Microeconomics exam 2

Johns accountant tells him thathe made a profit of $43,002 running a pot srudio. his wife cliams John lost $43,002. This means his wife is claiming that he incurred in costs.

• 86,004 implicit

• 43,002 implicit

• 86,004 explict

• 43,002 explicit

Suppose a local hardware store has explicit costs of $2 million per year and implicit costs of $44,000 per year. If the store earned an economic profit of $50,000 last year, this means that the store's accounting profit equaled:

• 6000

• 94000

• 2.044 million

• 2.05 million

Which statement describes an “either–or” decision?

• Chris must decide how many hours to work each week at part time job

• sally must decide how many hours to spend studying for each pf the four courses

• Dylan must decide whether to major in economics or finance

• Allen must decide how many courses to take

which statementt describes a HOW MUCH decision?

• Tim is trying to decide the amount of money to save each month to buy a new car

• Mary is trying to decide whether to go to work or college

• Andrea is trying to decide whether to graduate economics of law

• Andy is trying to decide whether to take prep courses

Until recently, Rosemarie worked as an accountant, earning $30,000 annually. Then she inherited a piece of commercial real estate that had been renting for $12,000 annually. Rosemarie decided to leave her job and operate a Peruvian restaurant in the space she inherited. At the end of the first year, her books showed total revenues of $260,000 and total costs of $230,000 for food, utilities, cooks, and other supplies. Her economic profit at the end of one year is:

• 30000

• 12000

• 0

• 230000

My Attempt

Bessie wants to calculate the accounting and economic profits of her cattle farm in Nebraska. She pays $30,000 per year in overhead, $80,000 in wages, and $20,000 in insurance. She forgoes $30,000 per year that she could make as a teacher. If her total revenue equals $140,000, that means her accounting profit is _____ and her economic profit is _____.

• -10000, -10000

• 30000,-30000

• 10000,-20000

Pauli's Pizza offers one slice for $2, two slices for $3.50, three slices for $4.50, and four slices for $5.00. Sal orders two slices. From this we know that Sal's marginal benefit from the second slice must be at least _____ and the marginal benefit from the third slice must be less than _____.

• 3.50,4.50

• 1.50,1.00

• 3.50,1.00

The purpose of behavioral economics is to determine why:

• firms maximize profit and minimize costs.

• people make decisions that appear to be irrational

• markets usually behave in an efficient manner.

The “good enough” method of decision making is also called:

• irrational decision making

• profit-maximizing behavior.

• bounded rationality.

If a person engages in mental accounting, he or she:

• tries to balance his or her bank account mentally, without writing anything down.

• tends to avoid making decisions.

• values some dollars more than others.