Exam 10: Decision Making by Individuals and Firms

Use the following to answer questions Figure: The Marginal Benefit Curve -(Figure: The Marginal Benefit Curve) Look at the figure The Marginal Benefit Curve. The total benefit of mowing six lawns is approximately:

Which of the following is a "how much" decision?

Costs that are included in the economic concept of cost but that are NOT explicit costs are:

Tara notices that studying for one hour after class increases her economics grade by 11 points. The second hour yields a 7-point gain, the third hour yields a 4-point gain, and the fourth hour yields only a 1-point gain. This means that the marginal _____ of studying decreases with study hours.

If the marginal benefit received from consuming a good is equal to the marginal cost of production:

If at a given quantity _____, the decision maker should do _____ of the activity.

Use the following to answer questions : -(Table: Marginal Analysis of Sweatshirt Production II) Look at the table Marginal Analysis of Sweatshirt Production II. The profit at the optimal quantity of sweatshirts is:

To maximize total profit from a particular activity, consumers and firms evaluate each activity at the:

If marginal costs of production are greater than marginal benefits of production:

The amount by which an additional unit of an activity increases total benefit is:

Use the following to answer questions Scenario: Accounting and Economic Profit Rather than put the $100,000 that his grandmother left him in a mutual fund that earns 5% each year, Tommy Wang quit his job, which paid $60,000 per year, and started Wang's Wicker Furniture Store. He rented a showroom for $20,000 for the year, purchased $60,000 in wicker furniture, and incurred costs of $40,000 for sales help and advertising. Instead of using the capital for his own business, he could rent it to a rival firm and earn $5,000 a year. In his first year, his revenue was $150,000. -(Scenario: Accounting and Economic Profit) Look at the scenario Accounting and Economic Profit. What is the opportunity cost of Wang's $100,000 inheritance being used to start his business?

To maximize her grade in economics, Stacey should study until:

If the marginal cost curve is upward-sloping, as output increases, marginal costs will:

In making an "either-or" decision:

Accountants use only _____ costs in their computations.

Use the following to answer questions Figure: The Marginal Cost Curve -(Figure: The Marginal Cost Curve) Look at the figure The Marginal Cost Curve. The total cost of mowing five lawns is approximately:

Constant marginal costs occur when production of each individual unit costs:

Which of the following best describes a "how much" decision?

Use the following to answer questions : -(Table: Marginal Benefit of Sweatshirts) Look at the table Marginal Benefit of Sweatshirts. The marginal benefit of producing the third sweatshirt is:

The _____ benefit is the amount by which an additional unit of an activity increases its total benefit.