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Question 1(1 point)

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Robert is an entrepreneur who invests in residential real estate. He has a money market account with $100,000 that earns 3% APY. Robert wants to buy a house that will give him a monthly cash inflow of $300. What will opportunity cost of investing in the house be?

Question 1 options:

3000

3100

3600

103,000

Question 2(1 point)

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Suppose Mr. B withdrew $50,000 from his account that earned 10% to invest into this business. He quit his full-time job that paid $40,000 to manage this business. Mr. B's economic profit equals:

Question 2 options:

100,000

45,000

0

-45,000

Question 3(1 point)

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Opportunity Cost would factor into which?

Question 3 options:

Economic costs

Accounting costs

Question 4(1 point)

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Economic costs are smaller than accounting costs

Question 4 options:

True

False

Question 5(1 point)

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Economic profit is usually smaller than accounting profit

Question 5 options:

True

False

Question 6(1 point)

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Which market structure has many firms with a slightly differentiated product?

Question 6 options:

perfect competition

monopolist competition

oligopoly

monopoly

Question 7(1 point)

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You are the owner and only employee of a company. Last year, you sold 10,000 boxes of stuff for $15 each. In order to start your business you had to take $100,000 out of your money market account that was earning 6% interest and invest it in your business. You also had to quit your job that was giving you a salary of $40,000. In operating your business you had to buy $50,000 worth of materials, etc. Your total economic costs were:

Question 7 options:

190,000

196,000

96,000

150,000

Question 8(1 point)

You are the owner and only employee of a company. Last year, you sold 10,000 boxes of stuff for $15 each. In order to start your business you had to take $100,000 out of your money market account that was earning 6% interest and invest it in your business. You also had to quit your job that was giving you a salary of $40,000. In operating your business you had to buy $50,000 worth of materials, etc. Your total accounting profit was:

Question 8 options:

-40,000

100,000

150,000

54,000

Question 9(1 point)

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Rank the following market structures frommostcompetitive (1) to least competitive (4).

Question 9 options:

1

2

3

4

Perfect competition

1

2

3

4

Monopoly

1

2

3

4

Oligopoly

1

2

3

4

Monopolistic Competition

Question 10(1 point)

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Which of the following statements is NOT true about firms in perfectly competitive markets?

Question 10 options:

they sell a homogeneous product

there are no barriers to entry/exit

they have no control over price

they earn small but positive profits in the long run

Productivity Video

Question 11(1 point)

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Diminishing returns set in after the ___ worker is hired.

Question 11 options:

1

2

3

5

Question 12(1 point)

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The marginal product of the third worker is ____.

Question 12 options:

42

32

12

10

Question 13(1 point)

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If the firm hires seven workers, then...

Question 13 options:

mp is negative

mp is rising

mp is 8.6

mp is 3

Question 14(1 point)

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If the price of a product is $10, then what wage would justify hiring 4 workers, based on the above diagram?

Question 14 options:

10

50

80

40

Question 15(1 point)

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If wages are currently $70 and the price of the product is $10, then how many workers should you hire, based on the diagram?

Question 15 options:

3

2

5

4

Question 16(1 point)

The marginal product of the 2nd worker is explained by which of the following phenomenon?

Question 16 options:

law of diminishing returns

economies of scale

returns from specialization

diseconomies of scale

Question 17(1 point)

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The marginal product of the 6th worker is

Question 17 options:

50

55

0.2

-5

Costs Video

Question 18(1 point)

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If Mayo Lawyer Firm's total costs are $7000 when 20 client's cases are worked and $7600 when 21 client's cases are worked, the marginal cost of the 21st client's case is:

Question 18 options:

300

400

500

600

Question 19(1 point)

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The fixed costs of 6 ovens are...

Question 19 options:

650

400

41.7

250

Question 20(1 point)

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The marginal cost of the third oven is

Question 20 options:

100

150

50

167

Question 21(1 point)

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As output increases, average fixed costs:

Question 21 options:

decrease

decrease then increase

remain constant

increase

Question 22(1 point)

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Three workers can produce ____ pizza per day at a total cost of ____.

Workers per day

Pizza per day

Fixed cost

$/day

Variable cost

$/day

0

0

400

0

1

25

400

200

2

75

400

350

3

115

400

450

4

145

400

600

5

170

400

800

Question 22 options:

115; $450

115; $50

115; $850

115; $950

Question 23(1 point)

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The average total cost of 75 pizza is...

Workers per day

Pizza per day

Fixed cost

$/day

Variable cost

$/day

0

0

400

0

1

25

400

200

2

75

400

350

3

115

400

450

4

145

400

600

5

170

400

800

Question 23 options:

750

10

4.7

150

Question 24(1 point)

Saved

When the fifth worker is employed, the marginal cost is:

Workers per day

Pizza per day

Fixed cost

$/day

Variable cost

$/day

0

0

400

0

1

25

400

200

2

75

400

350

3

115

400

450

4

145

400

600

5

170

400

800

Question 24 options:

200

8

40

4

Question 25(1 point)

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Marginal cost equals average total cost:

Question 25 options:

when average total cost is at its minimum point

when marginal cost is at its minimum

when average variable cost is at its minimum

when there are no fixed costs

Question 26(1 point)

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Suppose marginal cost is $5. Average variable costs are $10. For the next unit of output produced, average variable costs will be:

Question 26 options:

more than $10

less than 10

equal to 10

Question 27(1 point)

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Which is the formula for average variable cost?

Question 27 options:

Total cost / quantity

Change in total cost / change in quantity

fixed cost + variable cost

variable cost / quantity

Question 28(1 point)

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As quantity increases, a firm's average fixed costs will always....

Question 28 options:

increase

decrease

increase then decrease

decrease then increase

Question 29(1 point)

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ATC, AVC, and MC are typically

Question 29 options:

u-shaped

downward sloping

upward sloping

n shaped

Question 30(1 point)

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What is the fixed cost of the second unit of output?

Question 30 options:

100

50

150

Question 31(1 point)

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What is the total cost of the 5th unit?

Question 31 options:

100

150

200

50

Crash Course Video on Labor Markets

Question 32(1 point)

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In labor market, firms represent the demand and households represent the supply.

Question 32 options:

True

False

Question 33(1 point)

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The fact that an employee's wages are determined by the value of the firm's product is known as...

Question 33 options:

efficiency wages

monopsony power

voluntary exchange

derived demand (for labor)

Question 34(1 point)

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The NCAA is an example of which market failure?

Question 34 options:

derived demand (for labor)

monopoly

wage discrimination

monopsony

Question 35(1 point)

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When an employer voluntarily offer higher than competitive wages in order to encourage productivity is an example of...

Question 35 options:

monopsony power

derived demand (for labor)

wage discrimination

efficiency wages

Question 36(1 point)

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Today approximately 1 in 3 American Workers is in a Labor Union.

Question 36 options:

True

False

Question 37(1 point)

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Minimum wage affects (directly) typically less than 3% of workers in the U.S.

Question 37 options:

True

False

Question 38(1 point)

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Question 38 options:

According to the Brookings institute study (from the video), the ripple effect of minimum wage could affect nearly

percent of the workforce.

Question 39(1 point)

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Some economists argue that minimum wage laws are correcting which market failure?

Question 39 options:

monopsonies

monopolies

asymmetric information

externalities

Question 40(1 point)

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Which combination is essential to high wages?

Question 40 options:

low supply; high demand

low supply; low demand

high supply; low demand

high supply; high demand