To find economic profit from accounting profit, it is necessary to

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Write My Essay For MeTo find economic profit from accounting profit, it is necessary toSelect one:A. subtract dividends.B. add depreciation expense.C. subtract the opportunity cost of capital.D. add retained earnings.Question 2The present value of expected future profits will _____ if the discount rate increases and will_____ if expected future profits increase. Select one:A. increase; not changeB. increase; increaseC. not change; decreaseD. decrease; increase E. decrease; decreaseQuestion 3Managerial economics draws upon all of the following EXCEPT:Select one:A. financeB. microeconomicsC. accountingD. marketingE. sociologyQuestion 4Managers may make decisions that are not consistent with the goals of stockholders. This is referred to as the _____ problem.Select one:A. principal-agentB. economic disincentiveC. incentive-compromiseD. efficiency-inefficiencyE. equilibrium Question 5Marginal revenue can be defined as the:Select one:A. percent increase in total revenue resulting from a one percent increase in outputB. increase in total revenue resulting from a one unit increase in outputC. total revenue divided by outputD. average revenue multiplied by outputE. average revenue multiplied by output divided by 4Question 6The cross-price elasticity of demand is defined as the:Select one:A. percentage change in the quantity demanded of a good divided by the percentage change in the good’s priceB. percentage change in the quantity demanded of a good divided by the percentage change in a different good’s priceC. percentage change in a good’s price divided by the percentage change in a different good’s priceD. change in the quantity demanded of a good divided by the change in its priceE. change in the quantity demanded of a good divided by the change in incomeQuestion 7Consumer surplus is defined as:Select one:A. the quantities of a good or service that bring equal utility to the consumerB. the quantity of a good or service that is utility maximizing for the consumerC. the difference between what a consumer is willing to pay and what he or she actually pays for a good or serviceD. the difference between the market price and the marginal cost of producing a good or serviceE. none of the above Question 8The demand for a product is more inelastic the:Select one:A. longer the time period coveredB. lower the average income of consumersC. better the available substitutesD. poorer the available substitutesQuestion 9If one day it was discovered that lime juice caused cancer, which of the following would likely result?Select one:A. The supply curve of lime juice would shift to the right.B. The demand curve for lime juice would shift to the right.C. The demand curve for lime juice would shift to the left.D. The supply curve of lime juice would shift to the left.Question 10The demand curve’s usual slope implies that consumers:Select one:A. buy more as the price of a good is increasedB. buy more as a good is advertised moreC. buy more at higher average incomesD. buy less as the price of a good is increasedE. have tastes that sometimes change Question 11 According to the above figure, the highest price that consumers would be willing to pay for quantity Q2 isSelect one:A. P1.B. P0.C. P2.D. cannot be determined from the diagram. Question 12The price elasticity of demand can be interpreted as the:Select one:A. percentage change in the quantity demanded divided by the percentage change in the good’s priceB. percentage change in the quantity demanded divided by the percentage change in a substitute good’s priceC. percentage change in the good’s price divided by the percentage change in quantity demandedD. change in the quantity demanded of a good divided by the change in its priceE. change in the quantity demanded of a good divided by the change in a related good’s price Question 13If the demand for a product falls and the supply stays the same,Select one:A. the market clearing price will rise and the equilibrium quantity will fall.B. both the market clearing price and the equilibrium quantity will fall.C. both the market clearing price and the equilibrium quantity will rise.D. the market clearing price will fall and the equilibrium quantity will rise. Question 14Question text At a price of P0 in the above figure, which of the following statements is FALSE?Select one:A. P0 is the market clearing price.B. There is a surplus equal to Q0.C. There is an equilibrium in the market.D. Quantity demanded equals quantity supplied.Question 15The demand for a product is more elastic the:Select one:A. longer the time period coveredB. higher the average income of consumersC. smaller the share of a consumer’s income the item representsD. larger the number of firms in the marketQuestion 16A good whose demand curve shifts to the left as income increases is a(n):Select one:A. normal goodB. substitute goodC. inferior goodD. inelastic goodE. abnormality goodQuestion 17As we move down a linear demand curve, demand becomes:Select one:A. more elasticB. less elastic at first and then more elasticC. steeperD. more elastic at first and then less elasticE. less elasticQuestion 18Suppose that the price elasticity of demand is -0.5. A 20 percentincrease in the price will cause quantity demanded to _________ from 250 to ________. Select one:A. Increase; 200.B. Increase; 