Question : 51) Pookie’s Pinball Palace restores old Pinball machines. Pookie has : 1244599

51) Pookie’s Pinball Palace restores old Pinball machines. Pookie has just spent $300 purchasing and cleaning a 1960s-era machine which he expects to sell for $2,000 once he is finished with the restoration. After having spent $300, Pookie discovers that he will need to rewire the entire machine at a cost of $1,100 in order to finish the restoration. Alternatively, he can sell the machine “as is” now for $1,000. What should he do?

A) He should sell the machine now to make the most profit.

B) It does not matter what he does; he is going to take a loss on his project.

C) He should rewire the machine, complete the task and then sell the machine.

D) He should have never purchased the machine because he has already spent too much time on it and has not been paid for that time.

52) Refer to Scenario 1-2. Using marginal analysis terminology, another economic term for the incremental revenue received from the sale of the last 300 hats is

A) gross earnings.

B) marginal revenue.

C) sales revenue.

D) gross profit.

53) Refer to Scenario 1-2. Using marginal analysis terminology, another economic term for the incremental cost of producing the last 300 hats is

A) marginal cost.

B) operating cost.

C) explicit cost.

D) Any of the above terms are correct.

54) Refer to Scenario 1-2. Had the firm not produced and sold the last 300 hats, would its profit be higher or lower, and if so by how much?

A) Its profit will be $1,100 higher.

B) Its profit will be $100 higher.

C) Its profit will be $100 lower.

D) Its profit will be $1,000 lower.

Table 1-3

Hours

Open

Total

Revenue

(dollars)

1

$70

2

120

3

160

4

184

5

200

6

210

Santiago runs a comic book store in the town of East Arbor. He is debating whether he should extend his hours of operation. Santiago figures that his sales revenue will depend on the number of hours the store is open as shown in the table above. He would have to hire a worker for those hours at a wage rate of $18 per hour.

55) Refer to Table 1-3. Using marginal analysis, determine how many hours should Santiago extend his store’s hours of operations?

A) 2 hours

B) 3 hours

C) 4 hours

D) 5 hours

E) 6 hours

56) Refer to Table 1-3. What is Santiago’s marginal benefit if he decides to stay open for two hours instead of one hour?

A) $40

B) $50

C) $120

D) $190

57) Refer to Table 1-3. What is Santiago’s marginal cost if he decides to stay open for two hours instead of one hour?

A) $18

B) $36

C) $38

D) $102

58) Damian shares a small food truck with his sister. His share of the expenses is $500 per month. He has decided to get his own, newer food truck which he will not have to share with anyone. His expenses for the newer truck are $1,400 per month. Damian is as rational as any other person. As an economics major, you rightly conclude that

A) Damian cannot afford the newer truck and will have to go back to sharing a truck with his sister.

B) Damian figures that the additional benefit of having his own truck (as opposed to sharing) is at least $900.

C) Damian figures that the benefit of having his own truck (as opposed to sharing) is at least $1,400.

D) the cost of having one’s own truck outweighs the benefits.

59) As recently as 2000, ________ percent of doctors were in private practice and by 2013, ________ percent of doctors were in private practice.

A) only 20; more than 70

B) nearly 60; less than 40

C) about 50; about 50

D) over 80; less than 15

60) The study of economics arises due to

A) money.

B) scarcity.

C) greed.

D) resources.