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mauvehedgehog773Lv1

28 Sep 2019

1. If the marginal cost was $35, and the marginal benefit was $15, should the production level be increased, decreased, or left the same?

2. If the marginal cost was $20, and the marginal benefit was $45, should the production level be increased, decreased, or left the same?

3. When is allocative efficiency achieved?

4. Assume a company increases the production of t-shirts from 100 to 150 but had to decrease the production of pants from 200 to 175. What is the opportunity cost of producing more t-shirts?

5. What is the relationship between price and quantity demanded?

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Joshua StredderLv10

28 Sep 2019

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Related questions

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16. Which would not be considered as capital (or an economic resource) by an economist?

a. A share of corporate stock issued by General Motors

b. An automobile used by General Electric

c. A crane used by a building contractor

d. A razor used by a barber

17. The basic economic challenge confronting street entertainers is a :

a. Principal-agent problem

b. Free-rider problem

c. Monopoly problem

d. Taxation problem

18. When society overallocates resources to the production of a product it means that the:

a. Investment in the product is declining

b. Opportunity cost of the product is decreasing

c. Marginal benefit is greater than the marginal cost

d. Marginal benefit is less than the marginal cost

41. In a linear equation for price and quantity supplied, the value of the vertical intercept is 16 and the slope of the line is 5. If price is $296, the quantity supplied is:

a. 144

b. 150

c. 56

d. 24

43. Price Quantity supplied Quantity demanded

$10 100 295

$11 150 275

$12 190 250

$13 220 220

$14 245 180

$15 265 135

Refer to the above table. A technological advance lowers production costs such that the quantity supplied increase by 60 units of this product at each price. As a result of this technological change, equilibrium output in this market:

a. Decreased by 60 units

b. Increased by 60 units

c. Increased by 30 units

d. Decrease by 30 units

44. A and B are substitute goods, but A and C are complementary goods. If the costs of production of A decrease, then the demand for:

a. both B and C will decrease

b. both B and C will increase

c. B will increase and the demand for C will decrease

d. B will decrease and the demand for C will increase

48. Seller A was willing to sell 400 units of a commodity at a prices of $5 per unit. Seller A is now willing to sell the same number of units at a prices of $4 per units. Evidently, seller A has experiences a(n):

a. increase in supply

b. decrease in supply

c. increase in demand

d. decrease in demand

limecockroach896

2.) Consider a beekeeper that is deciding how much honey to produce. The beekeeper gains a benefit from producing honey, represented by the marginal benefit function and which is given by:

MB= 300 - 6Q

where Q is barrels of honey.

In addition, she has a marginal cost function, which reflects her cost of producing honey; this is given by:

MC= 40 + 4Q

The beekeeperâs total profit function is given by:

Profit= 360Q + Q^2

The more honey the beekeeper produces, the more bees there are to pollinate a neighboring apple orchard. Thus, in addition to the private benefit accruing to the beekeeper herself, there is also a marginal external benefit to the apple orchard, which is given by:

MEB= 100 - 2Q

And a total external benefit to the apple orchard given by:

TEB= 100Q - Q^2

a. Find an expression for the social marginal benefit (SMB) in this case, defined as you think appropriate. Calculate the level of honey production that will arise if the beekeeper acts in her self-interest only. Calculate the socially efficient level of honey production as well.

b. Suppose that the beekeeper and the owner of the apple orchard enter into negotiations. The orchard owner wants to offer a payment to the beekeeper to change honey production from her self-interested production level to the socially efficient level (all at once). What is the maximum total payment that the orchard owner would be willing to pay for this overall change? What is the minimum total payment that the beekeeper would require before making this overall change?

c. Assume that, if a deal is reached, each party must pay $35 in legal fees to finalize it. If there are no additional transaction costs, will the socially efficient quantity be reached? Explain.

d. Irrespective of your answer to part c, assume that the beekeeper and the orchard owner come to a private agreement to set honey production at the socially efficient quantity. However, now suppose that a policymaker reads somewhere that honey production provides a positive externality to apple orchards, and therefore decides that the beekeeper should be provided with a production subsidy for each unit of honey that the beekeeper is willing to produce. With this subsidy in place, the beekeeper decides to increase production by an additional 5 barrels. Calculate the associated efficiency loss.

e. If honey is good to eat and bees are good for trees, why is there such a thing as too much honey?

silvercrow642

1. A perfectly competitive firm will continue producing in the short run as long as it can cover its:

A.total cost.
B.average total cost.
C.average variable cost.
D.average fixed cost.

2. A perfectly competitive firm will earn a profit and will continue producing the profit-maximizing quantity of output in the short run if price is:

A.greater than marginal cost.
B.less than marginal cost.
C.less than average variable cost.
D.greater than average total cost.

3. Monopolistic competition is an industry characterized by:

A.a product with many close substitutes.
B.a horizontal demand curve.
C.a small number of firms.
D.barriers to entry and exit.

4. If a perfectly competitive firm increases production from 10 units to 11 units, and the market price is $20 per unit, total revenue for 10 units is:

A.$10.
B.$20
C.$200.
D.$210.

5. The demand curve facing a monopolist is:

A.horizontal, the same as that facing a perfectly competitive firm.
B.downward sloping, the same as that facing a perfectly competitive firm.
C.upward sloping, the same as that facing a perfectly competitive firm.
D.downward sloping, unlike the horizontal demand curve facing a perfectly competitive firm.