microeconomics-i-practice-problems

pdf

School

Carleton University *

*We aren’t endorsed by this school

Course

201

Subject

Economics

Date

Jan 9, 2024

Type

pdf

Pages

Uploaded by DeaconDonkeyMaster655

Studocu is not sponsored or endorsed by any college or university Microeconomics I Practice Problems Microeconomic Theory 1 (University of Waterloo) Studocu is not sponsored or endorsed by any college or university Microeconomics I Practice Problems Microeconomic Theory 1 (University of Waterloo) Downloaded by Andreea Glavan (andreeaglavan4@gmail.com) lOMoARcPSD|17838507

7/8/2021 Microeconomics I webcache.googleusercontent.com/search?q=cache:u9i0Aqqkg_0J:mx.nthu.edu.tw/~hlchuang/Econ2061_2009/2009.12.25_MicroeconomicsI_quiz2%2520_Ans.doc+… 1/7 This is the HTML version of the file http://mx.nthu.edu.tw/~hlchuang/Econ2061_2009/2009.12.25_MicroeconomicsI_quiz2%20_Ans.doc . Google automatically generates HTML versions of documents as we crawl the web. Tip: To quickly find your search term on this page, press Ctrl+F or ⌘ -F (Mac) and use the find bar. Microeconomics I Quiz#2 Answer Key Fall 2009 12/29(Tue) （ Notice ：若題⽬有要求，計算過程及圖形繪製請清楚說明） I. Multiple choice questions (3*15=45%) 1 2 3 4 5 6 7 8 9 10 C B B A B A B C B A 11 12 13 14 15 C A C B B 1) Assume a consumer has a horizontal demand curve for a product. His consumer surplus from buying the product A) is maximized. B) can't be calculated. C) equals zero. D) Need more information. Answer: C Topic: Consumer Welfare 2) In response to an increase in the wage rate, the substitution effect will cause a person to A) supply fewer hours of labor. B) supply more hours of labor. Downloaded by Andreea Glavan (andreeaglavan4@gmail.com) lOMoARcPSD|17838507

7/8/2021 Microeconomics I webcache.googleusercontent.com/search?q=cache:u9i0Aqqkg_0J:mx.nthu.edu.tw/~hlchuang/Econ2061_2009/2009.12.25_MicroeconomicsI_quiz2%2520_Ans.doc+… 2/7 C) supply the same hours of labor. D) have a backward bend in her labor supply curve. Answer: B Topic: Deriving Labor Supply Curves 3) The above figure shows the market demand curve for telecommunication while driving one's car (time spent on the car phone). At the current price of 35¢ per minute, consumer surplus equals A) $301. B) $924.50. C) $1,225.50. D) $1,250. Answer: B Topic: Market Consumer Surplus 4) In the long run, all factors of production are A) variable. B) fixed. C) materials. D) rented. Answer: A Topic: Production 5) Which situation is most likely to exhibit diminishing marginal returns to labor? A) a factory that obtains a new machine for every new worker hired B) a factory that hires more workers and never increases the amount of machinery C) a factory that increases the amount of machinery and holds the number of worker constant D) None of these situations will result in diminishing marginal returns to labor. Answer: B Topic: Short-Run Production: One Variable and One Fixed Input Downloaded by Andreea Glavan (andreeaglavan4@gmail.com) lOMoARcPSD|17838507

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

7/8/2021 Microeconomics I webcache.googleusercontent.com/search?q=cache:u9i0Aqqkg_0J:mx.nthu.edu.tw/~hlchuang/Econ2061_2009/2009.12.25_MicroeconomicsI_quiz2%2520_Ans.doc+… 3/7 6) The steeper an isoquant is A) the greater is the marginal productivity of labor relative to that of capital. B) the greater is the substitutability between capital and labor. C) the greater is the need to keep capital and labor in fixed proportions. D) the greater is the level of output. Answer: A Topic: Long-Run Production: Two Variable Inputs 7) Suppose the production function for a certain device is q = L + K. If neutral technical change has occurred, which of the following could be the new production function? A) q = L + 5K B) q = 5 ∗ (L + K) C) q = 5L + K D) All of the above are possible. Answer: B Topic: Productivity and Technical Change 8) Sarah earns $40,000 per year working for a large corporation. She is thinking of quitting this job to work full time in her own business. She will invest her savings of $50,000 (which currently has an annual 10% rate of return) into the business. Her annual opportunity cost of this new business is A) $0. B) $40,000. C) $45,000. D) $90,000. Answer: C Topic: Measuring Costs 9) Johnny has worked as a CPA for five years and wants to open his own public accounting practice. The cost of his college degree in accounting represents A) the opportunity cost of this endeavor. Downloaded by Andreea Glavan (andreeaglavan4@gmail.com) lOMoARcPSD|17838507

