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Mizzou Econ 3251 Exam With Complete Solutions
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Mizzou Econ 3251 Exam With Complete Solutionsis efficient - ANSWER Why must isoquants be thin?
Isoquants must be thin because we assume production
is decreasing as "x" increases - ANSWER Measuring "y" on the vertical axis and "x" on
the horizontal axis, convexity of indifference curves implies that that MRS of "y" for "X"
he would give up 5 salads to get the next pizza - ANSWER If Fred's marginal rate of
substitution of salad for pizza quals 5 then
4 - ANSWER Given the production function q= 4L+K what is the marginal product of
labor when capital is fixed at 50?
Joes marginal product diminishes by 0.2 for each additional hour worked - ANSWER
Joey cuts lawns during the summer. Let q equal the number of acres mowed per day,
and let L equal the number of hours worked per day. Joey never works more than eight
hours per day, and during that time his short-run production function is q= 0.2 x L. Which
of the following statements is false
12 - ANSWER If MPk=3 and MRTS= -4 what is MPL?
a+b > 1 - ANSWER Let the production function be q=ALaKb. The function exhibits
increasing returns to scale if
$45,000 - ANSWER Sarah earns $40,000 per year working for a large corporation. She is
thinking of quitting this job to work full time in her own business. She will invest her
savings of $50,000 (annual 10% rate of return) into the business. Her annual opportunity
cost the this new business is
, $330,000 = ($55,000x6) - ANSWER Tom is going to quit his job to pursue his PhD in
economics which will take him 6 years to complete. He currently makes $55,000 per
year as a high school teacher. While going to school, he will receive a stipend of $24,000
per year plus $6,000 per year to help cover food and rent. His living expenses are the
same regardless of what he does. What is Toms opportunity cost of pursuing his PhD
12
50/5=10
10+2= - ANSWER Suppose the total cost of producing T-shirts can be represented as
TC= 50 + 2q the average cost of the 5th T-shirt is
The firms can move to the lowest possible isocost curve - ANSWER long-run average
cost is never greater then short-run average cost because in the long run
$35,000 & $10,000 - ANSWER A small business owner earned $75,000 in revenue
annually. The explicit annual cost equals $40,000. The owner could work for someone
else and earn $20,000 annually. The owners accounting profit is____ and owner's
economic profit is _____
marginal revenue minus marginal cost equals zero (MR-MC=0) - ANSWER A firms sets its
output where
the only firms that survive are those that maximizes profits - ANSWER The survival
principle states that
can create new industries or destroy old ones - ANSWER Disruptive innovations
10
6+10/2=8
(10-8)x5= - ANSWER suppose the market supply curve is p= 5+Q. At a price of 10,
producer surplus equals
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