# econ7 - Submitted by Le, Thao (THAOLE2) on 10/17/2011...

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Submitted by Le, Thao (THAOLE2) on 10/17/2011 8:48:42 AM Points Awarded 17.50 Points Missed 2.50 Percentage 87.5% 1. In the long run: A) all factors of production are fixed. B) all factors of production are variable. C) some factors of production are variable, while at least one factor of production is fixed. D) None of the above are correct. Points Earned: 0.5/0.5 Correct Answer(s): B 2. ________ are costs that require a monetary payment. A) Implicit costs B) Explicit costs C) Accounting costs D) B and C are correct. Points Earned: 0.0/0.5 Correct Answer(s): D 3.

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Joe runs a restaurant. He pays his employees \$200,000 per year. His ingredients cost him \$50,000 per year. Prior to running his restaurant, Joe was a lawyer earning \$150,000 per year. What would economists say is Joe's cost of running the restaurant? A) \$150,000 B) \$200,000 C) \$250,000 D) \$400,000 Points Earned: 0.5/0.5 Correct Answer(s): D 4. Jane is a student at a university. She pays \$10,000 per year in tuition, \$4,000 per year in living expenses, and \$800 per year for books. Were she not in school, she could earn \$20,000 per year working as a bookkeeper and she would not live with her parents. What is her economic cost of a year in college? A) \$10,000 B) \$13,000 C) \$30,800 D) \$34,800 Points Earned: 0.5/0.5 Correct Answer(s): C 5. A firm experiences diminishing marginal returns because: A) all factors of production are variable. B) people "learn by doing." C) all factors of production are fixed. D) at least one factor of production is fixed. Points Earned: 0.5/0.5 Correct Answer(s): D 6. Number of workers Units of output 0 0 1 10
2 30 3 44 4 55 Table 8.1 8. Refer to Table 8.1, which gives a firm's production function. Assume that all non-labor inputs are fixed. Diminishing marginal returns set in with the addition of the: A) third worker. B) fourth worker. C) fifth worker. D) sixth worker. Points Earned: 0.5/0.5 Correct Answer(s): A 7. Refer to Table 8.1, which gives a firm's production function. Assume that all non-labor inputs are fixed. The marginal product of the fourth worker is: A) 12 units. B) 11 units. C) 5 units. D) 0 units. Points Earned: 0.5/0.5 Correct Answer(s): B 8. Refer to Table 8.1, which gives a firm's production function. Assume that all non-labor inputs are fixed. Marginal product is maximized when the firm hires: A) 2 workers. B) 3 workers. C) 4 workers. D) 5 workers. Points Earned: 0.5/0.5 Correct Answer(s): A 9.

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Marginal product in the short run: A) increases at all levels of production. B) diminishes at all levels of production. C) may initially increase, then eventually decrease. D) may initially decrease, then eventually increase. Points Earned: 0.5/0.5 Correct Answer(s): C 10. Mark's Baseballs produces baseballs. Mark's Baseballs has total fixed costs of \$500. Mark's
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## This note was uploaded on 03/30/2012 for the course ECON 2302 taught by Professor Love during the Fall '08 term at Lone Star College.

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econ7 - Submitted by Le, Thao (THAOLE2) on 10/17/2011...

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