QUESTION 23

1. The demand for heart surgery is price inelastic. So it follows that
2. The percentage change in price is less than the resulting percentage change in quantity demanded.
3. If the price of heart surgery increases, total expenditure by consumers on heart surgery will rise.
4. Changes in price do not affect the number of operations demanded.
5. Both a and b.
6. All of the above.

1 points  

QUESTION 24

1. Which of the following would tend to INCREASE the elasticity of demand for good X?
2. A new discovery allows firms to produce X at a much lower cost.
3. The percent of a consumer's income spent on good X declines.
4. A new product, Y, which can be used in place of X, is introduced.
5. Both b and c.
6. All of the above.

1 points  

QUESTION 25

1. Suppose that you run a house-painting company and currently have 2 workers painting a total of 4 houses per month. If you hire a third worker, 6 houses can be painted per month. If you hire a fourth worker, 9 houses can be painted, and a fifth and sixth worker will increase the number of houses painted to 13 and 15, respectively. Diminishing returns
2. set in when the fourth worker is hired.
3. set in when the fifth worker is hired.
4. set in when the sixth worker is hired.
5. have not yet set in because output is still increasing.

1 points  

QUESTION 26

1. Average fixed cost
2. increases as output increases.
3. decreases as output increases.
4. increases if marginal cost is increasing.
5. increases if marginal cost is greater than average fixed cost.

1 points  

QUESTION 27

1. Marginal cost
2. measures how total cost changes when input prices change.
3. measures how total cost changes when one more unit of output is produced.
4. is less than average cost when average cost is decreasing.
5. both a and b
6. both b and c

1 points  

QUESTION 28

2. Suppose that the firm's only variable input is labor. When 50 workers are used, the average product of labor is 50 and the marginal product of labor is 75. The wage rate is $80 and the total cost of the fixed input is $500.
3.  
4. What is average variable cost?
5. $0.63
6. $1.60
7. $3.20
8. $10.00
9. none of the above

1 points  

QUESTION 29

1. Suppose that the firm's only variable input is labor. When 50 workers are used, the average product of labor is 50 and the marginal product of labor is 75. The wage rate is $80 and the total cost of the fixed input is $500.
2.  
3. What is the marginal cost?
4. $0.63
5. $0.94
6. $1.60
7. $3.20
8. none of the above

1 points  

QUESTION 30

1. A firm is currently producing 10 units of output; marginal cost is $24 and average total cost is $6 at this level of output. The average total cost at 9 units of output is:
2. $4
3. $5
4. $6
5. $8
6. none of the above

1 points  

QUESTION 31

1. "At Huffy's ... bicycle factory, 1,700 employees turn out 15,000 bicycles a day (in 1987). Five years ago, it required 2,200 workers to make 10,000 bikes daily." (The Wall Street Journal).
2.  
3. Holding all else equal, we can conclude that, over the past five years,
4. Huffy's average variable cost decreased.
5. Huffy's average variable cost increased.
6. Huffy's marginal cost decreased.
7. Huffy's marginal cost increased.
8. both a and c

1 points  

QUESTION 32

1. You overhear a businessman say: "We want to be big because there are economies associated with bigness." What he means is that
2. Total cost decreases as more is produced.
3. Long-run average cost decreases as more is produced.
4. Marginal cost decreases as more is produced.
5. Total fixed cost decreases as more is produced.

1 points  

QUESTION 33

1. Diseconomies of scale
2. Exist when fixed cost increases as output increases.
3. Exist when long-run average cost increases as output increases.
4. Result eventually as the firm uses more and more labor with a fixed capital stock.
5. Both a and b.
6. All of the above.

1 points  

QUESTION 34

1. If a firm is producing the level of output at which long-run average cost equals long-run marginal cost, then
2. Long-run marginal cost is at its minimum point.
3. Long-run average cost is at its minimum point.
4. Long-run total cost is at its minimum point.
5. Both a and b.
6. All of the above.

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Status NEW Posted 17 May 2017 04:05 AM My Price 15.00

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