A firm should increase quantity as long as marginal revenue is greater than marginal cost
answer
Which of the following statements is true
. A firm should increase quantity as long as marginal revenue is greater than marginal cost
b. A firm should increase quantity as long as price is higher than average cost, regardless of the marginal cost
c. A firm should increase quantity as long as price is greater than marginal cost.
d. A firm should increase quantity as long as average cost is greater than price
. A firm should increase quantity as long as marginal revenue is greater than marginal cost
b. A firm should increase quantity as long as price is higher than average cost, regardless of the marginal cost
c. A firm should increase quantity as long as price is greater than marginal cost.
d. A firm should increase quantity as long as average cost is greater than price
question
An elastic demand
answer
The government decided to reduce taxes on fast-food to increase revenue. The government assumes that fast-food products have
question
0.2
answer
Russellville Ice Cream Store sells ice cream cones. The price for one ice cream cone is $3.00 and the marginal cost for one cone is $2.40. The owner of the store used a survey to found out that the price of elasticity of demand is -4. What is the actual margin for the ice cream cones?
question
1.29
answer
Jim saw a decrease in the quantity demanded for his firm's product from 8000 to 6000 units a week when he raised the price of the product from $200 to $250. What is Jim's own price elasticity of demand?
question
20%
answer
Good
Own Price elasticity of demand
Cigarettes -0.5
Alcohol -1.00
Soda -1.5
If the government wants to decrease the quantity consumed of alcohol by 20%, what percentage of tax would they have to levy on alcohol consumption?
Own Price elasticity of demand
Cigarettes -0.5
Alcohol -1.00
Soda -1.5
If the government wants to decrease the quantity consumed of alcohol by 20%, what percentage of tax would they have to levy on alcohol consumption?
question
Revenue increases by 8%
answer
If the quantity sold of two-liter Coke bottles increases by 10% when price falls by 2%, what is the total change in revenue?
question
Buy 7% fewer houses
answer
The income elasticity of demand for housing property is exactly 1.40. Due to a recession, you expect incomes to drop by 5% next year. How will consumers adjust their purchase for housing property?
question
A good whose demand decreases when income decreases
answer
What is a normal good?
question
Decrease in income
answer
If potatoes are inferior goods, which of the following will increase the demand for potatoes?
question
The demand for any individual brand is less elastic than industry aggregate demand
answer
Which of the following is false?
a. In the long run, demand curves become more elastic
b. Products with more close substitutes have more elastic demand
c. Products with many complements have less elastic demand
d. The demand for any individual brand is less elastic than industry aggregate demand
a. In the long run, demand curves become more elastic
b. Products with more close substitutes have more elastic demand
c. Products with many complements have less elastic demand
d. The demand for any individual brand is less elastic than industry aggregate demand
question
1.5
answer
If the quantity demanded of good x rises by 3% and, in response, your income goes up by 2%, the income elasticity of demand would be:
question
Bargain brand noodles
answer
Which of the following goods is most likely to have a negative income elasticity of demand?
question
The sensitivity of quantity to price
answer
The price elasticity of demand tells us about
question
An inferior good
answer
If your income goes up by 2% and, in response, the quantity demanded of good x falls by 3%, the good x can be considered
question
you would pay more for your first slice of pizza than your second
answer
Its lunch time, you are hungry and would like to have some pizza. By the law of diminishing marginal value,
question
Increase the price.
answer
Russellville Ice Cream Store sells ice cream cones. The price for one ice cream cone is $3.00 and the marginal cost for one cone is $2.40. The owner of the store used a survey to found out that the price of elasticity of demand is -4. What should the onwer do regarding the ice cream price?
