A+ Answers of the following Questions

Question 1
If we restrict our imports:
A. a greater tariff will be imposed.
B. our exports will decline.
C. we would have very little support from economists.
D. we would definitely solve all our trade problems.

Question 2
A hollow corporation:
A. makes goods abroad and ships them to the United States.
B. makes goods in the United States and ships them abroad.
C. imports foreign goods and puts its own name on them.
D. makes goods in the United States and has them sold abroad under another company's name.

Question 3
The economics profession nearly unanimously backs:
A. a balance of trade deficit.
B. budget surpluses.
C. budget deficits.
D. free trade.

Question 1         
If fixed cost is $8,000, variable cost is $5,000 at an output of 2 and $9,000 at an output of 3, how much is marginal cost at an output of 3?
A. $3,000
B. $4,000
C. $5,000
D. $8,000

Question 2         
Which statement is true?
A. AFC declines with output.
B. ATC declines with output.
C. AFC - AVC = ATC.
D. Output divided by fixed cost = AFC.

Question 3         
The average fixed cost curve:
A. is a vertical line.
B. is a horizontal line.
C. slopes downward to the right as output rises.
D. is U-shaped (it declines as output rises, reaches a minimum, and then rises).

Question 1         
As a firm's output expands, the:
A. ATC will reach a minimum before the AVC.
B. AVC will reach a minimum before the ATC
C. ATC and AVC will reach minimums at the same output.
D. ATC and AVC will reach maximums at the same output.

Question 2         
Marginal cost may be defined as the __________ cost that results from producing one more unit of output.
A. change in average total
B. change in average variable
C. change in total
D. rate of change in total fixed

Question 3         
Which is most clearly a fixed cost?
A. Insurance premiums
B. Wages of production workers
C. Cost of raw materials
D. Shipping costs

Question 1         
Fixed cost is sometimes referred to as __________ cost.
A. sunk
B. variable
C. total
D. economic

Question 2         
XXXXX XXXXX noted each of the following economies of scale EXCEPT:
A. specialization.
B. diminishing returns.
C. saving of time that would otherwise be spent going from one task to another.
D. employment of expensive equipment.

Question 3         
Parkinson's Law is an example of:
A. economies of scale.
B. diseconomies of scale.
C. XXXXX XXXXX's pin factory.
D. the firm's search for its most profitable output.

Question 1         
Which of the following is the most likely to be a variable cost?
A. Raw material costs
B. Leasing payments of tour buses for rock and roll bands
C. Interest on bonded indebtedness
D. Real estate taxes

Question 2         
As long as there are __________ costs, we are in the short run.
A. variable
B. fixed
C. marginal
D. average

Question 3         
If price is between the break-even point and the shutdown point, in the long run the firm will:
A. operate.
B. make a profit.
C. stay in business.
D. go out of business.