Economics 528 Midterm || WITH PASSED SOLUTIONS!!
Managerial economics correct answers helps managers make decisions in the face of scarcity
Economic costs of production differ from accounting costs in that correct answers economic
costs add the opportunity costs of a firm using its own resources while accounting costs do
not.
How many pounds of apples should Margie sell to maximize her profit? Refer to table 12-2
correct answers This cannot be determined without knowing Margie's total or marginal
production costs.
Figure 12-9 shows cost and demand curves facing a profit-maximizing, perfectly competitive
firm. Identify the short run shut down point for the firm correct answers b.c
Sally quit her job as an auto mechanic earning $50,000 per year to start her own business. To
save money she operates her business out of a small building she owns which, until she
started her own business, she had rented out for $10,000 per year. She also invested her
$20,000 savings (which earned a market interest rate of 5% per year) in her business. You are
given the following information about the first year of her operations:
Total revenue: $120,000
Cost of labor: $40,000
Cost of materials: $15,000
Equipment rental: $5,000
Foregone Salary: $50,000
Foregone Interest: $1,000
Opportunity cost of Building: 10,000
How much economic and accounting profit did Sally make her first year? correct answers In
the first year, economic profit is -$1,000 and accounting profit is $60,000.
A firm that can effectively price discriminate will charge a higher price to correct answers
consumers who have the more inelastic demand for the product.
Selling tickets in the orchestra region of the Metropolitan Opera for $55 and selling tickets in
the upper balcony for $28 to listen to Luciano Pavoratti describes which type of price
discrimination? correct answers Third-degree price discrimination
If a firm charges customers $200 per unit of the first unit purchased, and $160 per unit for
each additional unit purchased in excess of one unit. Then, what is the economic term of this
strategy? correct answers Second-degree price discrimination
If the Apple iPhone and the Samsung Galaxy are considered substitutes, then, other things
equal, an increase in the price of the iPhone will correct answers increase the demand for the
Galaxy
If the price of automobiles was to increase, then correct answers the demand for gasoline
would decrease
Managerial economics correct answers helps managers make decisions in the face of scarcity
Economic costs of production differ from accounting costs in that correct answers economic
costs add the opportunity costs of a firm using its own resources while accounting costs do
not.
How many pounds of apples should Margie sell to maximize her profit? Refer to table 12-2
correct answers This cannot be determined without knowing Margie's total or marginal
production costs.
Figure 12-9 shows cost and demand curves facing a profit-maximizing, perfectly competitive
firm. Identify the short run shut down point for the firm correct answers b.c
Sally quit her job as an auto mechanic earning $50,000 per year to start her own business. To
save money she operates her business out of a small building she owns which, until she
started her own business, she had rented out for $10,000 per year. She also invested her
$20,000 savings (which earned a market interest rate of 5% per year) in her business. You are
given the following information about the first year of her operations:
Total revenue: $120,000
Cost of labor: $40,000
Cost of materials: $15,000
Equipment rental: $5,000
Foregone Salary: $50,000
Foregone Interest: $1,000
Opportunity cost of Building: 10,000
How much economic and accounting profit did Sally make her first year? correct answers In
the first year, economic profit is -$1,000 and accounting profit is $60,000.
A firm that can effectively price discriminate will charge a higher price to correct answers
consumers who have the more inelastic demand for the product.
Selling tickets in the orchestra region of the Metropolitan Opera for $55 and selling tickets in
the upper balcony for $28 to listen to Luciano Pavoratti describes which type of price
discrimination? correct answers Third-degree price discrimination
If a firm charges customers $200 per unit of the first unit purchased, and $160 per unit for
each additional unit purchased in excess of one unit. Then, what is the economic term of this
strategy? correct answers Second-degree price discrimination
If the Apple iPhone and the Samsung Galaxy are considered substitutes, then, other things
equal, an increase in the price of the iPhone will correct answers increase the demand for the
Galaxy
If the price of automobiles was to increase, then correct answers the demand for gasoline
would decrease
