What is the total opportunity cost of the day that Farmer Tony incurred for his spring day in the field planting wheat?

What is the total opportunity cost of the day that Farmer Tony incurred for his spring day in the field planting wheat?

41. Zach’s economic profit for the year was

a. $–478,000.

b. $–56,000.

c. $2,000.

d. $22,000.

Use the
following information to answer questions 42 through 45.

Tony is
a wheat farmer, but he also spends part of his day teaching guitar lessons. Due
to the popularity of his local country western band, Farmer Tony has more
students requesting lessons than he has time for if he is to also maintain his
farming business. Farmer Tony charges $25 an hour for his guitar lessons. One
spring day, he spends 10 hours in his fields planting $130 worth of seeds on his
farm. He expects that the seeds he planted will yield $300 worth of wheat.

42. What is the total opportunity cost of the day
that Farmer Tony incurred for his spring day in the field planting wheat?

a. $130

b. $250

c. $300

d. $380

43. Tony’s accountant would most likely
figure the total cost of his wheat planting to equal

a. $25.

b. $130.

c. $300.

d. $380.

44. Tony’s accounting profit equals

a. $–80.

b. $130.

c. $170.

d. $260.

45. Tony’s economic profit equals

a. $–130.

b. $–80.

c. $130.

d. $170.

46. Dolores used to work as a high school teacher
for $40,000 per year but quit in order to start her own catering business. To
buy the necessary equipment, she withdrew $20,000 from her savings, (which paid
3 percent interest) and borrowed $30,000 from her uncle, whom she pays 3
percent interest per year. Last year she paid $25,000 for ingredients and had
revenue of $60,000. She asked Louis the accountant and Greg the economist to
calculate her profit for her.

a. Louis says
her profit is $34,100 and Greg says her profit is $6,500.

b. Louis says her profit is $34,100 and Greg
says she lost $6,500.

c. Louis
says her profit is $35,000 and Greg says she lost $5,000.

d. Louis
says her profit is $33,500 and Greg says her profit is 33,500.

47. A production function is a relationship
between

a. inputs
and quantity of output.

b. inputs
and revenue.

c. inputs
and costs.

d. inputs
and profit.

48. The marginal product of labor is equal to the

a. incremental
cost associated with a one unit increase in labor.

b. incremental
profit associated with a one unit increase in labor.

c. increase
in labor necessary to generate a one unit increase in output.

d. increase
in output obtained from a one unit increase in labor.

49. The marginal product of labor can be defined
as

a. change
in profit/change in labor.

b. change
in output/change in labor.

c. change
in labor/change in output.

d. change
in labor/change in total cost.

50. One would expect to observe diminishing
marginal product of labor when

a. crowded
office space reduces the productivity of new workers.

b. workers
are discouraged about the lack of help from other workers.

c. only
new workers are trained in using the most productive capital.

d. union
workers are told to reduce their work effort in preparation for a new round of
collective bargaining talks.


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