Question

44. Diminishing marginal product of labor implies that the

Group of answer choices

total cost of output is increasing at a decreasing rate.

marginal cost of an extra unit of output is decreasing.

total product of labor is decreasing at an increasing rate.

marginal cost of an extra unit of output is increasing.

total cost is increasing at a decreasing rate.

34. Suppose that to start up his own firm, Bob quits a $50,000/year job, withdraws $40,000 from his bank account (yielding 5% interest per year) and rents space from a real estate firm for $18,000 per year. In addition, if Bob annually spends $200,000 on employees, $2,000 on kringle, $150,000 on manufacturing equipment, $125,000 on raw materials, $10,000 on office supplies and $25,000 on employee benefits, then Bob’s annual implicit costs are _____ and his annual explicit costs are _____.

Group of answer choices

$50,000, $570,000.

$52,000, $512,000.

$52,000, $530,000.

$52,000, $570,000.

$90,000, $512,000.

24. If a firm’s explicit costs are $5,000, its implicit costs are $2,500, and its total revenue is $8,500, then its _____ profit is _____.

Group of answer choices

accounting, $1,000.

economic, $1,000.

economic, $3,500.

accounting, $6,000.

economic, $6,000.

4. Suppose that the demand for cheese hats is relatively inelastic and the supply of cheese hats is relatively elastic. If a $5 excise tax is imposed on the production of cheese hats, then the price consumers pay will

Group of answer choices

increase by more than $5.

increase by less than $2.50.

increase by more than $2.50 but less than $5.

increase by exactly $5.

not change because producers will pay the entire tax.

63. A bundle (X*,Y*) maximizes Ned’s utility if (X*,Y*) exhausts his income and satisfies the condition

Group of answer choices

MU_X = MU_Y.

MU_X/P_X = MU_Y/P_Y

MU_X/P_X = 0 = MU_Y/P_Y.

MU_X⋅P_X = MU_Y⋅P_Y.

MU_X/P_X < MU_Y/P_Y.

Answer 1

Answer-44 Diminishing marginal product of labor implies that the marginal cost of an extra unit of output is decreasing.

Answer- 34 Suppose that to start up his own firm, Bob quits a $50,000/year job, withdraws $40,000 from his bank account (yielding 5% interest per year) and rents space from a real estate firm for $18,000 per year. In addition, if Bob annually spends $200,000 on employees, $2,000 on kringle, $150,000 on manufacturing equipment, $125,000 on raw materials, $10,000 on office supplies and $25,000 on employee benefits, then Bob’s annual implicit costs are $52,000 and his annual explicit costs are $530,000

Answer- 24  If a firm’s explicit costs are $5,000, its implicit costs are $2,500, and its total revenue is $8,500, then its economic profit is $1000.

Economic Profit = Total Revenue- Total cost

= 8500-7500

= 1000

Answer-63 A bundle (X*,Y*) maximizes Ned’s utility if (X*,Y*) exhausts his income and satisfies the conditionMUX/PX = MUY/PY

Utility maximizing principle says that marginal utility per dollar spent on each good must be equal.