Econ 104 exam 1 review - Econ 104 exam 1 review*practice...

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Econ 104 exam 1 review **practice exam** Extra hours open Total revenue 1 50 2 75 ; mb=$25 > mc $10 3 95; mb =$20 >mc $10 4 110; mb=$15 > mc $10 5 119; mb=$9 < mc $10 6 125; mb=$6 < mc $10 2. Opening two hours instead of one leads to a marginal benefit of $25 3. Since she is willing to stay open for 6 hours, we know she will maximize her revenues at 6 hours; any more than that and she will not be making any money. 4. Since the fourth hour is the last time MB > MC, using marginal analysis, she should only stay open for 4 more hours 19. PPF shows maximum attainable combinations of x+y goods. A movement from y to z tell us that the ppf shifted out on the plastic side, but not the food 20. An increase in unemployment would not cause a shift of the ppf but would instead move the
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