1. A firm is earning negative economic profit of $5,000. If its total revenue is $7,000 and its implicit costs are $3,000, what must its explicit costs be?

A. $8,000 B. $9,000 C. $10,000 D. $12,000 E. Indeterminate

My Answer: B

2. Which of the following is correct about a monopsonistic factor market?

A. Resources are efficiently allocated. B. There is one seller and many buyers. C. The monopsony has the same quantity transacted as in a perfectly competitive input market. D. The supply curve is upward sloping and below the marginal factor cost curve. E. Purchase of an additional item decreases the price of the item and of the existing items being purchased. My Answer: B

3. A business hires workers to help harvest blueberries. The following table shows the marginal productivity of each worker in a number of bushels of blueberries.