MicroEcon mods 8-14 (quizzes)

If the price of a good or service increases, then

A consumer surplus will decrease

B consumer surplus will increase

C producer surplus will increase

D a and c only’

(t/f) in order to calculate consumer surplus in the market and producer surplus use the formula for area of a triangle

True

True or false producer surplus is in the area located under the demand curve

False

If a consumers willing to pay $15 for a new vinyl record and the price is $13 then the Individual Consumer surplus=2 (t/f)

True

If the price of a g/s dec, then

A consumer surplus will decrease

B consumer surplus will increase’

C producer surplus will increase

D none of the above

True or false consumer surplus is in the area located above the supply curve

False

True or false willingness to pay for a good or service refers to the minimum price that a consumer will be willing to buy a good or service

False

True or false total consumer surplus in the market is found by adding all of the individual consumer surpluses in the market of all buyers of a good or service

True

True or false deadweight loss refers to resources used by local state and federal government to collect the tax

False

Some cost associated with taxes include

A admin cost

B preventing mutually beneficial transactions from happening

C leads to dead weight loss

D all of the above’

E a and c only

True or false taxes decrease the quantity of goods and services bought and sold

True

True or false a benefit associated with taxes is admin costs

False

True or false although a market is efficient it may not necessarily be fair

True

Low PED and high PES leave the tax burden to fall on:

A producers

B consumers’

C a and b

D none of the above

True or false taxes lead to higher prices and lower quantities

True

True or false markets work so well due to well-defined property rights and economic signals

True

True or false there are no exceptions to the principle of diminishing marginal utility

False

The formula for marginal utility is (🔺TU/🔺Q) (T/F)

True

True or false everything on or below the budget line is considered unaffordable to the consumer

False

True or false a concert ticket would be an example of a good that you must experience to enjoy

True

True or false utility is measured in units called utils

True

True or false the principle of diminishing marginal utility refers to the change in total utility that is generated by consuming an additional unit of a good or service

False

True or false a budget line refers to a limited amount of income available to consumers to spend on good or services

False

True or false the main goal of consumers is to maximize their utility subject to their budget constraint

False

suppose the owner of High Mountain ski Rentals purchased $150,000 worth of ski s for rentals, the Total Revenue from therentals is 300,000. Utilitiesare 20000/ yr & wages 50000. There is an outstanding loan an the interest Owing/yr is 12000. If the skies had not been purchased , the owner could have earned 11,500 in annual interest income on the 150,000 otherwise used to buy the Skis. the owner was offered another Manager position at another Ski shop for $ 40,000/yr. Using the info given, calculate accounting profit.

A: acct profit: 232,000

b: acct profit: 16,500

c: acct profit: 68,000

D: acct profit: 283,500

c: acct profit 68,000

The formula for marginal Revenue Is change in TC / Change in Qty (T/F)

False:

(T/F) all cost are opportunity costs.

True

(T/F) An example of an Implicit cost associated w/ attending college would be forgone salary that could have been earned working FT Job Instead.

True

(T/ F) Accounting profit is often less than economic profit for a firm.

False: ECON is usually less

(T/F) An example of an Implicit cost associated w/ a business would be the cost of machinery.

False: Fixed cost

(T/F) Economic profit = Total Revenue - opportunity cost

True

(T/F) Profit= TC - TR

False: profit= selling price - cost price

(T/F) An example of a variable input on a college campus would be the # of instructors.

True

which of the following would be considered as an example of a fixed input at a factory?

A: the size of the parking lot

B: the # of employees

C: the size of the bathroom

D: A & C

E: None of the above

D: A & C

In the short run all of the firms inputs can change (T/F)

False

(T/F) AN EXAMPLE OF A VARIABLE INPUT AT MCDONALD'S WOULD BE THE NUMBER OF DRIVE-THRU WINDOWS

F

Diminishing returns only holds if the Qty of all other inputs are fixed (T/F)

True

(T/F) An ex of a fixed input at papa John's would be the # of pizza ovens.

True

The Formula for marginal product of an input = Change in L / change in Qty (T/F)

False

(T/F) An ex. of a fixed input on a college campus would be the # of classrooms.

True

(T/F) Aug total cost is important because it tells the producer how much the aug unit of output costs to produce.

True

(T/F) Marginal costs tell the producer how much the last Unit of output costs to produce.

True

(T/F) The marginal cost curve rises due to diminishing returns to inputs when a variable input is increasing as Qties of other inputs remain fixed.

True

(T/F) When the U shaped atcc slopes down, the DRE dominates.

False

(T/F) Avg FC inc as more output is produced.

False

(T/F) An ex. of a variable cost would be rent/month on abuilding used by a sm. business.

False

(T/F) The U shaped atcc inc at low Ivs of output, then falls at higher lvs of output.

False

which of the Following is used to calculate Marginal cost?

A: TC /Q

B: Change in TC / Change in Qty

c: VC/Q

D: FC/Q

E: None of the above

B: change in TC/ Change in Q

(T/F) The LR atc curve shows the relationship btwn output & atc when variable cost has been chosen to minimize total cost for each lv. of output.

False

(T/F) The Goal of the firm is to exp diseconomies of scale.

False

(T/F) In the SR, all inputs can vary.

False

(T/F) In the LR, a firm's fc becomes variable.

True

(T/F) At high Lv.s of output, high FC= lower atc.

True

(T/F) There is a trade-off btun a higher FC & a lower VC for any Lv. of output.

True

Which of the following describes Increasing returns to scale?

A: when LR atc is constant as output inc

B: when LR atc dec as op inc

C: when LR atc inc as opc

D: None of the above

B:LR dec & op inc

(T/F) At low lvs of op, Low FC= lower atc.

True