Managerial Econ Problems
Micro Chapter 25 Practice Questions Key
1. Derived demand is the demand: A) that arises because of monopoly control of resources in a market. B) for a product based on the tastes and preferences of consumers. C) derived from consumer satisfaction with a product. D) for a resource to produce a product.
Answer: D
2. Marginal revenue product is the increase in: A) total revenue from a decrease in the price of the product. B) marginal revenue from a decrease in the price of the product. C) marginal revenue from the use of an additional unit of a resource. D) total revenue from the use of an additional unit of a resource.
Answer: D
The following is a total-product schedule for a resource. Assume that the quantities of other resources the firm employs remain constant.
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3. Refer to the above table. If the product the firm produces sells for a constant $2 per unit, the marginal revenue product of the third unit of the resource is: A) $12. B) $20. C) $24. D) $36.
Answer: C
4. Refer to the above table. If the firm's product sells for a constant $2 and the price of a resource is $16, the firm will employ how many units of the resource? A) 2 B) 3 C) 4 D) 5
Answer: D
5. If the marginal revenue product (MRP) of labor is less than the wage rate: A) the firm is making profits. C) more labor should be employed. B) the firm is incurring losses. D) less labor should be employed.
Answer: D
6. A competitive employer will hire inputs up to the point where the: A) marginal product of the input reaches a maximum. B) price of the input equals the price of the output. C) price of the input equals the marginal product of the input. D) price of the input equals the marginal revenue product of the input.
Answer: D
The following table is for a purely competitive market for resources.
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7. Refer to the above table. At a wage rate of $11, the firm will choose to employ: A) 2
1. Derived demand is the demand: A) that arises because of monopoly control of resources in a market. B) for a product based on the tastes and preferences of consumers. C) derived from consumer satisfaction with a product. D) for a resource to produce a product.
Answer: D
2. Marginal revenue product is the increase in: A) total revenue from a decrease in the price of the product. B) marginal revenue from a decrease in the price of the product. C) marginal revenue from the use of an additional unit of a resource. D) total revenue from the use of an additional unit of a resource.
Answer: D
The following is a total-product schedule for a resource. Assume that the quantities of other resources the firm employs remain constant.
[pic]
3. Refer to the above table. If the product the firm produces sells for a constant $2 per unit, the marginal revenue product of the third unit of the resource is: A) $12. B) $20. C) $24. D) $36.
Answer: C
4. Refer to the above table. If the firm's product sells for a constant $2 and the price of a resource is $16, the firm will employ how many units of the resource? A) 2 B) 3 C) 4 D) 5
Answer: D
5. If the marginal revenue product (MRP) of labor is less than the wage rate: A) the firm is making profits. C) more labor should be employed. B) the firm is incurring losses. D) less labor should be employed.
Answer: D
6. A competitive employer will hire inputs up to the point where the: A) marginal product of the input reaches a maximum. B) price of the input equals the price of the output. C) price of the input equals the marginal product of the input. D) price of the input equals the marginal revenue product of the input.
Answer: D
The following table is for a purely competitive market for resources.
[pic]
7. Refer to the above table. At a wage rate of $11, the firm will choose to employ: A) 2