If the wage rate is ________ the value of marginal product, a firm can increase its profit by ________.
A) greater than; selling an extra unit of output
B) less than; selling one less unit of output
C) less than; hiring an extra worker
D) less than; hiring one less worker
Ques. 2The manufacturing sector is dominated by
A) corporations.
B) partnerships.
C) proprietorships.
D) government firms.
Ques. 3Total variable cost is the sum of all
A) costs of the firm's fixed factors of production.
B) costs associated with the production of goods.
C) costs that rise as output increases.
D) implicit costs.
Ques. 4A Lorenz curve graphs the
A) percentage of income or wealth against the percentage of households.
B) cumulative percentage of income or wealth against the cumulative percentage of households.
C) cumulative value of income against the cumulative percentage of households.
D) percentage of wealth against the percentage of income.
Ques. 5A school of tuna swimming in the ocean is
A) nonexcludable and rival.
B) excludable and rival.
C) nonexcludable and nonrival.
D) excludable and nonrival.
Ques. 6The figure above shows a perfectly competitive firm. In the short run, the firm will shut down
A) only if the AVC of producing 10 units is less than 20.
B) only if the AVC of producing 10 units is more than 20.
C) only if the AVC curve reaches its minimum before 10 units are produced.
D) always.
Ques. 7Suppose that you consume only pizza, which costs 4 per slice, and Diet Pepsi, which costs 2 each. The table above gives your utility from consuming these two goods.
If your income is 14, which of the following consumption combinations will you choose? A) 3 slices of pizza and 1 Diet Pepsi
B) 2 slices of pizza and 3 Diet Pepsis
C) 1 slice of pizza and 5 Diet Pepsis
D) 0 slices of pizza and 7 Diet Pepsis
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