Econ3020_Exam2_Fall_2023_wanswers

pdf

School

Auburn University *

*We aren’t endorsed by this school

Course

3030

Subject

Economics

Date

Feb 20, 2024

Type

pdf

Pages

Uploaded by ConstableFlowerPolarBear40

Use the following table to answer questions (1-3). 1. At an output level of 1, the average total cost is $____. a. 35 b. 85 c. 60 d. 50 2. At an output level of 3, the total cost is $____. a. 170 b. 85 c. 60 d. 50 3. Fixed cost is $____. a. 170 b. 85 c. 60 d. 50

Use the following figure to answer questions (4-5). 4. (Figure: Price and Quantity of Output I) At a market price of $27, the firm is willing to supply ____ units of the good. a. 8 b. 7 c. 5 d. 0 5. (Figure: Price and Quantity of Output I) Variable Cost (VC) at Q= 8 is a. 189 b. 68 c. 50 d. 0.25

Use the following figure to answer questions (6-7) 6. (Figure: Quantity of Goods Y and X II) The income effect, associated with the decrease in the price of good X, is demonstrated by an ______________ in X . a. increase from 3 to 4. b. increase from 4 to 5. c. decrease from 5 to 4. d. increase from 3 to 5. 7. (Figure: Quantity of Goods Y and X II) The substitution effect, associated with the decrease in the price of good X, is demonstrated by an ______________ in X . a. increase from 2 to 5. b. increase from 4 to 5. c. decrease from 4 to 4. d. increase from 3 to 5.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

8. Suppose that a firm's production function is given by Q = KL ( MP K = L and MP L = K ), where Q is quantity of output, K is units of capital, and L is units of labor. The price per unit of labor and capital are $30 and $20, respectively. How many units of labor and capital should the firm use if it wants to minimize the cost of producing 600 units of output? a. L = 20; K = 30 b. L = 30; K = 20 c. L = 40; K = 60 d. L = 25; K = 25 Use the following figure to answer question (9) 9. (Figure: Capital and Labor VI) Suppose a firm spends $4,000 per day producing a good. The wage rate per worker is $200 per day and rental rate per unit of capital is $500 per day. The firm's isocost line at the current expenditure level is represented by: a. C 1 . b. C 2 . c. C 3 . d. C 4 .

Use the following figure to answer question (10) 10. (Figure: Capital and Labor X) Which of the following statements is (are) TRUE? I. The firm minimizes the cost of producing 10,000 units of output at point C . II. If the firm chooses an input combination that lies on C 3 , the firm will be able to produce 10,000 units of output at a lower cost than at point A . III. The cost of producing 10,000 units of output is greater at point B than at point A . a. I and III b. II and III c. I d. I, II, and III Use the following figure to answer question (11) 11. (Figure: Good Y and Good X VI) Assume that the price of Good X is $100 per unit and the price of Good Y is $100 per unit. When income increases from $1,200 to $1600, Good X is a (an) _____ good. a. necessity b. luxury c. inferior d. Giffen

Use the following figure to answer question (12-15) 12. (Figure: Firm I) At the profit maximizing quantity, the firm's total revenue is $____. a. 240 b. 200 c. 120 d. 0 13. (Figure: Firm I) At the profit maximizing quantity, the firm's marginal cost is $____. a. 2 b. 20 c. 40 d. 5 14. (Figure: Firm I) At the profit maximizing quantity, the firm's total cost is $____. a. 200 b. 150 c. 40 d. 5 15. (Figure: Firm I) At the profit maximizing quantity, the firm will produce Q=____. a. 2 b. 20 c. 40 d. 5

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Use the following figure to answer question (16-17) 16. (Figure: Dog Treats and Milk II) When the price of milk drops, the income effect _____ the quantity of milk consumed from a. increases; 2 to 6 gallons b. increases; 4 to 6 gallons c. decreases; 6 to 2 gallons d. increases; 2 to 4 gallons 17. (Figure: Dog Treats and Milk II) When the price of milk drops, the substitution effect _____ the quantity of milk consumed from a. increases; 2 to 6 gallons b. increases; 4 to 6 gallons c. decreases; 6 to 2 gallons d. increases; 2 to 4 gallons

18. Menard quit his high school teaching job, which paid $60,000 per year, to start a business that prepares students for the SAT exam. His first year in business generated the following revenues and costs: Menard's economic profit is $____. a. 105,000 b. 100,000 c. 20,000 d. 15,000 19. Which of the following statements is (are) TRUE? I. As market prices increase, industry output rises because individual firms have upward-sloping marginal cost curves. II. As market prices increase, industry output rises because high-cost producers enter the industry. III. As market prices increase, industry output rises because individual firms have upward- sloping short-run supply curves. a. I, II, and III b. II and III c. III d. II

20. (Figure: Representative Firm I) Which panel shows a representative firm (operating in a perfectly competitive industry) in a long-run equilibrium? a. panel a b. panel b c. panel c d. panel d

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

21. (Figure: Capital and Labor XII) Which of the following statements is (are) TRUE? I. Panel a illustrates constant returns to scale. II. Panel b illustrates decreasing returns to scale. III. Panel a illustrates increasing returns to scale IV. Panel b illustrates constant returns to scale. a. I and IV b. II and III c. III and IV d. I and III Use the following figure (Figure: Price and Quantity III) to answer question (22-23) 22. (Figure: Price and Quantity III) If the market price is $6, this perfectly competitive firm will earn profits of: a. $27. b. $54. c. $18. d. $78.

