12 terms

# Micro Economics Final Exam

Framingham State
###### PLAY
XYZ corporation produced 300 units of output but sold only 275 of the units it produced. The average cost of production for each unit of output produced was \$95. Each of the 275 units sold was sold for a price of \$100. Total cost for the XYZ corporation would be
\$28,500
Suppose a firm in a competitive market received \$1,000 in total revenue and had a marginal revenue of \$10 for the last unit produced and sold. What is the average revenue per unit, and how many units were sold?
\$10 and 100
Each of the following would be considered a common resource except
http://i.imgur.com/vGLhiyF.png
Which of the above marginal cost curves reflects the existence of diminishing marginal product?
A
Tony is a wheat farmer, but he also spends part of his day teaching guitar lessons. Due to the popularity of his local country western band, Farmer Tony has more students requesting lessons than he has time for if he is to also maintain his farming business. Farmer Tony charges \$25 an hour for his guitar lessons. One spring day, he spends 10 hours in his fields planting \$130 worth of seeds on his farm. He expects that the seeds he planted will yield \$300 worth of wheat.
Refer to Scenario 13-3. What is the total opportunity cost of the day that Farmer Tony incurred for his spring day in the field planting wheat?
\$250
Scenario 13-3Tony is a wheat farmer, but he also spends part of his day teaching guitar lessons. Due to the popularity of his local country western band, Farmer Tony has more students requesting lessons than he has time for if he is to also maintain his farming business. Farmer Tony charges \$25 an hour for his guitar lessons. One spring day, he spends 10 hours in his fields planting \$130 worth of seeds on his farm. He expects that the seeds he planted will yield \$300 worth of wheat.
Refer to Scenario 13-3. Tony's accountant would most likely figure the total cost of his wheat planting to equal
\$380
Scenario 13-3Tony is a wheat farmer, but he also spends part of his day teaching guitar lessons. Due to the popularity of his local country western band, Farmer Tony has more students requesting lessons than he has time for if he is to also maintain his farming business. Farmer Tony charges \$25 an hour for his guitar lessons. One spring day, he spends 10 hours in his fields planting \$130 worth of seeds on his farm. He expects that the seeds he planted will yield \$300 worth of wheat.
Refer to Scenario 13-3. Tony's economic profit equals
\$-80
Table 16-3: The information in the table below shows the total demand for premium-channel digital cable TV subscriptions in a small urban market. Assume that each digital cable TV operator pays a fixed cost of \$100,000 (per year) to provide premium digital channels in the market area and that the marginal cost of providing the premium channel service to a household is zero.
Quantity | Price (per year)
0 | \$120
3,000 | \$100
6,000 | \$ 80
9,000 | \$ 60
12,000 | \$ 40
15,000 | \$ 20
18,000 | \$ 0

Refer to Table 16-3. Assume that there are two digital cable TV companies operating in this market. If they are able to collude on the price and quantity of subscriptions to sell, what price (P) will they charge, and how many subscriptions (Q) will they sell collectively?
P = \$60, Q = 9,000
Table 16-3: The information in the table below shows the total demand for premium-channel digital cable TV subscriptions in a small urban market. Assume that each digital cable TV operator pays a fixed cost of \$100,000 (per year) to provide premium digital channels in the market area and that the marginal cost of providing the premium channel service to a household is zero.
Quantity | Price (per year)
0 | \$120
3,000 | \$100
6,000 | \$ 80
9,000 | \$ 60
12,000 | \$ 40
15,000 | \$ 20
18,000 | \$ 0

Refer to Table 16-3. Assume that there are two profit-maximizing digital cable TV companies operating in this market. Further assume that they are able to collude on the price and quantity of premium digital channel subscriptions to sell. As part of their collusive agreement they decide to take an equal share of the market. How much profit will each company make?
\$170000
Accounting profit is equal to
total revenue minus the explicit cost of producing goods and services.
The U.S. government protects fish, a common resource, by
selling fishing licenses and regulating fish lengths
Suppose a firm in a competitive market produces and sells 8 units of output and has a marginal revenue of \$8.00. What would be the firm's total revenue if it instead produced and sold 4 units of output?
\$32