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Unformatted text preview: Name Test Form A Economics 1 Quiz 3 November 17, 2010 True-False Questions: Fill in Bubble A for True, Bubble B for False. 1. If a firm is hiring the number of workers that maximizes its profits, it will also be maximizing profit per worker. 2. If the demand curve for a good is price inelastic, an outward shift in the supply curve for the good (more supplied at every price) will decrease the total revenue of suppliers. 3. Because the development of new technologies produces positive externalities, market compe- tition encourages private firms to invest too much in research and development. 4. A good is called nonrivalrous when one persons use of the good does not prohibit another person from using it. 5. If Homer has a reservation wage of $20 per hour, the minimum wage is $15 per hour, and the minimum wage exceeds the competitive equilibrium wage, Homer will be voluntarily unemployed. Multiple Choice Questions 6. Xue purchased a laptop computer two weeks ago for $2,000. Today, she can purchase a new laptop computer for $1,500, and the new computer is twice as fast! If she purchases this new laptop, she will sell her current laptop for $1,000. What is Xues opportunity cost of purchasing the new laptop? (a) $1,500 (b) $3,500 (c) $2,500 (d) $1,000 (e) $500 Economics 1 2 7. The town of St. Nicholas has twelve firms that make toys. Five of those firms are old and not very productive. If one of these old firms hires one worker, it can produce toys worth $200 per day. With two workers, its output is worth $300 per day. Seven of the firms are new and very productive. If one of these firms hires one worker, it can produce toys worth $250 per day. With two workers, its output is worth $400 per day. All the toy makers in St.$250 per day....
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