BE 301 KU Exam 1 Multiple Choice || Already Graded A+.
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BE 301 KU
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BE 301 KU
An individuals value for a good or service is the correct answers Amount of money he or she is willing to pay
The biggest advantage of capitalism (free market system) is that correct answers It creates wealth by letting a person follow his or her own self-interest
Wealth-creating transactions...
BE 301 KU Exam 1 Multiple Choice || Already Graded A+.
An individuals value for a good or service is the correct answers Amount of money he or she is
willing to pay
The biggest advantage of capitalism (free market system) is that correct answers It creates wealth
by letting a person follow his or her own self-interest
Wealth-creating transactions are more likely to occur correct answers With private property
rights
With strong contract enforcement
With black markets
d. a and b
Government Regulation correct answers Provides incentives to conduct business in an illegal
black market
An example of a price floor is correct answers minimum wages
Taxes: correct answers Impede the movement of assets to higher-valued uses.
Reduce incentives to work
Decreases the number of wealth creating transactions
d.All of the above (answer)
A consumer values a car at $30,000 and it costs a producer $20,000 to make the same car. If the
transaction is completed at $24,000, the transaction will generate correct answers $6,000 worth
of buyer surplus and $4,000 worth of seller surplus
A consumer values a car at $525,000 and a producer values the same care at $485,000. If sales
tax is 8% and is levied on the seller, then the sellers bottom line price is correct answers
$523,800
Efficiency implies opportunity, correct answers Never
A business owner makes 1,000 items a day. Each day he or she contributes eight hours to
produce those items. If hired, elsewhere he or she could have earned $250 an hour. The item sells
for $15 each. Production does not stop during weekends. If the explicit costs total $150,000 for
30 days, the firm's accounting profit for the month equals: correct answers $300,000
A business owner makes 1,000 items a day. Each day he or she contributes eight hours to
produce those items. If hired, elsewhere he or she could have earned $250 an hour. The item sells
for $15 each. Production does not stop during weekends. If the explicit costs total $150,000 for
30 days, the economic profit for the month equals: correct answers $240,000
Opportunity costs arise due to correct answers resource scarcity
, After graduating from college, Jim had three choices, listed in order of preference: (1) move to
Florida from Philadelphia, (2) work in a car dealership in Philadelphia, or (3) play soccer for a
minor league in Philadelphia. His opportunity cost of moving to Florida includes correct answers
the income he could have earned at the car dealership
Economic Value Added helps firms to avoid the hidden-cost fallacy correct answers by taking all
capital costs into account including the cost of equity
The fixed-cost fallacy occurs when correct answers a. a firm considers irrelevant costs.
b. a firm ignores relevant costs.
c. a firm considers overhead or depreciation costs to make short-run decisions.
d. Both a and c (ANSWER)
Mr. D's Barbecue of Pickwick, TN produces 10,000 dry-rubbed rib slabs per year. Annually Mr.
D's fixed costs are $50,000. The average variable cost per slab is a constant $2. The average total
cost per slab then is correct answers $7
All the following are examples of variable costs, except correct answers accounting fees
The U.S. government bought 112,000 acres of land in southeastern Colorado in 1968 for
$17,500,000. The cost of using this land to- day exclusively for the reintroduction of the black-
tailed prairie dog correct answers is equal to the market value of the land
When economists speak of "marginal," they mean correct answers incremental
Managers undertake an investment only if correct answers marginal benefits are greater than
marginal costs
A firm produces 500 units per week. It hires 20 full-time workers (40 hours/week) at an hourly
wage of $15. Raw materials are ordered weekly, and they cost $10 for every unit produced. The
weekly cost of the rent payment for the factory is $2,250. How do the overall costs break down?
correct answers Total variable cost is $17,000; total fixed cost is $2,250; total cost is $19,250
Total costs increase from $1,500 to $1,800 when a firm increases output from 40 to 50 units.
Which of the following is true if marginal cost is constant? correct answers FC = $300
A manager of a clothing firm is deciding whether to add another factory in addition to one
already in production. The manager would compare correct answers the incremental benefit
expected from the second factory to the cost of the second factory
A firm is thinking of hiring an additional worker to their organization who they believe can
increase total productivity by 100 units a week. The cost of hiring him or her is $1,500 per week.
If the price of each unit is $12 correct answers the firm should not hire the worker since MB <
MC
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