A person starts his own business This person quits ha $40,000 a year job, rents

Question

A person starts his own business This person quits ha $40,000 a year job, rents an office for $15,000 a year pays wages and salaries of $50,000 a year, utilities of $4,000 a year and materials of $20,000. This person uses his own automobile rather than leasing an equivalent automobile for $6,000 if revenues are $140,000, his accounting and economic profit are respectively $46,000 and $11,000 $45,000 and $5,000 $51.000 and $5 000 $51,000 and $45,000 The rate of change m total utility equals Marginal utility The change in utility Marginal utility divided by change in quantity Rate of change of marginal utility divided by price Which best descries accounting profit TR + TC Fern's total revenues + firm's explicit costs (Price times Quantity) + (Cost times Quantity) All of the above can be used to describe an accounting profit. Which of the following would not be considered as a fixed cost The wages paid to salaried employees Lease or rent paid for the use of capital Shipping costs Liability Insurance purchased by the firm The marginal revenue curve Can be a horizontal curve Can be a downward sloping curve Is dependent of the market structure (or market environment) All of the above can be used to describe a marginal revenue curve Constant return of scale are illustrated by A falling long-run ATC A constant long-run ATC An increasing long-run ATC A long-run ATC that is shaped like an upside down U At an OSU football game we observe people eating hot dogs chips and burgers If all are priced the same and we observe Scarlet eating a hot dog and Grey eating a burger, we can conclude that Brutus will be eating chips Scarlet Iikes hot dogs better than Grey does and Grey likes burgers better than Scarlet does Scarlet derives the same amount of utility from eating a hot dog as Grey derives from eating a burger Scarlet derives more utility from eating a hot dog than from eating a burger or chips, while Grey derives more utility from eating a burger than from eating a hotdog or chips. The minimum ATC will occur when the ATC is equal to the AVC MR MC P = D = MR = MC As an individual consumes more of a particular commodity, the total utility derived from that consumption will Remain constant Increase at a constant rate Increase at an increasing rate Increase at a decreasing rate If the average product of 20 workers is 100 widgets and the average product of 21 workers is 99 widgets, then the marginal product of the 21 workers is 99 widgets, then 1 widget 5 widgets 79 widgets 99 widgets.

Explanation / Answer

22. A Marginal Utility Marginal utility is the additional satisfaction a consumer gains from consuming one more unit of a good or service. Marginal utility is an important economic concept because economists use it to determine how much of an item a consumer will buy.

23. accounting profit The total revenue minus Total costs, properly chargeable against goods sold.

24. A Some fixed costs change in a stepwise manner as output changes and therefore may not be totally fixed. Also note that many cost items have both fixed and variable components. For example, management salaries typically do not vary with the number of units produced. However, if production falls dramatically or reaches zero, layoffs may occur. Economically, all costs are variable in the end.

25. D. Marginal revenue can be represented in a table or as a curve. For a perfectly competitive firm, the marginal revenue curve is a horizontal, orperfectly elastic, line. For a monopoly, oligopoly, or monopolistically competitive firm, the marginal revenue curve is negatively sloped.

28. A

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