Question 11 (5 points)
The demand is highly inelastic for paintings by Vincent van Gogh. When selling paintings by van Gogh, total revenue will be ___ the higher the price is.
Question 11 options:
a) | none of these answers are correct |
|
|
|
d) | either a or b are likely to be true |
|
Save
Question 12 (5 points)
Based on the demand schedule given below for refrigerators . The price elasticity of demand from point C to point D equals ____ ; which means that the demand from point C to point D is ____. (Use the mid-point formula to compute the price elasticity of demand.)
Point | Price | Quantity Demanded |
A | $100 | 1,800 |
B | $150 | 1,400 |
C | $200 | 1,100 |
D | $250 | 900 |
Question 12 options:
a) | -0.9, perfectly elastic |
|
|
c) | -1.111, perfectly inelastic |
|
|
Save
Question 13 (5 points)
A firm produces 20 calculators that they sell for $15 each. The average variable cost for the 20 calculators is $13/unit. The fixed cost is $40. What amount of the economic profit does this firm earn?
Question 13 options:
Save
Question 14 (5 points)
A television producer must pay fixed cost of $150. He pays an additional $20 to produce every television. The market price is $50 for televisions. How many televisions must be sold in order to break even? (Firms break even when generating economic profit at $0.)
Question 14 options:
Save
Question 15 (5 points)
Which of the formula below will NEVER be used for computing the marginal cost?
Question 15 options:
the change in total cost divided by the change in total output |
the change in variable cost divided by the change in total output |
total cost divided by the total output |
All of the answers given here |
Save
Question 16 (5 points)
The total cost is $1,000 for 500 CD's and $2,000 for 1,000 CD's. Based on this information, the marginal cost of the 1,000th CD is _____.
Question 16 options:
Save
Question 17 (5 points)
Bob owns a firm that produces cars. He pays fixed cost of $1,000 for the factory. He pays an additional $100 when producing every car. In his firm, the marginal cost of the 5th car is _____.
Question 17 options:
Save
Question 18 (5 points)
Diminishing marginal returns occur when the marginal product falls as the use of
Question 18 options:
a) | all the inputs increases altogether |
|
b) | leased equipment is changed to be owned equipment |
|
c) | a certain specific input keeps increasing and use of all the other inputs is held unchanged |
|
d) | the resources has not reached efficiency |
|
Save
Question 19 (5 points)
Below, find the cost information given for the production of tires. What is the marginal cost of the fourth tire?
Quantity | Variable Cost |
0 | 0 |
2 | 10 |
4 | 30 |
6 | 60 |
Question 19 options:
Save
Question 20 (5 points)
Economies of scale arise when
Question 20 options:
a) | the total cost triples as total output doubles |
|
b) | the total cost doubles as total output triples |
|
c) | the total cost doubles as total output doubles |
|
d) | the total cost triples as total output triples |
|
Save
Question 21 (5 points)
Given below is the long run average cost schedule of a firm. Between which two quantities does the long run average cost schedule show constant returns to scale?
Quantity Produced by a Firm | Long-Run Average Cost ($ per unit) |
300 | $100 |
700 | $60 |
1,000 | $50 |
1,500 | $50 |
2,000 | $55 |
5,000 | $110 |
Question 21 options:
a) | between 1,000 and 2,000 units |
|
b) | between 1,000 and 1,500 units |
|
c) | between 300 and 700 units |
|
d) | between 300 and 5,000 units |
|
Save
Question 22 (5 points)
When market shows a surplus, the market price is most likely set at where it is ___ the equilibrium price.
Question 22 options:
Save
Question 23 (5 points)
Consider the market of orange. After Weather Channel forecast that early March frost will massively destroy Florida orange crop. Economists will predict price to ___ for orange.
Question 23 options:
increase in the harvest season |
fall in the harvest season |
remain unchanged in the harvest season |
cause demand to increase |
Save
Question 24 (5 points)
When shopping, you find 9" frozen pizza are priced between $6.99 to $12.99. These pizzas are of different brands and are made of differentiated ingredients. You do not find any brand of frozen pizza priced below $6.99 or over $11.99. Most likely, the market structure of the frozen pizza is a _____.
Question 24 options:
perfect competition |
monopoly |
oligopoly |
monopolistic competition |
Save
Question 25 (5 points)
For the unitary elastic demand, corresponding to 5% change in price, _____% change is expected in quantity sold.
Question 25 options:
Solution: The demand is highly inelastic for paintings by Vincent van Gogh