23. (Figure: Price and Quantity III) If the market price is $8, this perfectly competitive firm will produce Q=_______ a. 6 b. 8 c. 10 d. 12 24. Lilly's Lumberyard had the following revenues and costs last year: If Lilly did not own a lumberyard, she would earn $115,000 per year as a store manager for Home Depot. Lilly's Lumberyard had an economic cost of _____ and an economic profit of _____. a. $225,000; –$75,000 b. $400,000; $35,000 c. $405,000; –$5,000 d. $210,000; $0 25. (Figure: Income and Fruitcake I) Which of the following statements is TRUE? a. Fruitcake is an inferior good regardless of income level. b. Fruitcake is a normal good regardless of income level. c. Fruitcake is a normal good until income reaches $150, and then it becomes an inferior good. d. Fruitcake is an inferior good until income reaches $150, and then it becomes a normal good.

26. Suppose a firm is producing 2,475 units of output by hiring 50 workers ( W = $20 per hour) and 25 units of capital ( R = $10 per hour). The marginal product of labor and marginal product of capital are 40 and 25, respectively. Is the firm minimizing the cost of producing 2,475 units of output? a. Yes, the ratio of the number of workers to the wage equals the ratio of the number of units of capital to the rental rate. b. No, the firm should use more labor and less capital. c. No, the firm should use more capital and less labor. d. No, the firm should use more of both labor and capital. 27. (Figure: Capital and Labor XI) Which of the following statements is (are) TRUE? I. If labor is cheaper than capital, the firm will produce at point B . II. If capital is more expensive than labor, the firm will produce at point A . III. At point A , the MRTS LK = W/R . a. II and III b. III c. I and III d. I and II

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

28. (Figure; Price and Quantity VII) If this firm operates, it earns a profit of _____, but if it shuts down, it earns a profit of _____. a. $4,000; $0 b. –$9,000; –$5,000 c. –$5,000; –$9,000 d. –$2,500; –$4,000 29. Julie spends all of her income on gasoline and pizza. Gasoline costs $4 per gallon and pizza costs $2 per slice. When Julie's income is $50 per week, she purchases 5 gallons of gasoline and 15 slices of pizza. When her income rises to $80 per week, she buys 15 gallons of gasoline and 10 slices of pizza. Which of the following statements is true? a. Both gasoline and pizza are normal goods. b. Gasoline is a luxury good. c. Pizza is a luxury good. d. Both gasoline and pizza are inferior goods. 30. Suppose the price of a Giffen good, X, decreases. In this case, the substitution effect states that the consumer purchases _____ of good X, and the total effect is _____ in consumption of good X . a. more; an increase b. more; a decrease c. less; an increase d. less; a decrease

Related Documents

Module 6 Discussion.docx

Intl 220 Quiz 8.docx

Lazar_Lab_7.docx

Castillo_F_HWA2_Memo.docx

Jada Fluker - Chpter 7 Tax Case Study: W-2, W-4, Refunds, Oh My!.pdf

Jada Fluker - 7.3 Practice : What Do Consumers Expect For Their 2021 Tax Returns?.pdf

Discussion 6 (1).docx

Week 10 Discussion I (1).docx

stat project.docx

final23.pdf

Quiz_ Higher Education Expenditures_ EDUC664_ Economics and Finance of Higher Education (B02).pdf

Competency 3 Financial Plan.docx

Recommended textbooks for you

Essentials of Economics (MindTap Course List)

Economics

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:Cengage Learning

Principles of Economics (MindTap Course List)

Economics

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:Cengage Learning

Principles of Microeconomics (MindTap Course List)

Economics

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:Cengage Learning

Principles of Economics, 7th Edition (MindTap Cou...

Economics

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:Cengage Learning

Exploring Economics

Economics

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:SAGE Publications, Inc

Microeconomics A Contemporary Intro

Economics

ISBN:9781285635101

Author:MCEACHERN

Publisher:Cengage

SEE MORE TEXTBOOKS

Recommended textbooks for you

Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou...
Economics
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Microeconomics A Contemporary Intro
Economics
ISBN:9781285635101
Author:MCEACHERN
Publisher:Cengage