ec1301midterm_sem1_2006-7 - M ULTIPLE CHOICE. Choose the...

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MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. .- - - - - - -- - Units of Capital Number of Workers OutputiDab Table 1 1) Kefer to Table 1. In this -run scenario. the marginal product of the 4th worker is A) short. 60 units of output. B) long. 60 units of output. C) short, 40 units of output. D) long, 40 units of output Table 2 2) '4 group of people has formed a house cleaning and yard maintenance business. The number of houses or yards that they can clean or maintain in any given day is depicted in Table 2. The opportunity cost of cleaning the second house in a day is: A) 18 yards. B) 2 yards. C) 3 yards. D) 1 yard. 3 ) A firm produces its product using both capital and labor. When it does not change its capital usage. but doubles its labor input. its output increases by less than 50%. Which of the following is the most likely explanation of this finding? A) the principle of diminishing returns B) the principle of opportunity cost C) the principle of voluntary exchange D) the marginal principle
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Market A B C D E Benefit per advertisement $6 $5 $12 $8 Cost per advertisement $4 $2 $4 $6 4) Table 3 shows the benelits and cost5 (!i";ld;.cr;:isinp In fi~t: cijfkrt'ilt markets (iil ni.i!lions of dollars). If Jeremy were to purchase no more thail one id\ erzisemerit I:-I each ~.iiarlic~ il~~~i if Jeremy is responsible for allocating up to $10 million in the markets to maximize thc marginal benefit per dollar spent on advertising, what would the total benefits be'? A) $14 million B) $1 7 million C) $20 million D) $23 million Table 4 Hours of operation 1 5) Julianne runs a business and needs to decide how many hours to stay open. Table 4 illustrates her marginal costs of staying open for each additional hour. Suppose that Julianne's marginal benefit of staying open per hour is $16. If she is following the marginal principle, how many hours should Julianne stay open? A) 7 hours B) 4 hours C) 3 hours D) 5 hours Marginal cost 4 6) Suppose that ramen noodles are an inferior good. When income decreases the equilibrium quantity of ramen noodles will and the equilibrium price of ramen noodles will A) rise: rise rise; fall C) fall; rise D) fall; fall
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Quantity of Guitars Figure 1 7) Figure 1 illustrates the supply of guitars. An increase in the price of rosewood, which is used to make guitars. would most likely cause a movement from: A) S1 to SO. B) S1 to S2. C) point B to point C. D) point B to point A. 8) Suppose that the percentage change in supply is 20% the price elasticity of demand is 3, and the percentage change in the equilibrium price is 4%. What is the price elasticity of supply? A) 5 B) 2 C) 4 Dl 0 9) Which of the following goods is likely to have the most elastic demand? A) cigarettes. B) electricity. C) movie. D) gasoline. 10) The total revenue of Grandma's Fudge Factory is equal to: A) elasticity of demand divided by percentage change in quantity.
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ec1301midterm_sem1_2006-7 - M ULTIPLE CHOICE. Choose the...

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