Refer to the information above to answer this question. What is the total variable cost of producing 50 units of output?
$150
Can not be determined
$410
$260
Which of the following statements describes the key assumptions behind the law on increasing costs?
All resources available are not fixed in the production of goods and services
All resources are equally suitable for the production of goods and services
Not all resources are equally suitable for the production of goods and services
Although resources are available in unlimited amounts, their usefulness in production is limited over time
The above table shows the daily production possibilities for a bakery. Currently the bakery bakes 60 pizzas and 180 loaves of bread, that is at alternative C. Using the above table, moving from alternative C to alternative B, what is the opportunity cost of one loaf of bread?
1 pizza pie
30 pizza pies
2 pizza pies
0.5 pizza pie
All of the following except one are examples of pecuniary economies of scale. Which is the exception?
Lower costs of advertising
Bulk buying and selling
Management and machine specialization
Lower costs of borrowing
Refer to the above production possibilities curves. Curve (a) is the current curve for the economy. The movement from curve (a) to curve (b) suggests:
An improvement in capital goods technology but not in consumer goods technology
A movement from unemployment to full employment
A decline in the total output of this society
An improvement in consumer goods technology but not in capital goods technology
A fundamental principle in demand analysis is that a change in price leads to
A movement along the demand curve
A leftward shift of the demand curve
A complementary movement on the supply curve
A rightward shift of the demand curve
The owners of Do Drop In convenience store have put $40,000 into the business and they worked a total of 80 hours during the week. Savings accounts are currently paying 5.2% interest and the going wage rate is $8 per hour. What are the week's total implicit costs for the Do Drop In?
$40
$6900
$6300
$680
What will happen to the quantity demanded if the price elasticity of demand is 2 and price increases by 10%?
It decreases by 20%
It increases by 20%
It decreases by 5%
It increases by 10%
Which of the following is true about economics?
It is more complex than reality
It deals in generalities
It is a pure science
It ignores reality in developing models
The Dean of Arts recently announced a 20% increase in tuition and explained that the increase was needed to raise the university's revenue. Which of the following might the Dean be assuming about the elasticity of demand for education at her school?
It is inelastic
It could be either elastic or perfectly elastic
It is elastic
It is perfectly elastic
What do products such as movies, tomatoes and restaurant meals have in common?
The demand for all three goods is price inelastic
The demand for all three goods is price elastic
They all have a small number of substitute goods
They are all inferior goods
What will happen to total product after the point of diminishing returns has been reached?
It will start to rise for the first time
It will continue to rise until marginal product becomes zero
It will begin to fall
It will continue to rise until marginal product begins to decline
What is the shape of the long-run average cost curve under conditions of economies of scale?
It is horizontal
It continuously rises
It continuously falls
It initially falls and then rises
Refer to the information above to answer this question. What is the marginal product of the fifth unit of labour?
20
5
38
30
Which of the following would be categorized as "land"?
Entrepreneurship
Buildings
Timber
Human capital
Suppose that jeans that were fashionable in the 1990s become unfashionable today. If other factors were held constant, then there would be in the market of jeans
A leftward shift in the demand curve
A rightward movement along the supply curve
A leftward movement along the supply curve
A rightward shift of the demand curve
Which of the following will not require an outward shift of the production possibilities curve?
An increase in the quantity of a society's labour force
An upgrading of the quality of a nation's human resources
The reduction of unemployment
The improvement of a society's technological knowledge
All of the following statements, except one, are normative statements. Which is the exception?
It is wrong for the government to tax gasoline
The government is trying to mislead people about the tax on gasoline
Lowering the taxes on gasoline would decrease the price at the pump
The taxes on gasoline should be lower
A shortage creates a situation that forces prices to _____ while a surplus creates a situation that forces prices to _____
Increase; increase
Increase; decrease
Decrease; increase
Decrease; decrease
Refer to the graph above to answer this question. What does point a represent?
Economic capacity
Total capacity
Excess capacity
Explicit capacity
If an increase in the incomes of people who live in the Los Angeles area leads to an increase in the demand for season tickets for games played by the Los Angeles Lakers professional basketball team, then these season tickets are
An income complement
An inferior good
An income substitute
A normal good
According to the above figure for a gasoline market, what happens when the price per gallon of gasoline jumps from $1 to $4?
The market shortage is replaced by market equilibrium
A surplus of 40 million gallons/day results
A gasoline surplus is replaced by a gas shortage
The market moves from a shortage of 40 million gallons/day to a surplus of 50million gallons/day
Suppose that producers of bottled water expect that the price of bottled water is going to drop next week. This would cause
An increase in the supply of bottled water today
An increase in the demand for bottled water today
The selling price of bottled water to rise today
A decrease in the supply of bottled water today
Meridith had only $16 to spend this last weekend. She was, at first, uncertain about whether to go to two movies she had been wishing to see or to buy a new CD she had recently heard. In the end she went to the movies. Which of the following statements is correct?
The opportunity cost of the two movies is $16
The opportunity cost of the two movies is one CD
The choice of the two movies and not the CD is an example of increasing costs
The choice of two movies rather than one CD was a bad one
Which of the following is a fixed cost?
Raw materials
Insurance on the factory's physical plant
Electricity to power the production process
Wages paid to labour
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