question
When an entrepreneur invests his own financial capital in order to start a business,
answer
the opportunity cost of capital should be included in the economic cost of doing business.
question
The demand curve for oil should be
answer
more elastic in the long run than in the short run.
question
Jamie is a sophomore in college and has a 2.75 cumulative grade point average (GPA). His cumulative GPA will be better next semester if he
(i)performs better than he did last semester.
(ii)performs better than his cumulative GPA.
(iii)gives an average performance.
(i)performs better than he did last semester.
(ii)performs better than his cumulative GPA.
(iii)gives an average performance.
answer
ii) only
question
A movement along the production possibilities curve would imply that
answer
society has chosen a different set of outputs.
question
At what productive circumstance, a frim's AVC will converge with (approach to) average total course curve (ATC)
answer
when average fixed cost approach zero
question
As an individual consumes more of a particular commodity, the total level of utility derived from that consumption usually
answer
increases at a decreasing rate.
question
If the price of food rises, holding all other prices and money income constant for Mrs. Wang, she will have to adjust her expenditures and
answer
reach an equilibrium on a lower indifference curve.
question
The cost of producing an additional unit of output is the firm's
answer
marginal cost
question
If the cost of producing each performance of a Lake Game show is constant and the demand for tickets is inelastic, profits could be maximized by
answer
increasing ticket prices.
question
If the incomes of American buyers decline and somehow there is also a reduction in all resource (input) prices. What would we expect to occur on equilibrium price and quantity of an inferior good in the US market?
answer
the equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous
question
A good's price elasticity of demand can be calculated by using the formula
answer
percentage change in quantity demanded divided by percentage change in price.
question
The minimum possible short-run average costs are equal to long-run average costs when
answer
the plant is producing at its short-run minimum point.
question
In the short run, the additional output that results from hiring an additional unit of a variable input is the
answer
marginal (physical) product.
question
Accounting profit is equal to
answer
total revenue minus explicit costs.
question
If the price elasticity of demand is 2, a 5 percent decrease in price will increase quantity demanded by
answer
10%
question
If the calculated elasticity of demand between two points is 1.22, demand is considered
answer
elastic.
question
The fact that consumers will have to spend more on gasoline during a world oil price spike and less on other goods and services they usually purchase for their daily life. This microeconomic phenomenon
answer
is called the price-substitution effect.
question
Yao Ming graduates from college with a choice of playing professional football at $2 million a year or coaching for $50,000 a year. He decides to play football, but eight years later he quits football to be a TV star for $3 million a year. His opportunity cost at graduation was ______ and eight years later was ______.
answer
$50,000; $2 million
question
Which of the following statements about a firm's short-run variable costs is TRUE
answer
They typically include the labor cost.
question
If an individual consumes only two goods and consumption of one good increases, then in order to keep his consumption level on the same indifference curve, his consumption for the other good must
answer
decrease
question
Which of the following is assumed constant along the demand curve for gasoline?
answer
all variables affecting demand other than the price of gasoline
question
In a competitive market, when price is below the equilibrium level, the price will be driven ______ due to
answer
upward, excess demand
question
A diseconomy of scale indicates that a firm is producing its ______ at a ______ ATC.
answer
output, higher
question
Some costs do not vary with the quantity of output produced. Those costs are called
answer
total fixed cost
question
The fact that consumers will purchase more of a good that has become relatively cheaper
answer
is called the price-substitution effect.
question
At what productive circumstance, a frim's AVC will converge with (approach to) average total course curve (ATC)
answer
when average fixed cost approach zero
question
As an individual consumes more of a particular commodity, the total level of utility derived from that consumption usually
answer
increases at a decreasing rate.
question
If the price of food rises, holding all other prices and money income constant for Mrs. Wang, she will have to adjust her expenditures and
answer
reach an equilibrium on a lower indifference curve.
question
The cost of producing an additional unit of output is the firm's
answer
...
question
At what productive circumstance, a frim's AVC will converge with (approach to) average total course curve (ATC)
answer
when average fixed cost approach zero
question
As an individual consumes more of a particular commodity, the total level of utility derived from that consumption usually
answer
increases at a decreasing rate.
question
If the price of food rises, holding all other prices and money income constant for Mrs. Wang, she will have to adjust her expenditures and
answer
reach an equilibrium on a lower indifference curve.
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