Ch 4 Mid Term

Which has a cost A) A cup of diamonds B) Checking account that charge fees for deposits below $100 C) A cup D) A decision E) A gallon of water

Who can determine waters true cost A) Anybody who puts their mind to it B) Nobody C) A good accountant D) Only the most competent hydrologist

Opp cost percieved by decision makers determine A) either demand or supply curves, but not both in the same case. B) demand curves. C) supply curves. D) both demand and supply curves.

Cost affecting decisions to supply goods and services are always A) costs not yet incurred. B) average costs. C) sunk costs. D) total costs. E) unavoidable costs.

Costs affecting decisions to supply are always A) marginal costs. B) accounting costs. C) non-taxable costs. D) per unit costs. E) past costs.

What happens to a farmers cost of growing crops if his land is rezoned and the price triples A) The costs rise, but only if the farmer rents the land from someone else. B) The costs rise, even if the farmer owns the land. C) There is no change unless industrialization somehow interferes with farming. D) The costs will probably fall, because industrialization is often incompatible with farming.

Opp cost: if more ppl repair their own cars the wages of mechanics would A) decline as the highest-cost mechanics left the business. B) rise, because mechanics would have to obtain more per hour to maintain their incomes. C) decline, because the marginal quality of the services provided would go down. D) rise in order to compensate for the smaller demand. E) not change because no change has occurred in demand or supply.

Increased demand for housing in suburbs of a major city have on the cost of vege farming in the suburbs A) The cost will rise because it will become more expensive to grow vegetables. B) The cost won't change, because there has been no change in physical conditions. C) No effect, since one cannot grow vegetables on land on which housing has been constructed. D) The cost will decline because only very fertile land will now be used for growing vegetables. E) We cannot predict unless we know what has happened to the demand for vegetables

Highschool dropout rate usually declines in an economic recession bc A) tuition and book prices usually fall in a recession. B) a decline in job opportunities lowers the cost of remaining in high school. C) laws are passed to prevent teenagers from entering the labor market. D) recessions increase the demand for education. E) high schools begin to offer more practical and relevant courses.

Sunk costs are irrelevant to econ decisions bc A) they are merely opportunity costs rather than monetary expenditures. B) they cannot affect a firm's net revenue. C) they represent no opportunity for choice. D) they do not appear on financial statements.

Pay a non refund 200 down payment to order a new item A) The $200 represents a marginal cost before you commit to the down payment. B) The $200 represents a sunk cost after you've committed to the down payment. C) Both A and B are true. D) Neither A nor B are true.

Purchased a new car for 20000 as soon as she drove it off the lot the market value fell to 17500 is the 2500 difference a sunk cost A) Yes it is, period. B) Yes it is, but only if Laura regrets her decision to have purchased the new Pontiac. C) Yes it is, but only if Laura receives no compensating benefit from the new Pontiac. D) Yes it is, but only if Laura decided to immediately resell the car. E) No

When a busn fails to cover sunk costs it usually A) stops operating until sunk costs are recovered. B) declares a stock split. C) does not immediately stop operating. D) declares bankruptcy.

If a busn operates indefinately w/o covering sunk costs what happens to sunk costs A) Nothing happens to them; they have ceased to exist. B) They continue unpaid for as long as the firm fails to make a profit large enough to cover them. C) They are distributed across the whole economy. D) They reduce the wealth of the investors who risked their wealth to make mistaken decisions possible.

Marginal costs are the costs relavant to a decision bc they A) the cost of producing one more unit of output. B) total cost minus sunk costs. C) total cost divided by units of output. D) are the costs that will be affected by the decision.