ASU HCD 201 Final Exam Prep Questions With Complete
Solutions
$30 because the $700 is a sunk cost. Correct Answers You
have bought a ticket for $700 for a concert ticket. At last minute
you can't go. You can, however, sell the ticket. The cost of
sending the ticket to someone overnight is $20, and you must
spend $10 for packaging. What is the minimum you should
accept, when selling the ticket?
A firm's total revenue minus its implicit and explicit costs.
Correct Answers What is the best definition of economic profit?
a. It is caused by a change in relative prices. Correct Answers
Which of the following statements about the substitution effect
of a price change is true?
a. It is caused by a change in relative prices.
b. It affects the consumer's ability, rather than willingness, to
purchase a good.
c. It is usually equal to the income effect.
allow monopolies to earn economic profit in the long run
Correct Answers Barriers to entry
are exactly proportional to their market prices Correct Answers
A consumer maximizes utility when the marginal utilities of all
goods
, Average variable costs are at least equal to price per unit
Correct Answers A firm will continue to operate at a loss in the
short-run as long as its:
b. MR=price=AVC Correct Answers Suppose that, in the short
run, a perfectly competitive firm earns a normal profit. Which of
the following is incorrect?
a. MR=price=ATC
b. MR=price=AVC
c. MR=AR
d. MR=price
buyers are willing and able to purchase at all prices Correct
Answers The demand for a product is the amount that
C. A lemonade stand Correct Answers Which of the following
would most likely reach the long run most rapidly?
a. A healthcare provider
B. A power plant
C. A lemonade stand
c. Each firm knows the quantity it wants to sell Correct
Answers Which of the following is true of a perfectly
competitive market structure?
a. Firms experience increasing returns to scale
b. Positive economic profit is possible in the long run
c. Each firm knows the quantity it wants to sell
Solutions
$30 because the $700 is a sunk cost. Correct Answers You
have bought a ticket for $700 for a concert ticket. At last minute
you can't go. You can, however, sell the ticket. The cost of
sending the ticket to someone overnight is $20, and you must
spend $10 for packaging. What is the minimum you should
accept, when selling the ticket?
A firm's total revenue minus its implicit and explicit costs.
Correct Answers What is the best definition of economic profit?
a. It is caused by a change in relative prices. Correct Answers
Which of the following statements about the substitution effect
of a price change is true?
a. It is caused by a change in relative prices.
b. It affects the consumer's ability, rather than willingness, to
purchase a good.
c. It is usually equal to the income effect.
allow monopolies to earn economic profit in the long run
Correct Answers Barriers to entry
are exactly proportional to their market prices Correct Answers
A consumer maximizes utility when the marginal utilities of all
goods
, Average variable costs are at least equal to price per unit
Correct Answers A firm will continue to operate at a loss in the
short-run as long as its:
b. MR=price=AVC Correct Answers Suppose that, in the short
run, a perfectly competitive firm earns a normal profit. Which of
the following is incorrect?
a. MR=price=ATC
b. MR=price=AVC
c. MR=AR
d. MR=price
buyers are willing and able to purchase at all prices Correct
Answers The demand for a product is the amount that
C. A lemonade stand Correct Answers Which of the following
would most likely reach the long run most rapidly?
a. A healthcare provider
B. A power plant
C. A lemonade stand
c. Each firm knows the quantity it wants to sell Correct
Answers Which of the following is true of a perfectly
competitive market structure?
a. Firms experience increasing returns to scale
b. Positive economic profit is possible in the long run
c. Each firm knows the quantity it wants to sell