7/8/2021 Microeconomics I webcache.googleusercontent.com/search?q=cache:u9i0Aqqkg_0J:mx.nthu.edu.tw/~hlchuang/Econ2061_2009/2009.12.25_MicroeconomicsI_quiz2%2520_Ans.doc+… 4/7 B) a sunk cost. C) an expense. D) a variable cost. Answer: B Topic: Measuring Costs 10) Suppose the total cost of producing T-shirts can be represented as TC = 50 + 2q. Which of the following statements is TRUE at all levels of production? A) MC = AVC B) MC = AC C) MC > AFC D) All of the above. Answer: A Topic: Short-Run Costs 11) Suppose the short-run production function is . If the marginal cost of producing the tenth unit is $5, what is the wage per unit of labor? A) $1 B) 5¢ C) 25¢ D) It cannot be determined without more information. Answer: C Topic: Short-Run Costs 12) If an isocost line crosses the isoquant twice, a cost minimizing firm will A) use a different isocost line to select the bundle of inputs. B) use the input bundle associated with the intersection on the higher point of the isoquant. C) use the input bundle associated with the intersection on the lower point of the isoquant. D) Both B and C. Answer: A Topic: Long-Run Costs Downloaded by Andreea Glavan (andreeaglavan4@gmail.com) lOMoARcPSD|17838507

7/8/2021 Microeconomics I webcache.googleusercontent.com/search?q=cache:u9i0Aqqkg_0J:mx.nthu.edu.tw/~hlchuang/Econ2061_2009/2009.12.25_MicroeconomicsI_quiz2%2520_Ans.doc+… 5/7 13) A change in relative factor prices will always result in A) a change in the slope of the isoquants. B) a tangency between the new isocost line and a new isoquant. C) a rotation of the isocost lines. D) All of the above. Answer: C Topic: Long-Run Costs 14) If the isoquants are straight lines or L-shaped, then a cost-minimizing firm will A) not be able to minimize costs. B) find the lowest isocost line touching the relevant isoquant. C) find the highest isocost line touching the relevant isoquant. D) choose not to produce any output. Answer: B Topic: Long-Run Costs 15) Long-run average cost is never greater than short-run average cost because in the long run A) capital costs equal zero. B) the firm can move to the lowest possible isocost curve. C) wages always increase over time. D) wages always decrease over time. Answer: B Topic: Lower Costs in the Long Run Downloaded by Andreea Glavan (andreeaglavan4@gmail.com) lOMoARcPSD|17838507

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

7/8/2021 Microeconomics I webcache.googleusercontent.com/search?q=cache:u9i0Aqqkg_0J:mx.nthu.edu.tw/~hlchuang/Econ2061_2009/2009.12.25_MicroeconomicsI_quiz2%2520_Ans.doc+… 6/7 II. Problem 1(ch5, Q17) (25%) If an individual’s labor supply curve slops forward at low wage and bends backward at high wages, is leisure a Giffen good? If so, at high or low wage rates? Ans: 17. Leisure is not a Giffen good. When the wage increases, it increases the opportunity set of the individual. If leisure is a normal good, the individual will purchase more of it as wages rise, just as he or she may purchase more of other commodities. When the income effect dominates, it generates a backward-bending labor supply curve at high wages. If leisure is inferior, the income and substitution effects reinforce one another and leisure falls as the wage increases. 2.(ch6, Q8) (30%) The production function at Ginko’s Copy Shop is q=1000* min(L,3K), where q is the number of copies per hour, q , L is the number of workers, and K is the number of copy machines. a. Draw the isoquants for this production function. b. Draw the total production, average production, and marginal production of labor curves for this production function for some fixed level of capital. Ans: 8. a. See Figure 6.5a Figure 6.5a b. See Figure 6.5b. Assume the number of copy machines K is ﬁxed at 1. Then production function is Q ฀ 1000 * min( L , 3). For L ฀ ฀ 3, Q ฀ 1000 L ; for L ฀ 3, Q ฀ 3000. Downloaded by Andreea Glavan (andreeaglavan4@gmail.com) lOMoARcPSD|17838507

Related Documents

ECON 2220 E Fall 2023 Assignment 3.pdf

Chapter 5 Reflection Assignment.docx

Chapter 7 & 8 (Reflection Assignment).docx

Chapter 15 Reflection Assignment.docx

Different industries require different methods for forecasting demand.docx

Sample Problems and Answers based on the lecture from Chapter 13.pdf

econ 311 first paragraph.docx

commitmenttochange8_ahoppock.docx

week 5 5 .png

Instructions-Assignment SAHIE & HCUP UMBC (3).docx

PS6.pdf

Yield Final test Preparation 1 empty.docx

Recommended textbooks for you

Managerial Economics: A Problem Solving Approach

Economics

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Cengage Learning

Economics:

Economics

ISBN:9781285859460

Author:BOYES, William

Publisher:Cengage Learning

Exploring Economics

Economics

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:SAGE Publications, Inc

Principles of Economics 2e

Economics

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:OpenStax

Micro Economics For Today

Economics

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Cengage,

Survey Of Economics

Economics

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Cengage,

SEE MORE TEXTBOOKS

Recommended textbooks for you

Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Economics:
Economics
ISBN:9781285859460
Author:BOYES, William
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
Micro Economics For Today
Economics
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Cengage,
Survey Of Economics
Economics
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Cengage,