Question :
Table 1-1
Hours
Open
Total
Revenue
: 1387246
Table 1-1
Hours
Open
Total
Revenue
(dollars)
1
$50
2
75
3
95
4
110
5
120
6
125
Lydia runs a small nail salon in the town of New Hope. She is debating whether she should extend her hours of operation. Lydia figures that her sales revenue will depend on the number of hours the nail salon is open as shown in the table above. She would have to hire a worker for those hours at a wage rate of $10 per hour.
37) Refer to Table 1-1. Using marginal analysis, how many hours should Lydia extend her nail salon’s hours of operations?
A) 2 hours
B) 3 hours
C) 4 hours
D) 5 hours
E) 6 hours
38) Refer to Table 1-1. What is Lydia’s marginal benefit if she decides to stay open for two hours instead of one hour?
A) $25
B) $50
C) $75
D) $125
39) Refer to Table 1-1. What is Lydia’s marginal cost if she decides to stay open for two hours instead of one hour?
A) $10
B) $20
C) $25
D) $40
Table 1-2
Hours Open
Total Revenue (dollars)
1
$25
2
45
3
70
4
90
5
105
6
110
Thuy Anh runs a small flower shop in the town of Florabunda. She is debating whether she should extend her hours of operation. Thuy Anh figures that her sales revenue will depend on the number of hours the flower shop is open as shown in the table above. She would have to hire a worker for those hours at a wage rate of $16 per hour.
40) Refer to Table 1-2. Using marginal analysis, how many hours should Thuy Anh extend her flower shop’s hours of operations?
A) 2 hours
B) 3 hours
C) 4 hours
D) 5 hours
E) 6 hours
41) Refer to Table 1-2. What is Thuy Anh’s marginal benefit if she decides to stay open for three hours instead of two hours?
A) $0
B) $20
C) $25
D) $45
E) $70
42) Refer to Table 1-2. What is Thuy Anh’s marginal cost if she decides to stay open for three hours instead of two hours?
A) $0
B) $16
C) $25
D) $32
E) $45
43) Soo Jin shares a one-bedroom apartment with her classmate. Her share of the rent is $700 per month. She is considering moving to a studio apartment which she will not have to share with anyone. The studio apartment rents for $950 per month. Recently, you ran into Soo Jin on campus and she tells you that she has moved into the studio apartment. Soo Jin is as rational as any other person. As an economics major, you rightly conclude that
A) Soo Jin did not have a choice; her roommate was a slob.
B) Soo Jin figures that the additional benefit of having her own place (as opposed to sharing) is at least $250.
C) Soo Jin figures that the benefit of having her own place (as opposed to sharing) is at least $950.
D) the cost of having one’s own space outweighs the benefits.
44) If the marginal cost of keeping a doctor’s office open one additional hour per day is $200, then the doctor should keep the office open for one extra hour
A) only if the marginal benefit she receives is greater than $200 plus an acceptable profit margin.
B) as long as the marginal benefit she receives is just equal to or greater than $200.
C) as long as the marginal cost does not rise.
D) until the marginal benefit she receives reaches zero.
45) Consider the following statements:
a. Consumers buy more MP3 players from an electronics store that sells MP3 players at a lower price than other rival electronics stores in the area.
b. Schools take steps to increase security since they believe it is more costly to allow vandalism than to hire additional security guards.
c. Citrus growers produce more oranges when the selling price of oranges falls.
Which of the above statements demonstrates that economic agents respond to incentives?
A) a only
B) b only
C) c only
D) a and b
E) a, b, and c
46) A restaurant sells a large soft drink at a fixed price of $1.79. A term used by economists to describe the money received from the sale of an additional large soft drink is
A) marginal revenue.
B) gross earnings.
C) pure profit.
D) net benefit.
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