quizz chapter 3 + 4

If Px = 5 and Py = 20 and I = 1,000, what is the function of budget constraint?

• a.

  Y = 50 + 1/4X

• b.

  Y = 50 - 1/4X

• 
  Y = 100 + 4X

• Y = 200 - 1/4X

Cindy’s Car Wash has average variable costs of $2 and average fixed costs of $3 when it produces 100 units of output (car washes). The firm's total cost is

• a.

  $500.

• b.

  $200.

• c.

  $100

• d.

  $300

Economists normally assume that the goal of a firm is to

• 
  maximize its profit.

• minimize its explicit costs.

• 
  maximize its total revenue.

• minimize its total cost.

For a firm, the production function represents the relationship between

• quantity of inputs and total cost.

• quantity of inputs and quantity of output.

• 
  quantity of output and total cost.

• 
  implicit costs and explicit costs.

How long does it take a firm to go from the short run to the long run?

• six months

• It depends on the nature of the firm.

• two years

• one year

If the government passes a law requiring sellers of mopeds to send $200 to the government for every moped they sell, then

• sellers of mopeds receive $200 less per moped than they were receiving before the tax

• buyers of mopeds are unaffected by the tax.

• None of the above is correct

• the supply curve for mopeds shifts downward by $200.

In the short run, a firm incurs fixed costs

• whether it produces output or not.

• 
  only if it produces a positive quantity of output.

• only if it incurs variable costs.

• only if it produces no output.

Which of the following can be added to profit to obtain total revenue?

• net profit

• 
  capital profit

• total cost

• operational profit

If the two products are perfectly substitute, their indifference curve will be a straight line.

• true

• false

Budget constraint's function is given as: Y = 100 - 2X. If P_Y = 10,

• 
  P_X = 20 and I = 1,000

• 
  P_X = 10 and I = 2,000

• 
  P_X = 5 and I = 100

• P_X = 20 and I = 2,000