Version DEcon 102 Spring 2016Dr. Tia HilmerExam 3 1. Katherine gives piano lessons for $20 per hour. She also grows flowers, which she arranges and sells at the localfarmer’s market. One day she spends 5 hours planting $50 worth of seeds in her garden. Once the seeds havegrown into flowers, she can sell them for $150 at the farmer’s market. Katherine’s accounting profits are a. $0, and her economic profits are $100.b. $0, and her economic profits are $-100.c. $100, and her economic profits are $100.d.$100,andhereconomicprofitsare$0. 2. Economists assume that the typical person who starts her own business does so with the intention of 3.The Three Amigo’s company produced and sold 500 dog beds. The average cost of production per dog bed was $50. Each dog be sold for a price of $65. The Three Amigo’s total costs are 4. Billy’s Bean Bag Emporium produced 300 bean bag chairs but sold only 275 of the units it produced.The average cost of production for each unit of output produced was $100. The price for each of the 1
Version D275 units sold was $95. Total profit for Billy’s Bean Bag Emporium would beTable 13-1Number of WorkersTotal OutputMarginal Product00--130245360450540 5.Refer to Table 13-1. What is total output when 3 workers are hired? a. 45b. 752
Version Dc.135d. 30Figure 13-1 6.Refer to Figure 13-1. Suppose the production function shifts from TP1 to TP2. Such a shift in the total productcurve is most likely due to an increase in the firm's 7. On a 100-acre farm, a farmer is able to produce 3,000 bushels of wheat when he hires 2 workers. He is able toproduce 5,000 bushels of wheat when he hires 3 workers. Which of the following possibilities is consistent with theproperty of diminishing marginal product?
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