The total fixed cost of producing 600 blots equals

Answer: E pg46

When organization can produce several different products together at lower cost than could a group of single product firms operating independently, then the organization has economies of scale.

Answer: False

According to the table, if Tampa and Boston were to trade white beans and baked beans, what is the range of possible prices (i.e., prices acceptable to both locations) for a can of white beans?

Answer: A

The accountants hired by the Ohman Shoe Company have calculated fixed costs to equal $30,000, variable cost to equal $100,000, and total revenue to equal $110,000. Because of this information, Ohman Shoe Company decides

Answer: Mostly C or D

According to the table, what is Ohman’s T-Shirt Factory’s profit at the profit maximizing point?

Answer D …….solved

If a company’s average total cost remains constant as output increases, then the company has constant returns to scope.

Answer: False

According to the graph, as the economy moves from producing 100 chainsaws to 90 chainsaws, to 80 chainsaws, to 70 chainsaws, etc., the production of chainsaws is decreasing by 10 chainsaws. What happens to the opportunity cost of producing additional units of plywood as the economy moves north-west on the production possibilities frontier?

Answer: C………………….Increases Page 5

According to the table, what is the opportunity cost of producing one can of baked beans in Boston?

Answer: D

The shut down rule states that a business should shut down if production at the profit maximizing quantity generates total revenues that are less than total variable costs.

Answer: True

Suppose the income elasticity of demand for subway rides is +0.1 for Johnny. This number tells us that Johnny consider subway rides an inferior good.

Answer: False

A sunk cost is a cost that has already been committed and cannot be recovered.

Answer: True

According to the figure if the local government imposes a price ceiling of 1.40 per gallon of gasoline in Tampa, then the actual gallon of gasoline sold in Tampa equals:

Answer: A Page 41

According to the table, if the market price were set at $24, the there would be

Answer: B

Suppose that in year 1, Jane’s quantity demanded of bus ride is 17 per week, when the price of each bus ride is $1.50 and her income is $20,000. In year 2, Jane’s quantity demanded of bus rides decreases to 10 per week, when the price of each bus ride is $1.50 and her income is $30,000. Using the midpoint method, what is Jane’s income elasticity of demand for bus ride between year 1 and year 2?

Answer: A

Consider the steak market, where the demand for steak is downward sloping and the supply of steak is upward sloping. A per unit tax on the buyer of steak would cause the market price to increase and the quantity demanded to decrease.

Answer: True

Suppose the price of pork, an input in the production of hot dogs, increases. Which of the following accurately describes how the hotdog market is affected?

Answer: C

In 2003, the market price for a 3,000 square foot home in South Tampa, Florida was $350,000 and 358 new homes were built. In 2004, the market price for a 3,00o square foot home in South Tampa. Florida increased to $385,000 and, holding all equal, 534 new homes were built. Using the midpoint method, what is the elasticity of the supply for new homes in South Tampa.

Answer: B

The marginal cost of each unit between units 500 and 600 equals.

Answer: B

According to the table, which firm has economies of scale and then diseconomies of scale as output increase from 1 to 6?

Answer: A

According to the figure, what share of the per unit tax on bags of coffee beans is paid by the buyers and what share is paid by the sellers?

Answer: B

To have a comparative advantage in something means that you have the lowest opportunity cost relative to those with whom you are compared.

Answer: True

According to the figure, because of the imposition of this per-bag tax, the price buyers now pay and the price sellers get to keep (net) equals

Answer: C

Consider the market of mustard, which is a complement to hot dogs. Suppose the price of pork, an input in the production of hot dogs decreases. Which of the following accurately describes how the mustard market is affected?

Answer: B

According to the figure, if the Association of University Management Professors imposes a price floor of $45 per hour, then the actual number of management professors hired equals:

Answer: B