ECON-B 251 EXAM #3 STUDY GUIDE
CORRECT 100%
21,000 - ANSWERSue quit her $40,000 per year job and opened a coffee shop that she
calls Top Brew. In the first year, Top Brew earned $200,000 in revenue. For the same
year, Top Brew paid $80,000 to employees in wages, spent $40,000 on ingredients
such as coffee beans, $15,000 rent for the building to house Top Brew. Sue also used
$50,000 of her personal savings to purchase equipment for Top Brew, which she was
earning $4,000 in interest each year. Assuming no depreciation in the value of the
equipment, Sue's economic profit from Top Brew for the year is $___.
The owner's time
Interest forgone
Depreciation - ANSWERWhich of the following are examples of implicit opportunity
costs for the firm?
Choose all that apply.
symmetric - ANSWERHaving equal amount of information is known as _____
information.
principals and agents are more likely to have the same goals if the agent's pay is tied to
satisfying the principal's goals - ANSWERThe principal-agent problem suggests
many, many, identical, Buyers and sellers, neither buyers nor sellers - ANSWERIn a
perfectly competitive market there are _____ buyers, _____ sellers producing _____
products. _____ have full information and _____ have market power.
the quantity used of at least one factor of production is fixed - ANSWERThe short run is
a period of time in which
5 - ANSWERThe above table shows the total product of producing pizzas. The marginal
product of the 4th worker is equal to ___ pizzas.
fourth - ANSWERThe above table shows the total product of producing pizzas.
Diminishing returns begins when the pizzeria hires the _____ worker.
8.33 - ANSWERPatti's Pizza production function is shown in the above table. Patti rents
three ovens for $30 a day each and hires workers at a wage rate of $20 a day. If Patti
produces 18 pizzas per day, then her average total cost is $___.
2.50 - ANSWERPatti's Pizza production function is shown in the above table. Patti rents
three ovens for $30 a day each and hires workers at a wage rate of $20 a day. If Patti
increases her production of pizzas from 10 to 18 pizzas per day, then her marginal cost
is $___.
CORRECT 100%
21,000 - ANSWERSue quit her $40,000 per year job and opened a coffee shop that she
calls Top Brew. In the first year, Top Brew earned $200,000 in revenue. For the same
year, Top Brew paid $80,000 to employees in wages, spent $40,000 on ingredients
such as coffee beans, $15,000 rent for the building to house Top Brew. Sue also used
$50,000 of her personal savings to purchase equipment for Top Brew, which she was
earning $4,000 in interest each year. Assuming no depreciation in the value of the
equipment, Sue's economic profit from Top Brew for the year is $___.
The owner's time
Interest forgone
Depreciation - ANSWERWhich of the following are examples of implicit opportunity
costs for the firm?
Choose all that apply.
symmetric - ANSWERHaving equal amount of information is known as _____
information.
principals and agents are more likely to have the same goals if the agent's pay is tied to
satisfying the principal's goals - ANSWERThe principal-agent problem suggests
many, many, identical, Buyers and sellers, neither buyers nor sellers - ANSWERIn a
perfectly competitive market there are _____ buyers, _____ sellers producing _____
products. _____ have full information and _____ have market power.
the quantity used of at least one factor of production is fixed - ANSWERThe short run is
a period of time in which
5 - ANSWERThe above table shows the total product of producing pizzas. The marginal
product of the 4th worker is equal to ___ pizzas.
fourth - ANSWERThe above table shows the total product of producing pizzas.
Diminishing returns begins when the pizzeria hires the _____ worker.
8.33 - ANSWERPatti's Pizza production function is shown in the above table. Patti rents
three ovens for $30 a day each and hires workers at a wage rate of $20 a day. If Patti
produces 18 pizzas per day, then her average total cost is $___.
2.50 - ANSWERPatti's Pizza production function is shown in the above table. Patti rents
three ovens for $30 a day each and hires workers at a wage rate of $20 a day. If Patti
increases her production of pizzas from 10 to 18 pizzas per day, then her marginal cost
is $___.
