ECO 365T Wk 5 - Apply Summative Assessment Quiz

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ECO 365T Wk 5 - Apply Summative Assessment Quiz

Answer the question on the basis of the following information.

Number of Workers       Total Product  Marginal Product

0     0     ---

1     8     8

2          10

3     25   

4     30   

5          3

6     34   

The average product when there are two workers

Multiple Choice

•      is 10.
•      is 9.
•      is 28.
•      cannot be determined from the information given.

The following is cost information for the Creamy Crisp Donut Company.

Entrepreneur's potential earnings as a salaried worker = $40,000

Annual lease on building = $25,000

Annual revenue from operations = $420,000

Payments to workers = $150,000

Utilities (electricity, water, disposal) costs = $8,000

Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000

Entrepreneur's forgone interest on personal funds used to finance the business = $6,000

Creamy Crisp's total revenues exceed its total costs, including a normal profit, by

Multiple Choice

•      $309,000.
•      $183,000.
•      $237,000.
•      $111,000.

Plant sizes get larger as you move from ATC-1 to ATC-4.

Output    ATC-1     ATC-2     ATC-3     ATC-4

1,500      $ 1015    $ 20$ 30

2,000      8     12    17    25

2,500      9     10    15    20

3,000      12    8     13    18

3,500      15    6     11    16

4,000      18    10    9     14

4,500      20    12    7     12

5,000      24    15    11    10

5,500      29    19    13    8

6,000      35    25    15    9

In the long run, the firm should use plant size ATC-3 for what level of output?

Multiple Choice

•      less than 3,000
•      3,000 to 3,500
•      4,000 to 4,500
•      5,000 to 5,500

Use the following data to answer the question.

Inputs of Labor      Total Product

0     0

1     10

2     22

3     36

4     48

5     58

6     66

7     63

The average product (AP) when three units of labor are hired is

Multiple Choice

•      14
•     

•      108.
•      28.

Answer the question on the basis of the following output data for a firm. Assume that the amounts of all nonlabor resources are fixed.

Number of Workers       Units of Output

0     0

1     50

2     90

3     125

4     150

5     170

6     165

The marginal product of the sixth worker is

Multiple Choice

•      165 units of output.
•      20 units of output.
•     

−5 units of output.

−15 units of output.