Exam 1

Multiple choice questions - Microeconomics  35) What is the firm’s efficient scale?  A. the quantity of output that minimizes average total cost  B. the quantity of output that minimizes average variable cost  C. the quantity of output that minimizes marginal cost  D. the quantity of output that minimizes average fixed cost   34) Marginal cost increases as the quantity of output increases. What property does this reflect?  A. diminishing total cost  B. increasing marginal product  C. increasing total cost  D. diminishing marginal product

One of the students states that this actually is beneficial to the firm because less output means more profit. Is that student correct? The key to solving the puzzle is the marginal principle.

provide an economic explanation for the provided text below  While on vacation, you go to a miniature golf course on a weekday and notice no other customers there while you golf. Why do you think a miniature golf course would stay open during the week when it seems like the revenue from so few customers could not possibly cover the costs of running the golf course?  What is an example of another business that stays open even when it's slow, and their revenue does not seem like it could cover their costs?   make sure to use concepts from either of the following topics (minimum of two from the list provided rest may be from own knowledge): externalities, public goods and common resources, understanding costs, business behaviour and businesses in competitive markets.

The table below shows how the number of university classrooms cleaned in an evening varies with the number of janitors:   Janitors per evening 0 1 2 3 4 5 6 7 Classrooms cleaned per evening 0 3 7 12 16 17 17 16   a.What is the marginal product of the second janitor?       b.What is the average product of four janitors?       c.Is the addition of the third janitor associated with increasing, diminishing, or negative marginal returns? Explain.         d.Is the addition of the fourth janitor associated with increasing, diminishing, or negative marginal returns? Explain.         e.Is the addition of the seventh janitor associated with increasing, diminishing, or negative marginal returns? Explain.

briefly Define the Law of Diminishing Marginal Returns and giving a clear example, explain why this“Law” is important in Economics.

Refer to the table below. How will the marginal cost curve look like if you draw it? Units of Output Total Cost 10 20 20 40 30 60 40 80 50 100 60 120 Select one: a. upward sloping b. downward sloping c. horizontal d. vertical

The table below shows how the number of university classrooms cleaned in an evening varies with the number of janitors:   Janitors per evening 0 1 2 3 4 5 6 7 Classrooms cleaned per evening 0 3 7 12 16 17 17 16 d.Is the addition of the fourth janitor associated with increasing, diminishing, or negative marginal returns? Explain.         e.Is the addition of the seventh janitor associated with increasing, diminishing, or negative marginal returns? Explain.

Define the Law of Diminishing Marginal Returns and giving a clear example, explain why this“Law” is important in Economics.

How do you calculate whether your business has an economic profit using marginal approach to profit maximization? and what does an economic profit means?

Explain what it means in terms of opportunity cost when Economic profits are zero?

Is it possible to avoid Diminishing Marginal Return? Why? Explain

Explain why it would cost Rafael Nadal or Venus Williams more to leave the professional tennis tour and open a tennis shop than it would for the coach of a university tennis team to do so.  Be sure to use the concepts of implicit cost, opportunity cost, and economic cost in your explanation.

What two lines on a cost curve diagram intersect at the zero-profit point?