When economists speak of marginal they mean

Assignment Help Business Economics

Reference no: EM13838679

1. When economists speak of "marginal," they mean

a. Opportunity.

b. Scarcity.

c. Incremental.

d. Unimportant.

2. Managers undertake an investment only if

a. Marginal benefits of the investment are greater than zero.

b. Marginal costs of the investment are greater than marginal benefits of the investment.

c. Marginal benefits are greater than marginal costs.

d. Investment decisions do not depend on marginal analysis.

3. A firm produces 500 units per week. It hires 20 full-time workers (40 hours/week) at an hourly wage of $15. Raw materials are ordered weekly, and they cost $10 for every unit produced. The weekly cost of the rent payment for the factory is $2,250. How do the overall costs break down?

a. Total variable cost is $17,000; total fixed cost is $2,250; total cost is $19,250.

b. Total variable cost is $12,000; total fixed cost is $7,250; total cost is $19,250.

c. Total variable cost is $5,000; total fixed cost is $14,250; total cost is $19,250.

d. Total variable cost is $5,000; total fixed cost is $2,250; total cost is $7,250.

4. Total costs increase from $1,500 to $1,800 when a firm increases output from 40 to 50 units. Which of the following is true if marginal cost is constant?

a. FC = $100

b. FC = $200

c. FC = $300

d. FC = $400

5. A manager of a clothing firm is deciding whether to add another factory in addition to one already in production. The manager would compare

a. The total benefits gained from the two factories to the total costs of running the two factories.

b. The incremental benefit expected from the second factory to the total costs of running the two factories.

c. The incremental benefit expected from the second factory to the cost of the second factory.

d. The total benefits gained from the two factories to the incremental costs of running the two factories.

6. A firm is thinking of hiring an additional worker to their organization who they believe can increase total productivity by 100 units a week. The cost of hiring him or her is $1,500 per week. If the price of each unit is $12,

a. The MR of hiring the worker is $1,500.

b. The MC of hiring the worker is $1,200.

c. The firm should not hire the worker since MB < MC.

d. All the above

7. A retailer has to pay $9 per hour to hire 13 workers. If the retailer only needs to hire 12 workers, a wage rate of $7 per hour is sufficient.

What is the marginal cost of the 13th worker?

a. $117

b. $9

c. $33

d. $84

8. If a firm's average cost is rising, then

a. Marginal cost is less than average cost.

b. Marginal cost is rising.

c. Marginal cost is greater than average cost.

d. The firm is making an economic profit.

9. After the first week of his MBA Managerial Economics class, one of your pharmaceutical sales representatives accuses you of committing the sunk-cost fallacy by refusing to allow him to reduce price to make what he considers to be a really tough sale. Which of the following suggests the sales representative may be right?

a. Most of the costs of drug development are sunk, not fixed.

b. Sales representatives are paid a sales commission on revenue, so they don't care about the costs of drug development.

c. Sales representatives don't worry that a low price today may make it more difficult for the company's other sales representatives to charge higher prices to their customers, tomorrow.

d. Sales representatives think only about one thing, sales.

10. A company is producing 15,000 units. At this output level, marginal revenue is $22, and the marginal cost is $18. The firm sells each unit for $48 and average total cost is $40.

What can we conclude from this information?

a. The company is making a loss.

b. The company needs to cut production.

c. The company needs to increase production.

d. Not enough information is provided.

Reference no: EM13838679

Questions Cloud

Decides to charge cola consumers tax : Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 25,000 cases of cola were sold every week at a price of $7 per case. After the tax, 18,000 cases of cola are sold every week; consumers pay $8 per case (includin..

Twenty-eight percent of all liquid crystal displays : Twenty-eight percent of all liquid crystal displays (LCDs) are manufactured by Samsung. What is the probability that in a collection of three independent LCD purchases, at least one is a Samsung?

Computer programmer with utility function equal : Sergei is a computer programmer with a utility function equal to U=Y+120L-L . He contracts with Uber that allows him to set his own work hours; they pay him $50/hour. He has allocated himself a work-hour time budget of a maximum of 250 hours per mont..

What is probability that at least one of them is operational : The probability a HP network server is down is .048. If you have three independent servers, what is the probability that at least one of them is operational?

When economists speak of marginal they mean : When economists speak of "marginal," they mean. Managers undertake an investment only if. Total costs increase from $1,500 to $1,800 when a firm increases output from 40 to 50 units. Which of the following is true if marginal cost is constant?

What is the systems-development life cycle : What is the systems-development life cycle? Why is it important to the selection of an information system?The SDLC (system development life cycle) involves several phases.The implementation phase can be the most challenging and it is the phase that..

Pre-intervention optimized supply and demand equilibrium : Draw the pre-intervention optimized supply and demand equilibrium. Explain and show what effect it has on the polis.

What are some other potential sources of economic growth : Look at the differences in per capita GDP growth of the following countries in 2006: What factors, such as international trades, might explain such differences in per capital GDP growth rates? What are some other potential sources of economic growth?

Considering the installation of high-tech handling system : A large automobile manufacturing company is considering the installation of a high-tech handling system. Show your cash flow diagram from the company’s perspective. Should the system be recommended for investment? Show all your work and detail your r..

User Account

All Pages