ECO 182 Study Guide - Midterm Guide: Opportunity Cost, Budget Constraint, Peanut Butter

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Six questions that could have been used for the second midterm test are listed below. The answers to the questions are given at the bottom of this file: the pbm corporation recently entered the perfectly competitive yo-yo industry. It has a one- year lease for its factory that requires it to pay dollars rental each day. The factory can produce up to 10 yo-yos each day. The marginal costs of the ten yo-yos that it can produce in a day are , , , , , , , , and respectively. Pbm"s maximum daily profit is (a) sh. (b) . (c) . (d) . (e) : a profit-maximizing competitive firm has a fixed input. The firm can alter the quantity that it produces by changing the quantity of labor it hires. The rental rate is r = per machine and the wage rate is w = per labor unit.

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