ECON 208 Term test || WITH CORRECT SOLUTIONS!!
What is "Y" determined by? correct answers Labour,
Y=f(L)
What is the slope and intercept in this equation,
Y = aL + B correct answers Slope = aL(rise/run)
Intercept = B
How do we find the x and y intercepts? correct answers By setting x/y = 0, to get the other
How do we find P axis intercept with a demand function? correct answers Make it an inverse
demand function.
How do we find equilibrium price? correct answers Set Qd=Qs
What is the objective of firms? correct answers Wealth maximisation
Explain Accounting costs: correct answers Actual past costs that have been incurred
Explain economic costs: correct answers All costs relevant in decision making ( including
opportunity cost)
Give an example of explicit costs: correct answers Business spends $100 on electricity-
which could have used to buy something else
What are implicit costs? correct answers Costs already occurred, e.g. owning land
What are fore gone costs? correct answers What you could have done, e.g. renting owned
land
Write the production function: correct answers q=f(k,l)
Explain technical efficiency: correct answers Being technically efficient Occurs when a
business is producing as much output as it feasibly can, given the amount of inputs it has
How do we calculate average productiveness of inputs? correct answers Total input/Total
output
What is marginal product of labour? correct answers additional output that can be produced
by adding one more unit of input, keeping all other inputs constant.
How do we calculate MPL? correct answers Change in Q/Change in L
What does an isoquant show? correct answers The relationship between capital and labour to
produce a given amount of output (always a straight line)
What is "Y" determined by? correct answers Labour,
Y=f(L)
What is the slope and intercept in this equation,
Y = aL + B correct answers Slope = aL(rise/run)
Intercept = B
How do we find the x and y intercepts? correct answers By setting x/y = 0, to get the other
How do we find P axis intercept with a demand function? correct answers Make it an inverse
demand function.
How do we find equilibrium price? correct answers Set Qd=Qs
What is the objective of firms? correct answers Wealth maximisation
Explain Accounting costs: correct answers Actual past costs that have been incurred
Explain economic costs: correct answers All costs relevant in decision making ( including
opportunity cost)
Give an example of explicit costs: correct answers Business spends $100 on electricity-
which could have used to buy something else
What are implicit costs? correct answers Costs already occurred, e.g. owning land
What are fore gone costs? correct answers What you could have done, e.g. renting owned
land
Write the production function: correct answers q=f(k,l)
Explain technical efficiency: correct answers Being technically efficient Occurs when a
business is producing as much output as it feasibly can, given the amount of inputs it has
How do we calculate average productiveness of inputs? correct answers Total input/Total
output
What is marginal product of labour? correct answers additional output that can be produced
by adding one more unit of input, keeping all other inputs constant.
How do we calculate MPL? correct answers Change in Q/Change in L
What does an isoquant show? correct answers The relationship between capital and labour to
produce a given amount of output (always a straight line)
