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

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Question #1
As more firms enter an industry:
A.   economic profits decrease.
B.   None of the statements associated with this question are correct.
C.   prices rise.
D.   accounting profits increase.
Question #2
To maximize profits, a firm should continue to increase production of a good until:
A.   total revenue equals total cost.
B.   profits are zero.
C.   average cost equals average revenue.
D.   marginal revenue equals marginal cost.
Question #3
Which of the following pairs of goods are probably complements?
A.   Televisions and roller skates.
B.   Frozen yogurt and ice cream.
C.   Steak and chicken.
D.   Hamburgers and ketchup.
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.   shortage of 30 units.
B.   surplus of 30 units.
C.   surplus of 12 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 demanded rises.
B.   quantity supplied falls.
C.   quantity demanded falls.
D.   quantity supplied rises.
Question #6
Economic profits are:
A.   total revenue minus total cost.
B.   total revenue minus total opportunity cost.
C.   total profits of the economy as a whole.
D.   marginal revenue minus marginal cost.
Question #7
For a steel factory, a decrease in the cost of electricity to the plant will cause the supply curve to:
A.   become flatter.
B.   shift to the left.
C.   shift to the right.
D.   become parallel to the price axis.
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.   greater than zero.
B.   zero.
C.   less than zero.
D.   zero or less than or greater than zero.
Question #9
The opportunity cost of receiving $10 in the future as opposed to getting that $10 today is
A.   the foregone interest that could be earned if you had the money today.
B.   the value of $10 relative to the total income of all persons.
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.   Costs of operating production machinery.
C.   Costs of renting or buying land for a production site.
D.   Labor costs.

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