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Question: n a firm will maximize profit by producing that level...

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n A firm will maximize profit by producing that level of output at which o the additional revenue from the last unit sold exceeds the additional cost of the last unit by the largest amount. bthe additional revenue from the last unit sold equals the additional cost of the last unit. total revenue exceeds total cost by the largest amount. total revenue equals total cost o both b and c z) Use the following general linear demand function below, if c 15 and d- 20, the good is: where Q-quantity demanded, P- the price of the good, M income, the price of a good related in consumption a normal good. b an inferior good. o a substitute for good R o a complement with good R both a and c Derrick owns and operates a bakery. Every Saturday he bakes a batch of fresh kolaches, and every Saturday he sells all the kolaches and has to turn some customers away. Which of the following statements is correct? ) At the current price, quantity demanded exceeds quantity supplied biThe current price is higher than the equilibrium price. oIf Derrick raised the price of kolaches, the shortage would decrease o both a and c oall of the above 4) Suppose that the market for engagement rings is in equilibrium Then political unrest in South Africa shuts down the diamond mines there. South Africa is the worlds primary supplier of diamonds. What will happen? The equilibrium quantity of engagement rings will decrease. bThe equilibrium price of engagement rings will decrease. o The demand for engagement rings will decrease. oThe supply of engagement rings will increase. s Consumer surplus a)is negative for all but the last unit purchased. b) for a particular unit of consumption is computed by taking the difference between demand price and market price. o is the area below demand and above market price over all the units consumed. e added to producer surplus provides a measure of the net loss to society from the production and consumption of the good. eall of the above
6 For the equation Y-atbX, the objective of regression analysis is to a) estimate the parameters a and b b) estimate the variables Y and X o fit a straight line through the data scatter in such a way that the sum of the squared ) both a and c errors is minimized. 17) A parameter estimate is said to be statistically significant if the a) sample regression equals the population regression b) parameter estimated from the sample equals the true value of the parameter c) value of the t-ratio equals the critical value from the t-table d) true value of the parameter does not equal zero s In the regression model Y-a bx cZ, a test of the hypothesis that parameter c equals zero is a) an F-test. b) an R-test. e) a zero-statistiC d a t-test. e) a Z-test. 19) To test whether the overall regression equation is statistically significant uses a) the t-statistic b the R2-statistic e the F-statistic d the standard error statistic 20 A firm is deciding whether or not to close down its plant and modernize by installing new technology. Which of the following should management ignore when making the decision? )How much the present plant cost b) Cost of lost sales while the plant is closed o Added cost of the labor needed for the new plant ) All of the above
Extra Credit - 5 points 2) A manager in charge of new product development can hire engineers and market researchers. The annual salary of an engineer is $40,000 while a market researcher receives $20,000 The marginal contribution of engineers and market researchers are shown in the table below. Based on the table information, how should a manager with an annual budget of $240,000, allocate this budget in order to maximize the number of new products developed? a) Hire three engineers and four market researchers b) Hire three engineers and five market researchers Hire five engineers and two market researchers. d) Hire four engineers and four market researchers Engineers (E) Market Researchers (R Additional Worker New Products Worker New Products Additional 1 240 200 160 100 40 1 80 70 60 50 40 rd nd
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