question
The "law of diminishing returns" applies, as well, to the long-run wherein all inputs are variable.
answer
False, a short-run concept
question
To determine the economic viability of a capital investment, simply check to see that the cash flows of the investment, over the life of investment exceeds the cost of the investment.
answer
False, PV must be determined.
question
Opportunity costs include only implicit costs of forgone choices.
answer
False, opportunity costs include both explicit and implicit costs;
question
The existence of accounting profits are a clear signal for entry of firms into an industry.
answer
False, economic profits
question
If Y = a*X^b, where a and b are scalar parameters and X is a variable, Integral f(X) dX = (a/b+1)X^(b+1).
answer
True
question
Market forces operate through various rivalries: consumer-consumer; consumer-producer, producer-producer.
answer
True
question
Profit maximization (or loss minimization) always occurs where price is equal to marginal cost.
answer
False, MR=MC
question
If for a given function, Y=f(X), the value of the first derivative is zero at a specified value of X and the value of the second derivative is greater than zero at that same value of X, then you know that the Y function is at a local maximum at that value of X.
answer
False
question
The area under the function Y = 4.0 X - 0.6 X2 from X= 0 to X = 2 is Area = 1.4.
answer
False, F(X) = Integral (4.0 X - 0.6 X2) dX = 2 X2- 0.2 X3 evaluates to 8 - 1.6 = 6.4
question
All societies must make decisions about what to produce, for whom to produce, where to produce, and how to produce. Capitalistic systems rely heavily on markets for these decisions, but not necessarily solely.
answer
True, some public goods are not efficiently allocated by markets
False
False
question
If you could provide a rationale for the study of economics by a single word, that word would be
answer
Scarcity
question
If the marginal benefit (MB) of a given activity exceeds the marginal cost (MC), other things remaining equal, more of that activity is called for.
answer
True
question
In a production process, while the marginal product of labor can be negative, the average product is never negative.
answer
True
question
Consider a short-run production function with only one variable input, labor. When MP>AP, average output will increase with an additional unit of labor hired.
answer
True
question
The quadratic equation (Y = a X^2 + b X + c) bottom out or tops out at X = -b/(2a). It bottoms out if b>0 and tops out if b<0.
answer
False, bottoms out if a0 and tops out if a0; 13
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