WORKSHEET 1: COST
COST is the highest valued foregone alternative. Also, note that:
cost and price are not the same concepts
cost need not be an out-of-pocket expenditure
cost refers to an action, not to a thing
the cost of produ
1. Consider the land acquisition for Stage 1.
a. What cost, if any, should be attributed to the catfish project?
b. Assuming that the currently owned site is used for this project, how should the
Gulf Shrimp Processing Division obtain a site? What discoun
1. Define the term incremental cash flow. Since the project will be financed in part by
debt, should the cash flow statement include interest expenses? Explain.
2. Should the $100,000 that was spent to rehabilitate the plant be included in the analysis?
WORKSHEET 12: EFFICIENT ALLOCATION (LEAST COST) OF PRODUCTION
Example 1: The following table represents the total cost of producting good X for four different business
firms (Firm 1, Firm 2, Firm 3 & Firm 4). If we are to efficiently
_1. If interest rates decrease, ceteris paribus, then stock prices will (a) increase; (b)
decrease; (c) stay unchanged.
_2. The Sarbanes-Oxley Act impacts (a) partnerships; (b)corporations;
_3. A firm has total revenue of $ 20 million
WORKSHEET 8: MARGINAL UTILITY
The following table represents the marginal utility of various goods (W, X, Y, Z) to a particular
consumer. If this consumer has an income of $100. , how much of each good will he consume if the
WORKSHEET 7: ELASTICITY
Price elasticity of demand = % change in quantity demanded
% change in price
There are three elasticity ranges:
Elastic: | Price elasticity of demand | > 1
When a reduction in price raises the quantity demanded enough to raise tota
Be sure to specify the units in your answers.
1. The following table indicates how many hours are needed to produce one unit of goods x & y in
countries A & B. Based on this table,
Country A 1x
Quantity of x
Marginal Value (in terms of $)
(5 points) If none of the agents has any good x an
WORKSHEET 11: PERFECT COMPETITION
For each of the following examples, you are to find the optimal (profit maximizing) output under three different cases.
In each case, the firm faces a different price and may choose to sell all the u
WORKSHEET 9: COSTS & PROFITS
Consider the following information:
Bubba owns a worm farm whose total revenues were $60,000 last year. During the year
he spent $10,000 on Worm Chow, $20,000 on farm hands (worm wranglers) to help him
WORKSHEET 3: MARGINAL VALUE
Example 1: Use the following table to answer questions 1 through 7.
Marginal Value (in terms of $)
Quantity of X
Chapter 10Fiscal Policy and the Federal Budget
1. A balanced budget occurs when
a. the national debt is reduced to zero dollars.
b. a budget deficit during one year is matched by a budget surplus in the next year.
c. transfer payments equa
Chapter 14Monetary Policy
1. The demand-for-money curve illustrates the _ relationship between the quantity demanded
of money and _.
a. inverse; the interest rate
b. direct; GDP.
c. direct; the interest rate
d. inverse; GDP
Chapter 12The Federal Reserve System
1. The Federal Reserve System is the
a. federal government agency that collects taxes and spends these receipts on tanks, bridges,
government employees' salaries, etc.
b. company that delivers packages
WORKSHEET 4: SUPPLY AND DEMAND
ECONOMICS 150, 151, 353
Assume that all relevant supply and demand curves are normally sloped. Use the following responses to answer the
questions. Some answers may be used more than once, others not at all.
WORKSHEET 6: SUPPLY AND DEMAND
ECONOMICS 150, 151, 353
Assume that all relevant supply and demand curves are normally sloped. Use the following responses to answer the questions.
Some answers may be used more than once, others not at all.
ECON 151 Summer 07 Final Exam 100 pts NAME:_
MULTIPLE CHOICE: choose the best answer.
_1. Say two firms competing in the same market decide to merge. This merger is called
(a) conglomerate; (b) horizontal; (c) vertical.
_2. Economies of scope are a ratio
Assume that all relevant supply and demand curves are normally sloped. Use the following responses to answer
questions 1-9. Some answers may be used more than once, others not at all. Each que
Millions of people all over the world trade for goods and services every day of the year. Obviously,
exchange is a very common place event. In this section, we will try to understand some of the basic
concepts of the exchange process.
WORKSHEET 15: PRICE DISCRIMINATION
In the following example, the business firm faces two distinct markets or customer groups, 1 and 2.
Assume that the firm acts as a standard monopolist within each group (i.e. charging every member
Worksheet 16 Game Theory
You and your opponent can play either strategy or and your respective payoffs are as follows:
(The first number represents your payoff, the second number rep
WORKSHEET 17: HIRING LABOR
The following table gives the amount of good X that can be produced for various
amounts of labor (all other inputs such as capital are fixed in amount). Use this
information to determine the optimal amount
WORKSHEET 18: OWNERSHIP AND PRODUCTION
1. A community of 1000 people (workers) with full employment.
2. The only production is catching Fish and each person can catch 4 Fish per day by
fishing alone on the shore
3. A boat is
WORKSHEET 22: PERFECT COMPETITION AND MONOPSONY
The competitive industry will hire workers (or any input) where the supply of the input
equals the demand. The monopsonist will hire workers at the quantity where the
Chapter 13Money and the Economy
1. Monetarists can be described as a group of macroeconomists who
a. emphasize the importance of the federal government's involvement in the economy to
dampen the harmful effects of the business cycle.