1 - Kingston Company is considering installing robotic equipment in its factory. What is an irrelevant factor in this decision?

A) The capital-to-labor ratio

B) Economies of scale

C) The factorys original cost

D) Opportunity cost

2 - In competitive markets, what generally is the short-term result of a government price ceiling set below the equilibrium market price?

A) Decreased demand

B) No effect

C) Shortage

D) Surplus

3- Which of the following examples illustrates the principle of diminishing returns?

A) Bills Mowing takes 30 minutes to mow and trim a 5,000 square foot lawn and 45 minutes to mow and trim a 10,000 square foot lawn.

B) In the Maher Inns kitchen, three cooks can prepare 150 meals in one evening; four cooks can prepare 180 meals.

C) A single copy of a 5,000-copy printing of a 120-page paperback and a single copy of a 10-copy printing a 30-page presentation have the same unit cost.

D)A small furnace is less efficient than a large one.

4 - Over the past three years, widget manufacturing companies have established Internet sites for routine customer inquires about orders. Consequently, each customer service representative now handles five times as many customers. The costs of site maintenance are substantially less than one representatives wages. What is the most likely result of this change?

A) Lower wages for representatives

B) A widget supply curve shift to the left and increased widget prices

C) A widget supply curve shift to the left and decreased widget prices

D) A widget supply curve shift to the right and decreased widget prices