Question

Student Name: Amita Patel Student Email: amipatelbe@gmail.com Site Title: Economics UOP custom CW Book's Title: UOP-custom course for Economics Book's Author: Case Location on Site: Chapter 3 > Lecture Exam Questions 100% Correct of 8 Scored items: 8 correct: 100% 0 incorrect: 0% Submitted on April 10, 2010 at 11:08 AM (EDT) ------------------------------------------------------------------- Question 1 The demand curve facing each wool producer is ________ starting at $3.00 per pound. Correct: horizontal. ------------------------------------------------------------------- Question 2 If a firm in a perfectly competitive industry raises price above market price, Correct: its sales will drop to zero. ------------------------------------------------------------------- Question 3 The fast food industry is not considered perfectly competitive because: Correct: the firm's products are differentiated. ------------------------------------------------------------------- Question 4 You are certain that a normal rate of profit is 18% for the fast-food industry. What is your estimate of a normal rate of profit in the computer software industry, which is considered to be much riskier than the computer industry' Correct: above 18% ------------------------------------------------------------------- Question 5 Situation 1: You are the owner an only employee of a company that writes computer software that is used by doctors to bill patients. Last year you earned a total revenue of $90,000. Your costs for equipment, rent, and supplies were $60,000. To start this business you quit a job at another computer software firm that paid $40,000 a year. A yearly normal profit for your computer software firm would be Correct: $40,000. ------------------------------------------------------------------- Question 6 The marginal product of the second worker is. Correct: 20 ------------------------------------------------------------------- Question 7 Demand for the product of an industry in perfect competition is assumed to be inelastic. Correct: False ------------------------------------------------------------------- Question 8 If the first worker produces five custom picture frames a day, and the second worker produces five additional custom picture frames a day, it is clear that diminishing marginal returns have set in. Correct: True