QUESTION 1

1. Economic profit is
2. the difference between total revenue and the opportunity cost of all of the resources used in production.
3. the difference between total revenue and the implicit costs of using owner-supplied resources.
4. the difference between accounting profit and the opportunity cost of the market-supplied resources used by the firm.
5. the difference between accounting profit and explicit costs.

1 points  

QUESTION 2

1. Consider a firm that employs some resources that are owned by the firm. When accounting profit is zero, economic profit
2. must also equal zero.
3. is sure to be positive.
4. must be negative and shareolder wealth is reduced.
5. cannot be computed accurately, but the firm is breaking even nonetheless.

1 points  

QUESTION 3

1. Which of the following would increase the supply of corn?
2. an increase in the price of pesticides
3. a decrease in the demand for corn
4. a fall in the price of corn
5. a severe drought in the corn belt
6. a decrease in the price of wheat

1 points  

QUESTION 4

1. Which of the following would lead to a DECREASE in the demand for tennis balls?
2. An increase in the price of tennis balls.
3. A decrease in the price of tennis rackets.
4. An increase in the cost of producing tennis balls.
5. A decrease in average household income when tennis balls are a normal good.

1 points  

QUESTION 5

1. Consider this generalized linear demand realationship.
2.     Qd = 680 - 9P + 0.006M - 4Pr
3. where M is income and Pr is the price of a related good.
4. From this relationship it is apparent that the good is
5.  
6. an inferior good.
7. a substitute for good r.
8. a normal good.
9. a complement for good r.
10. both c and d.

1 points  

QUESTION 6

1. Use this data to answer this and the next question. 
2.     Demand    Qd = 50 - 4P             
3.     Supply       Qs = 20 + 2P
4. Equilibrium price and output are
5.  
6. P = $5 and Q = 70
7. P = $5 and Q = 30
8. P = $12 and Q = 44
9. P = $15 and Q = 50

1 points  

QUESTION 7

1. If the price is fixed by law at $10, there is a
2. surplus of 30 units.
3. shortage of 30 units.
4. Surplus of 40 units.
5. shortage of 10 units.

1 points  

QUESTION 8

1. Suppose that the market for engagement rings is in equilibrium. Then political unrest in South Africa shuts down the diamond mines there. South Africa is the world's primary supplier of diamonds. What will happen?
2. The equilibrium quantity of engagement rings will decrease.
3. The equilibrium price of engagement rings will decrease.
4. The demand for engagement rings will decrease.
5. The supply of engagement rings will increase.

1 points  

QUESTION 9

1. If the market price of eggs rises at the same time as the market quantity of eggs purchased decreases, this could have been caused by
2. An increase in demand with no change in supply.
3. A decrease in supply with no change in demand.
4. An increase in supply and an increase in demand.
5. An increase in supply and a decrease in demand.

1 points  

QUESTION 10

1. In order to minimize the net cost of pollution reduction, the level of pollution reduction (the amount of a pollutant not released into the environment) should be the level at which
2. The marginal benefit of reducing pollution exceeds the marginal cost of reducing pollution by the greatest possible amount.
3. The total benefit of reducing pollution equals the total cost of reducing pollution.
4. The marginal benefit of reducing pollution equals the marginal cost of reducing pollution.
5. The total cost of reducing pollution is minimized and the total benefits of reducing pollution are maximized.

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Status NEW Posted 17 May 2017 04:05 AM My Price 12.00

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