question
price inelastic
answer
If a decrease in the price of a good decreases the total revenue, the demand for the good is
question
the quantity demanded increases as price falls
answer
The first law of demand states that
question
The car is a normal good for Jim
answer
Jim recently graduated from college. His income increased dramatically;from$5000 a year to $60,000 a year. Jim decided that instead of using the bus, he would buy himself a car. This implies that
question
Negative
answer
For complements, cross price elasticity of demand is:
question
these products are usually complements to the gas sales and the demand for gas is inelastic
answer
Gas stations can price the products that they sell in their convenience store a little bit higher because
question
4
answer
Number of cheeseburgers
Your valuation of the cheeseburger
1. $4
2. $3
3 $2.50
4. $2
If the cheeseburger costs $2, how many cheeseburgers would you buy
Your valuation of the cheeseburger
1. $4
2. $3
3 $2.50
4. $2
If the cheeseburger costs $2, how many cheeseburgers would you buy
question
Demand is elastic
answer
A price elasticity of demand of 2.3 implies
question
The demand for her haircuts is elastic
answer
An owner of a local salon realized that by decreasing the prices that she charges for haircuts, her revenue has increased. This implies that
question
becomes more elastic
answer
As price increases, demand typically
question
The firm is going down its learning curve
The firm's marginal productivity is increasing
The firm's marginal productivity is increasing
answer
When a firm is experiencing decreasing marginal costs, it could be because
question
Economies of scope
answer
Farmers rotate their crops between corn and soybean to increase crop yields. This behavior exhibits
question
fall ; increasing marginal costs
answer
Average costs _______initially due to the presence of fixed costs and then rise due to _________
question
If production exhibits diseconomies of scope, firm should increase the number of products to reduce costs.
answer
Which of these statements are FALSE
a.If production exhibits diseconomies of scope, firm should increase the number of products to reduce costs.
b.If production exhibits economies of scope, firm should increase the number of products to reduce costs.
c.If production exhibits diseconomies of scope, firm should reduce the number of products to reduce costs.
d.If production exhibits economies of scope, firm should increase the number of products to reduce costs
a.If production exhibits diseconomies of scope, firm should increase the number of products to reduce costs.
b.If production exhibits economies of scope, firm should increase the number of products to reduce costs.
c.If production exhibits diseconomies of scope, firm should reduce the number of products to reduce costs.
d.If production exhibits economies of scope, firm should increase the number of products to reduce costs
question
Due to rising marginal costs
answer
Average costs curves rise with production
question
per-unit costs decrease as output increases
answer
When there are economies of scale,
question
when increasing amounts of variable inputs must share a fixed input.
"fixity" of some factor of production
"fixity" of some factor of production
answer
The term "bottleneck" refers to
question
Economies of Scope
answer
It costs firm A $800 to produce five radios and it costs firm B $500 to produce five batteries. If Firm A merges with firm B, it can produce both the five radios and the five batteries for $1000. The firm has experienced
question
horizontal
answer
A firm experiencing constant economies of scale will have a long-run average cost curve that is:
question
Must be less than average cost
answer
If average cost is decreasing, then marginal cost
question
As you expand output, your marginal productivity eventually declines
answer
The law of diminishing marginal productivity states that
question
Economies of Scope
answer
The ability to lower the average costs over total production as more products are introduced
question
One of its inputs is fixed
Marginal costs are rising
Marginal costs are rising
answer
A firm could experience diseconomies of scale if
question
Specialization and division of Labor
answer
All the factors below are causes of diminishing marginal returns, except
question
A bottleneck procedure
answer
All of these could be sources of economies of scale except
question
decreasing marginal productivity
answer
When a firm is experiencing increasing marginal costs, it implies
question
lower average costs when multiple different products are produced
answer
What are economies of scope?
question
you learn from experience
b. current production decreases future unit costs
c. production today leads to lower costs in the future
b. current production decreases future unit costs
c. production today leads to lower costs in the future
answer
Learning curves mean
question
Average cost increases
answer
Once marginal costs rise above the average cost,
question
Decreasing returns to scale
answer
If long run average costs rise with output, you have
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
