2. Which of the following is least likely to be considered “economic capital” (K

Question

2. Which of the following is least likely to be considered “economic capital” (K in most of our examples)?
    A. a blast furnace at a steel mill                              C. a tractor on a farm.
    B. a computer at Purdue Calumet.                          D. a ten dollar bill.

6. Decreasing returns to scale may occur as increasing the amount of inputs used:
     A. increases specialization.                        C. always increases the amount of output produced.

     B. may cause coordination difficulties.      D. increases efficiency.

14. A small business owner earns $60,000 in revenue annually. The explicit annual costs equal $40,000. The
      owner could work for someone else and earn $25,000 annually. The owner's accounting profit is ________
      and owner's economic profit is ________.
      A. $20,000, $5,000           B. $20,000, -$5,000    C. $25,000, -$5,000    D. $45,000, -$5,000

21. Assume government policy increases the demand for corn. We can say with certainty that:
      A. The consumer surplus of corn buyers will increase.
      B. The producer surplus of corn growers will decrease.
      C. The producer surplus of corn growers will increase.
      D. The producer surplus of corn growers will not change.

26. If a local monopoly ice cream shop can sell 9 ice cream cones at $2.00 each, but must reduce the price to
     $1.90 to sell 10 ice cream cones, the marginal revenue of the 10th cone is:
     A. $1.95.                            B. $1.90.                     C. $1.00.                     D. - $0.10.

28. A profit maximizing monopolist:
      A. is guaranteed to lose money because of a lack of competition.
      B. is not guaranteed to make a positive profit.
      C. is guaranteed to make a positive profit, hence the desire to be a monopolist.
      D. is guaranteed to make a non-negative profit, otherwise government would step in to assist.

29. In general, the quantity that maximizes revenue for the monopolist:
      A. is greater than the quantity that maximizes profit.
      B. is less than the quantity that maximizes profit.
      C. is the same as the quantity that maximizes profit.
      D. is illegal according to anti-trust statutes.

Explanation / Answer

26. MR is the revenue that is earned by selling one more unit of the good.

By selling 10th unit, the firm earned $1.90. So MR=$1.90.

P.S. Please ask the other questions as different questions.

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.