Econ 528 Midterm With complete solu on RATED A+
NEW
Managerial economics - Ans helps managers make decisions in the face of scarcity
Economic costs of produc on differ from accoun ng costs in that - Ans economic costs add the
opportunity costs of a firm using its own resources while accoun ng costs do not.
How many pounds of apples should Margie sell to maximize her profit? Refer to Table 12-2.A
table of market prices Table 12-2 lists the various pounds (lbs.) of apples that Margie Sta+ler
can sell. Assume that Margie operates in a perfectly compe ve market. - Ans This cannot be
determined without knowing Margie's total or marginal produc on costs
Figure 12-9 shows cost and demand curves facing a profit-maximizing, perfectly compe ve
firm. Iden fy the short-run shut down point for the firm. Price and Cost Curves - Ans B
Sally quit her job as an auto mechanic earning $50,000 per year to start her own business. To
save money she operates her business out of a small building she owns which, un l she started
her own business, she had rented out for $10,000 per year. She also invested her $20,000
savings (which earned a market interest rate of 5% per year) in her business.
You are given the following informa on about the first year of her opera ons.
Total revenue: $120,000
Cost of labor: $40,000
Cost of materials: $15,000
Equipment rental: $5,000
Foregone Salary: $50,000
Foregone Interest: $1,000
, Opportunity cost of Building: 10,000 - Ans In the first year, economic profit is -$1,000 and
accoun ng profit is $60,000
A firm that can effec vely price discriminate will charge a higher price to - Ans customers who
have the more inelas c demand for the product.
Selling ckets in the orchestra region of the Metropolitan Opera for $55 and selling ckets in
the upper balcony for $28 to listen to Luciano PavoraA describes which type of price
discrimina on? - Ans third-degree price discrimina on
If a firm charges customers $ 200 per unit of the first unit purchased, and $160 per unit for
each addi onal unit purchased in excess of one unit. Then, what is the economic term of this
strategy? - Ans Second-degree price discrimina on
If the Apple iPhone and the Samsung Galaxy are considered subs tutes, then, other things
equal, an increase in the price of the iPhone will - Ans increase the demand for the Galaxy.
If the price of automobiles was to increase, then - Ans the demand for gasoline would
decrease.
Studies have shown links between calcium consump on and a reduc on in osteoporosis. How
does this affect the market for calcium? - Ans The calcium demand curve shiCs to the right
because of a change in tastes in favor of calcium.
Buyers rush to purchase stocks in California vineyards following a forecast of a 30 percent
decline in this year's grape harvest. What happens in the California wine market as a result of
this announcement? - Ans The demand curve for California wine shiCs to the right in
an cipa on of higher prices in the future.
NEW
Managerial economics - Ans helps managers make decisions in the face of scarcity
Economic costs of produc on differ from accoun ng costs in that - Ans economic costs add the
opportunity costs of a firm using its own resources while accoun ng costs do not.
How many pounds of apples should Margie sell to maximize her profit? Refer to Table 12-2.A
table of market prices Table 12-2 lists the various pounds (lbs.) of apples that Margie Sta+ler
can sell. Assume that Margie operates in a perfectly compe ve market. - Ans This cannot be
determined without knowing Margie's total or marginal produc on costs
Figure 12-9 shows cost and demand curves facing a profit-maximizing, perfectly compe ve
firm. Iden fy the short-run shut down point for the firm. Price and Cost Curves - Ans B
Sally quit her job as an auto mechanic earning $50,000 per year to start her own business. To
save money she operates her business out of a small building she owns which, un l she started
her own business, she had rented out for $10,000 per year. She also invested her $20,000
savings (which earned a market interest rate of 5% per year) in her business.
You are given the following informa on about the first year of her opera ons.
Total revenue: $120,000
Cost of labor: $40,000
Cost of materials: $15,000
Equipment rental: $5,000
Foregone Salary: $50,000
Foregone Interest: $1,000
, Opportunity cost of Building: 10,000 - Ans In the first year, economic profit is -$1,000 and
accoun ng profit is $60,000
A firm that can effec vely price discriminate will charge a higher price to - Ans customers who
have the more inelas c demand for the product.
Selling ckets in the orchestra region of the Metropolitan Opera for $55 and selling ckets in
the upper balcony for $28 to listen to Luciano PavoraA describes which type of price
discrimina on? - Ans third-degree price discrimina on
If a firm charges customers $ 200 per unit of the first unit purchased, and $160 per unit for
each addi onal unit purchased in excess of one unit. Then, what is the economic term of this
strategy? - Ans Second-degree price discrimina on
If the Apple iPhone and the Samsung Galaxy are considered subs tutes, then, other things
equal, an increase in the price of the iPhone will - Ans increase the demand for the Galaxy.
If the price of automobiles was to increase, then - Ans the demand for gasoline would
decrease.
Studies have shown links between calcium consump on and a reduc on in osteoporosis. How
does this affect the market for calcium? - Ans The calcium demand curve shiCs to the right
because of a change in tastes in favor of calcium.
Buyers rush to purchase stocks in California vineyards following a forecast of a 30 percent
decline in this year's grape harvest. What happens in the California wine market as a result of
this announcement? - Ans The demand curve for California wine shiCs to the right in
an cipa on of higher prices in the future.
