Question 1

​The level of an economic activity should be increased to the point where the ____.

Accepted Answer

A) ​Marginal cost=0 
B) Marginal revenue=0 
C) Total revenue = Total cost 
D) ​Marginal revenue - marginal cost=0 
A) ​Marginal cost=0 
B) Marginal revenue=0 
C) Total revenue = Total cost 
D) ​Marginal revenue - marginal cost=0

Question 2

Marginal revenue​

Accepted Answer

A) ​Is the additional revenue earned by selling one more unit 
B) Is always equal to the total revenue 
C) Is the difference between total revenue and total costs 
D) ​None of the above 
A) ​Is the additional revenue earned by selling one more unit 
B) Is always equal to the total revenue 
C) Is the difference between total revenue and total costs 
D) ​None of the above

Question 3

​Lemonade anyone?
Raymond decides to set up a lemonade stand every weekend for the next four weeks to save up for the latest x-men comic.He has to pay his brother Robert $10 as a one-time payment for him to not bully Raymond or drive his customers away.The lemons and sugar cost him $10 (the water is free)and his dad offers to set up his stall for him.He ends up making $15 his first weekend.Frank,his father notices this and advises Raymond to shut down the stall since he is making less than he is spending on the stall.What would you advice Raymond to do?

Accepted Answer

The anti-bullying cost that Raymond paid

Question 4

​Cooling systems II
Carl is the lead engineer on a smart HVAC cooling system that works with minimal energy and is voice activated.Given the revolutionary nature of the system,it took many failed tries to create a system that actually worked,a cost of $30,000.Now each unit sells for $6500 and it costs $5000 in raw materials and labor to produce.Carl receives an order for four new units for a customer,but when he takes the order to his manager,the manager is enraged and asks Carl why he wanted to produce something at a loss.What costs would the manager be looking at to come to this conclusion?

Accepted Answer

The manager is most likely looking at th

Question 5

A student is trying to decide whether to study for the upcoming exam or play video games.The optimal amount of time spent studying is:​

Accepted Answer

A) ​where the total benefit of studying is equal to  the total cost of studying. 
B) where the marginal benefit of studying is equal to the total cost of studying. 
C) where the marginal benefit of studying equals the marginal cost of studying. 
D) ​where the total benefit of studying equals the total cost of studying. 
A) ​where the total benefit of studying is equal to  the total cost of studying. 
B) where the marginal benefit of studying is equal to the total cost of studying. 
C) where the marginal benefit of studying equals the marginal cost of studying. 
D) ​where the total benefit of studying equals the total cost of studying.

Question 6

Use the following table to answer question
  
-​What is the average cost per unit if the firm produces 5 units?

Accepted Answer

A) ​$196 
B) $980 
C) $182 
D) ​$910 
A) ​$196 
B) $980 
C) $182 
D) ​$910

Question 7

Use the following to answer question
  
-The marginal cost of hiring the 7th worker is​

Accepted Answer

A) ​$400 
B) $1,000 
C) $200 
D) ​$0 
A) ​$400 
B) $1,000 
C) $200 
D) ​$0

Question 8

​The main difficulty in applying marginal analysis is

Accepted Answer

A) ​calculating total cost 
B) determining which costs and revenues are relevant to a particular decision 
C) calculating average cost 
D) ​All of the above 
A) ​calculating total cost 
B) determining which costs and revenues are relevant to a particular decision 
C) calculating average cost 
D) ​All of the above

Question 9

Use the following table to answer question
  
-What is the marginal cost of producing the third unit?​

Accepted Answer

A) ​60 
B) 70 
C) 90 
D) ​110 
A) ​60 
B) 70 
C) 90 
D) ​110

Question 10

​In the short run,

Accepted Answer

A) ​Some production costs are fixed 
B) All inputs are variable 
C) All inputs are fixed 
D) ​None of the above 
A) ​Some production costs are fixed 
B) All inputs are variable 
C) All inputs are fixed 
D) ​None of the above

Question 11

Use the following to answer question
  
-​If hiring the 7th worker increases total product by 5 units and the price of each unit is $2,

Accepted Answer

A) the firm should not hire the 7th worker as MRMC D) the firm should not hire the 7th worker as MRMC D) the firm should not hire the 7th worker as MR

Question 12

​If a firm produces 8 units of output with average fixed cost=$40 and average variable cost=$25,what is its total fixed cost?

Accepted Answer

A) ​$320 
B) $200 
C) $650 
D) ​$1,000 
A) ​$320 
B) $200 
C) $650 
D) ​$1,000

Question 13

​If Marginal Cost (MC)is higher than Average Cost (AC),average cost is

Accepted Answer

A) ​falling 
B) rising 
C) constant 
D) ​none of the above 
A) ​falling 
B) rising 
C) constant 
D) ​none of the above

Question 14

​Which of the following statements is TRUE?

Accepted Answer

A) ​Average cost (A
C) is irrelevant to extent decisions 
B) Average cost determines how much you produce 
C) Marginal cost (M
C) is irrelevant to extent decisions 
D) ​All of the above 
A) ​Average cost (A
C) is irrelevant to extent decisions 
B) Average cost determines how much you produce 
C) Marginal cost (M
C) is irrelevant to extent decisions 
D) ​All of the above

Question 15

​Jim's Burgers produces 600 burgers per week.Each burger sells for $3.Goody Candy orders 500 burgers for its upcoming office party from Jim's Burgers.Jim decided to accept the order for $1250 lump sum.What would be the marginal revenue per burger for this order?

Accepted Answer

A) ​$3 
B) $2.50 
C) $0.50 
D) ​It cannot be determined with the information given 
A) ​$3 
B) $2.50 
C) $0.50 
D) ​It cannot be determined with the information given

Question 16

Use the following table to answer question
  
-​What is the marginal cost of the 5th unit?

Accepted Answer

A) ​$100 
B) $105 
C) $110 
D) ​$115 
A) ​$100 
B) $105 
C) $110 
D) ​$115

The level of an economic activity should be increased to the point where the ____.

Marginal revenue

A student is trying to decide whether to study for the upcoming exam or play video games.The optimal amount of time spent studying is:

Use the following table to answer question -What is the average cost per unit if the firm produces 5 units?

Use the following to answer question -The marginal cost of hiring the 7th worker is

The main difficulty in applying marginal analysis is

Use the following table to answer question -What is the marginal cost of producing the third unit?

In the short run,

Use the following to answer question -If hiring the 7th worker increases total product by 5 units and the price of each unit is $2,

If a firm produces 8 units of output with average fixed cost=$40 and average variable cost=$25,what is its total fixed cost?

If Marginal Cost (MC)is higher than Average Cost (AC),average cost is

Which of the following statements is TRUE?

Jim's Burgers produces 600 burgers per week.Each burger sells for $3.Goody Candy orders 500 burgers for its upcoming office party from Jim's Burgers.Jim decided to accept the order for $1250 lump sum.What would be the marginal revenue per burger for this order?

Use the following table to answer question -What is the marginal cost of the 5th unit?

The One Lessor of Business

Benefits, Costs, and Decisions

Investment Decisions: Look Ahead and Reason Back

Simple Pricing

Economies of Scale and Scope

Understanding Markets and Industry Changes

Market Structure and Long Run Equilibrium

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, Trade, and Bubbles

More Realistic and Complex Pricing

Direct Price Discrimination

Strategic Games

Bargaining

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters

Exam 3: Extent How Much Decisions