spring 2008 exam 2

# Table labor and output referring to the accompanying

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24. (Table: Labor and Output) Referring to the accompanying table, the marginal product of the fifth worker is: A) 4. B) 3. C) 40. D) 8. 25. You decide to quit your \$60,000 per year job as an information-technology specialist and illustrate children's books. At the end of the first year of illustrating, you have earned \$20,000. You also spent \$5,000 for paint and paper. Your economic profit in the first year as an illustrator is:

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ECON 2106 Shelby Frost Exam 2 11:00am TR Spring 2008 Version A Page 11 Use the following to answer question 26: Figure: Revenues, Costs, and Profits 26. (Figure: Revenues, Costs, and Profits) In the accompanying figure, at the profit-maximizing quantity of output, total revenue is \$______, total cost is \$______, and profit is \$______. 27. Consider a perfectly competitive firm in the short run. Assume that it is sustaining economic losses but continues to produce. At the profit-maximizing (loss-minimizing) output, all of the following statements are correct except :
ECON 2106 Shelby Frost Exam 2 11:00am TR Spring 2008 Version A Page 12 Use the following to answer question 28: Table: Marginal and Total Benefit Number of games Total benefit 0 0 1 50 2 90 3 120 4 140 5 152 6 160 7 164 8 162 28. (Table: Marginal and Total Benefit) Rodger is deciding how many football games he wants to attend this year. The total benefit that Rodger receives from football games is shown in the accompanying table. Rodger's marginal benefit from increasing the number of games that he attends from 2 to 3 is: A) 10. B) 20. C) 30. D) 40. 29. Krista operates a dry-cleaning business in Tampa that incurs \$900 per month in fixed costs. Last month her total output equaled 3,000 pounds of clothes. This month her total output fell to 2,700 pounds. This means her average fixed cost ______ by a little more than ______ . 30. One characteristic of a perfectly competitive market is that there are ______ sellers of the good or service. 31. The ______ is the increase in output obtained by hiring an additional worker. product

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