1. April quit her job as an accountant at Ernst and Young, where she was paid $45,000 per year. She started her own landscaping business. She rents machines and tools for $50,000 and pays $10,000 as wages to her help. These are her only costs. April earned total revenue of $100,000. a. Her accountant calculates her profit as $50,000. b. Both answers A and B are correct. c. She has an economic loss. d. Her explicit cost is $105,000. 2. Which of the following does NOT influence the price elasticity of demand? a. the price of the good relative to total income b. the number of substitutes available to consumers c. the amount by which the demand curve shifts when the price of another good changes d. the time period buyers have to respond to a price change 3. If the price of a six-pack of Pepsi falls from $4 to $3 and the quantity purchased increases 80 percent, then demand is a. inelastic. b. unit elastic. c. elastic. d. perfectly inelastic. 4. Goods that can be produced at a constant or very gently rising opportunity cost have a. an inelastic demand. b. an inelastic supply. c. an elastic demand. d. an elastic supply.
1. April quit her job as an accountant at Ernst and Young, where she was paid $45,000 per year. She started her own landscaping business. She rents machines and tools for $50,000 and pays $10,000 as wages to her help. These are her only costs. April earned total revenue of $100,000. a. Her accountant calculates her profit as $50,000. b. Both answers A and B are correct. c. She has an economic loss. d. Her explicit cost is $105,000. 2. Which of the following does NOT influence the price elasticity of demand? a. the price of the good relative to total income b. the number of substitutes available to consumers c. the amount by which the demand curve shifts when the price of another good changes d. the time period buyers have to respond to a price change 3. If the price of a six-pack of Pepsi falls from $4 to $3 and the quantity purchased increases 80 percent, then demand is a. inelastic. b. unit elastic. c. elastic. d. perfectly inelastic. 4. Goods that can be produced at a constant or very gently rising opportunity cost have a. an inelastic demand. b. an inelastic supply. c. an elastic demand. d. an elastic supply.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1. April quit her job as an accountant at Ernst and Young, where she was paid $45,000 per year. She started her own landscaping business. She rents machines and tools for $50,000 and pays $10,000 as wages to her help. These are her only costs. April earned total revenue of $100,000.
a. Her accountant calculates her profit as $50,000.
b. Both answers A and B are correct.
c. She has an economic loss.
d. Her explicit cost is $105,000.
2. Which of the following does NOT influence the price elasticity of demand ?
a. the price of the good relative to total income
b. the number of substitutes available to consumers
c. the amount by which the demand curve shifts when the price of another good changes
d. the time period buyers have to respond to a price change
3. If the price of a six-pack of Pepsi falls from $4 to $3 and the quantity purchased increases 80 percent, then demand is
a. inelastic.
b. unit elastic.
c. elastic.
d. perfectly inelastic.
4. Goods that can be produced at a constant or very gently rising opportunity cost have
a. an inelastic demand.
b. an inelastic supply.
c. an elastic demand.
d. an elastic supply.
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