Economics 308 - Managerial Economics » Summer 2023 » Quiz 1 Chs.1-2

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Question #1
As more firms enter an industry:
A.   prices rise.
B.   None of the statements associated with this question are correct.
C.   economic profits decrease.
D.   accounting profits increase.
Question #2
To maximize profits, a firm should continue to increase production of a good until:
A.   average cost equals average revenue.
B.   marginal revenue equals marginal cost.
C.   total revenue equals total cost.
D.   profits are zero.
Question #3
Which of the following pairs of goods are probably complements?
A.   Steak and chicken.
B.   Hamburgers and ketchup.
C.   Televisions and roller skates.
D.   Frozen yogurt and ice cream.
Question #4
In a competitive market, the market demand is Qd = 60 − 6P and the market supply is Qs = 4P. A price ceiling of $3 will result in a
A.   surplus of 12 units.
B.   shortage of 30 units.
C.   surplus of 30 units.
D.   shortage of 15 units.
Question #5
The law of supply states that, holding all else constant, as the price of a good falls:
A.   quantity supplied falls.
B.   quantity demanded falls.
C.   quantity supplied rises.
D.   quantity demanded rises.
Question #6
Economic profits are:
A.   total revenue minus total opportunity cost.
B.   marginal revenue minus marginal cost.
C.   total revenue minus total cost.
D.   total profits of the economy as a whole.
Question #7
For a steel factory, a decrease in the cost of electricity to the plant will cause the supply curve to:
A.   shift to the left.
B.   become flatter.
C.   become parallel to the price axis.
D.   shift to the right.
Question #8
Suppose the demand for good X is given by Qdx = 10 + axPx + ayPy + aMM. From the law of demand, we know that ax will be
A.   less than zero.
B.   greater than zero.
C.   zero or less than or greater than zero.
D.   zero.
Question #9
The opportunity cost of receiving $10 in the future as opposed to getting that $10 today is
A.   the value of $10 relative to the total income of all persons.
B.   the foregone interest that could be earned if you had the money today.
C.   the taxes paid on any earnings.
D.   the value of $10 relative to the total income of that person.
Question #10
Which of the following is an implicit cost to a firm that produces a good or service?
A.   Foregone interest of using money that could have been kept in bank.
B.   Labor costs.
C.   Costs of renting or buying land for a production site.
D.   Costs of operating production machinery.

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