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