Eco(Final)

Final Exam

SKIP TO: SYSTEM NAVIGATION

* Question 1

2 out of 2 points

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  | You own two factories to produce bicycles. In factory 1 the average product of labor is 12 bicycles a day and in factory 2 the average product of labor is 18 bicycles a day. This information tells you that you should: | | | |

| Selected Answer: |  d. make no changes until you get more information that would be relevant to the situation. |

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* Question 2

2 out of 2 points

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  | You have driven 1,000 miles on a vacation and then you notice that you are only 50 miles from an attraction you hadn’t known about, but would really like to see.  In computing the opportunity cost of visiting this attraction you had not planned to visit, you should include | | | |

| Selected Answer: |  c. the cost of driving the next 50 miles, but not the cost of driving the first 1,000. |

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* Question 3

2 out of 2 points

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  | Suppose that the firm's only variable input is labor. When 50 workers are used, the average product of labor is 50 and the marginal product of labor is 75. The wage rate is $80 and the total cost of the fixed input is $500. What is average variable cost? | | | |

| Selected Answer: |  b.$1.60 |

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* Question 4

0 out of 2 points

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  | Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when no workers are hired. In addition, suppose that marginal cost of the third worker hired is $40, and the average total cost when three workers are hired is $50. What is the total cost of production when three workers are hired? | | | |

| Selected Answer: |  d. $120 |

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* Question 5

2 out of 2 points

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  | Use the following demand and supply functions to answer the following question:

Demand:     Qd = 50 - 4P

Supply       Qs = 20 + 2P

Equilibrium price and quantity are | | | |

| Selected...