Question :
11) If the total cost incurred in hiring ten workers : 1377314
11) If the total cost incurred in hiring ten workers by a firm is $45, and the total cost incurred when the eleventh worker is hired is $60, the marginal cost of hiring the eleventh worker is:
A) $1.33.
B) $15.
C) $20.
D) $105.
12) In choosing between apartments in two different locations, the marginal commuting cost is given by:
A) the sum of the commuting cost from each apartment to the destination.
B) the commuting cost from the apartment located closer to the destination.
C) the commuting cost from the apartment located farther away from the destination.
D) the difference between the commuting cost from two different apartments to the destination.
13) If the marginal rent cost of moving from apartment 1 to apartment 2 is -$60 and marginal commuting cost of moving from apartment 1 to apartment 2 is $40:
A) moving from apartment 1 to 2 will cost the renter $60 more in rent and $40 more in commuting.
B) moving from apartment 1 to 2 will save the renter $60 more in rent and $40 more in commuting.
C) moving from apartment 1 to 2 will save the renter $60 in rent but cost $40 more in commuting.
D) moving from apartment 1 to 2 will cost the renter $60 more in rent but save $40 in commuting.
Assume that a firm wants to set up a factory. It has four different options. The rent of the factory in the four different locations and the time taken to transport the product from each location to the market is shown in the following below. The opportunity cost of time is $10 per hour.
Factory Location
Monthly Commuting Time (hours)
Monthly Rent ($)
Very far
30
2,060
Far
25
2,100
Close
15
2,300
Very Close
5
2,500
14) Refer to the table above. If the firm decides to choose factory “Far” over “Close,” what is its marginal opportunity cost of transporting products to the market?
A) $100
B) -$200
C) $50
D) $150
15) Refer to the table above. What is the marginal rent cost if the firm decides to choose factory “Very Close” over factory “Close”?
A) -$100
B) -$200
C) $100
D) $200
16) Refer to the table above. What is the marginal opportunity cost of transporting products to the market if the firm decides to choose factory “Far” over factory “Very Far”?
A) -$50
B) -$100
C) $50
D) $150
17) Refer to the table above. What is the marginal rent cost if the firm decides to choose factory “Far” over factory “Very Far”?
A) $40
B) $100
C) $150
D) -$150
18) Refer to the table above. For which of the following choices is the marginal total cost the lowest?
A) Choosing factory “Close” over factory “Far”
B) Choosing factory “Far” over factory “Very Far”
C) Choosing factory “Very Close” over factory “Close”
D) Choosing factory “Close” over factory “Very Far”
19) Refer to the table above. Which is the optimum location for the firm to set up its factory?
A) Far
B) Very far
C) Close
D) Very Close
20) The principal of optimization at the margin states that:
A) an optimal alternative has the least indirect costs in comparison to other feasible alternatives.
B) an optimal alternative has the highest net benefits in comparison to other feasible alternatives.
C) moving toward the optimal alternative makes the decision maker better off, and moving away from it makes him worse off.
D) moving toward the optimal alternative makes the decision maker worse off, and moving away from it, makes the decision maker better off.
