Question :
231.Supposeyouvalueaspecialwatchat$100.Youpurchaseitfor$75.Onyourwayhomefromclassoneday,youlosethewatch.Thestoreisstillsellingthesamewatch,butthepricehasrisento$85.Assumethatlosingthewatchhasnotalteredhowyouvalueit.Wha : 1261540
231.Supposeyouvalueaspecialwatchat$100.Youpurchaseitfor$75.Onyourwayhomefromclassoneday,youlosethewatch.Thestoreisstillsellingthesamewatch,butthepricehasrisento$85.Assumethatlosingthewatchhasnotalteredhowyouvalueit.Whatshouldyoudo?
a.Paythe$85tobuythewatch.
b.Waittoseeifthewatchgoesonsale.Ifthepricedropsto$75orless,buythewatch.
c.Waittoseeifthewatchgoesonsale.Ifthepricedropsto$25orless,buythewatch.
d.Donotbuythewatch.
232.Supposeyouboughtatickettoafootballgamefor$30andthatyouplacea$35valueonseeingthegame.Ifyoulosetheticket,thenwhatisthemaximumpriceyoushouldpayforanotherticket?Assumethatlosingtheticketdoesnotalterhowyouvalueit.
a.$5
b.$30
c.$35
d.$65
233.Youpurchasea$30,nonrefundabletickettoaplayatalocaltheater.Tenminutesintotheshowyourealizethatitisnotaverygoodshowandplaceonlya$10valueonseeingtheremainderoftheshow.AlternativelyyoucouldleavethetheaterandgohomeandwatchTVorreadabook.Youplacean$8valueonwatchingTVanda$6valueonreadingabook.
a.Youshouldleavethetheatersincethenetbenefitfromseeingtheremainderoftheshowis-$20,whilegoinghomewillearnyouatleast$8ofsatisfaction.
b.Youshouldstayandwatchtheremainderoftheshow.
c.YoushouldgohomeandwatchTV.
d.Youshouldgohomeandreadabook.
234.Youpurchasea$30,nonrefundabletickettoaplayatalocaltheater.Tenminutesintotheshowyourealizethatitisnotaverygoodshowandplaceonlya$10valueonseeingtheremainderoftheshow.AlternativelyyoucouldleavethetheaterandgohomeandwatchTVorreadabook.Youplacean$8valueonwatchingTVanda$12valueonreadingabook.
a.Youshouldstayandwatchtheremainderoftheshow.
b.YoushouldgohomeandwatchTV.
c.Youshouldgohomeandreadabook.
d.YoushouldgohomeandeitherwatchTVorreadabook.
235.Asunkcostisonethat
a.changesasthelevelofoutputchangesintheshortrun.
b.waspaidinthepastandwillnotchangeregardlessofthepresentdecision.
c.shoulddeterminetherationalcourseofactioninthefuture.
d.hasthemostimpactonprofit-makingdecisions.
236.Wheneconomistsrefertoaproductioncostthathasalreadybeencommittedandcannotberecovered,theyusetheterm
a.implicitcost.
b.explicitcost.
c.variablecost.
d.sunkcost.
237.Acorporationhasbeensteadilylosingmoneyononeofitsproductlines,plasticflamingolawnornaments.Thefirmproducesplasticflamingosinafactorythatcost$20milliontobuild10yearsago.Thefirmisnowconsideringanoffertobuythatfactoryfor$15million.Whichofthefollowingstatementsaboutthedecisiontosellornottoselliscorrect?
a.Thefirmshouldturndownthepurchaseofferbecausethefactorycostmorethan$15milliontobuild.
b.The$20millionspentonthefactoryisasunkcost;thatcostshouldnotaffectthedecision.
c.The$20millionspentonthefactoryisanimplicitcost,whichshouldbeincludedinthedecision.
d.Thefirmshouldsellthefactoryonlyifitcanreduceitscostselsewhereby$5million.
238.Supposethatyouvalueahatfromyourfavoriteuniversityat$20.Theuniversitybookstorehasthehatonsalefor$15.Youpurchasethehatbutloseitonthewayhome.Whatshouldyoudo?Assumethatlosingthehatdoesnotalterhowyouvalueit.
a.Gobacktothebookstoreandpurchaseanotherhat.
b.Waituntilthecostofthehatfallsto$15orlessbeforepurchasinganotherhat.
c.Waituntilthecostofthehatfallsto$5orlessbeforepurchasinganotherhat.
d.Donotpurchaseanotherhatregardlessoftheprice.
239.Inthelongrun,afirmwillenteracompetitiveindustryif
a.totalrevenueexceedstotalcost.
b.thepriceexceedsaveragetotalcost.
c.thefirmcanearneconomicprofits.
d.Alloftheabovearecorrect.
240.Inthe long run, a firm will exit acompetitive industry if
a.totalrevenueexceedstotalcost.
b.thepriceexceedsaveragetotalcost.
c.averagetotalcostexceedstheprice.
d.Bothaandbarecorrect.
241.Inthelongrun,aprofit-maximizingfirmwillchoosetoexitamarketwhen
a.averagefixedcostisfalling.
b.variablecostsexceedsunkcosts.
c.marginalcostexceedsmarginalrevenueatthecurrentlevelofproduction.
d.totalrevenueislessthantotalcost.
242.Afirmthatexitsitsmarkethastopay
a.itsvariablecostsbutnotitsfixedcosts.
b.itsfixedcostsbutnotitsvariablecosts.
c.bothitsvariablecostsanditsfixedcosts.
d.neitheritsvariablecostsnoritsfixedcosts.
243.Thecompetitivefirm’slong-runsupplycurveisthatportionofthemarginalcostcurvethatliesaboveaverage
a.fixedcost.
b.variablecost.
c.totalcost.
d.revenue.
244.Whichofthefollowingrepresentsthefirm’slong-runconditionforexitingamarket?
a.exitifP