225.C. Decrease; 200.D. Decrease; 225.Question 19Makers of disposable diapers must advertise 5 percent more to offset completely the 2 percent decline in sales due to heightened environmental concern. The advertising elasticity of demand is:Select one:A. 4.0B. 0.4C. 2.5D. 0.25E. 0.20 Question 20The marginal rate of technical substitution between two inputs:Select one:A. shows the rate at which one input can be traded for another, holding output constantB. shows the efficient combination of inputsC. increases as we move down an isoquantD. shows the rate at which output can be increased by using more of both inputsE. shows the rate at which output decreases when using less of one of the inputsQuestion 21The marginal product of labor is defined by the:Select one:A. change in output divided by the change in labor input usageB. change in labor input usage divided by the change in outputC. output divided by the labor input usageD. labor input usage divided by the output levelE. output divided by the marginal product of labor Question 22The law of diminishing returns:Select one:A. Implies that productive resources are not efficiently employed.B. Is a long-run phenomenon.C. Can only occur when all inputs are increased proportionally.D. Is a short-run phenomenon. Question 23The law of diminishing marginal returns states that:Select one:A. the marginal product of labor declines as all inputs are increasedB. production functions exhibit decreasing returns to scaleC. the marginal product of labor returns as more capital is usedD. the marginal product of a factor eventually diminishes as more of the input is used, holding other inputs fixedE. the marginal product of a factor always diminishes as more of the input is used, holding other inputs fixedQuestion 24A production function is a table, a graph, or an equation showing the:Select one:A. least-cost method of producing outputB. optimal combination of inputsC. maximum output that can be achieved from specified levels of inputsD. combinations of inputs that can be produced with equal costsE. optimal production technology that a firm should employQuestion 25When average product is at a maximum, marginal product is:Select one:A. zeroB. increasingC. equal to average productD. greater than average productE. less than average productQuestion 26An isoquant represents combinations of inputs that:Select one:A. produce the same level of outputB. produce increasing amounts of outputC. minimize costsD. maximize outputE. create wealthQuestion 27Lines that represent bundles of inputs that cost the same total amount are called:Select one:A. total cost curvesB. isocost curvesC. cost curvesD. isoquantsE. isoprofit curves Question 28Consider the Cobb-Douglas production function Q = 33K0.30L0.60where K is capital and L is labor. This production function exhibits: Select one:A. Increasing returns to scale. B. Constant returns to scale.C. Decreasing returns to scale.D. Zero returns to scale. Question 29Suppose that the price elasticity of demand is -2.0 and the price ofthe product is $10. Marginal revenue is: Select one:A. $2.B. $3.C. $4.D. $5. Question 30Hedge Fun is a landscaping firm that specializes in topiary. Last year, the firm had 60 employees and served 120 customers. This year, it had 70 employees and served 140 customers. What is the marginal product of labor?Select one:A. 2B. 3C. 4D. 5 Question 31In the table below, the average product of labor at L = 3 is: Select one:A. 5B. 8C. 0.2D. 2E. 3 Question 32In the table below, the marginal product of labor at L = 4 is: Select one:A. 7B. 11C. 17D. 16E. 6Question 34Managers at Stars corporation, which sells Specialty T-shirts decided that the demand function for their product can be represented by the following equation:Q = 200 -3P -2 Pr + 0.1 IWhere Q is the quantity demanded per month, P is the price of a shirt, Pr is the price of a related product, and I is per capita disposable income. The current values for these variables are Pr =$12, and I= $5,000a.If P =$10, how many shirts can the company sell per month?b.Given P = $10, what is the price elasticity of demand for shirts?c.Given your answer in part b, what pricing recommendation would you give the managers at Stars if they wish to increase Total Revenues? Explain.d. What would you need to calculate to find the impact of a change in I on the quantity demanded for hats per month? How would you interpret your calculations? Explain your answer.Question 35An electronics plant’s production function is Q = 2LK, where Q is its output rate, L is the amount of labor it uses per period, and K is the amount of capital it uses per period. The price of labor is $ 6 per unit of labor, and the price of capital is $4 per unit of capital. The firm’s vice president for manufacturing hires you to determine which combination of inputs the plant should use to produce 50 units of output per period. a.What advice would you give him? i.e. how many units of L and K should they hire? Explain to the vice president how you would go about solving this problem. b. Suppose the price of labor decreases to $5 per unit. Without doing any calculations, what effect will this have on your recommendation, if any? Question 37Suppose that the market supply and demand equations for a given product are: QD = 500 – 10P QS = – 100 + 20PDetermine the equilibrium price and quantity for this market.

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