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pres08_ass5sol - W1105.002 Principles of Economics...

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W1105.002 Principles of Economics Assignment 5, due Febr. 28 th 2008 Before submitting your assignment, please make a copy for your own use. Your assignment will not be returned to you before the recitation sessions. Be sure you include: Name: Recitation Section # Multiple Choice Questions 1. In the short run: a. All costs are variable. b. There are no fixed inputs. c. The quantity supplied is fixed. d. Variable costs are higher than fixed costs. e. Total cost is the sum of variable and fixed costs. 2. Economic costs are the sum of explicit and implicit costs. An example of an implicit cost for American Electric Power (AEP), a company that produces and provides electricity to 11 states. a. Wages and salaries paid to workers on payroll. b. The payments made to suppliers of coal and other fuels. c. The emission fee paid to the Environmental Protection Agency d. Rent on land, owned by AEP, where a number of the company’s power plants are located. e. Interest paid on bonds issued by AEP . 3. The marginal product of labor (MPL) a. is always higher than the average product of labor, what economists call labor productivity. b. it increases when marginal cost increases. c. As the number of workers increases, it first rises, due to specialization, and then drops when diminishing returns kick in. d. It is always negative. e. It can be computed by dividing total costs by the number of workers employed. 4.
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This note was uploaded on 04/08/2008 for the course ECON W1105 taught by Professor Musatti during the Spring '07 term at Columbia.

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pres08_ass5sol - W1105.002 Principles of Economics...

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