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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.