ECO 1050 Sophia Learning - Microeconomics - Final Milestone: MILESTONE; Score 25/25.

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MILESTONE Score 25/25 You passed this Milestone 25 questions were answered correctly. 1 Number of Employees Total Production Marginal Product of Labor Marginal Revenue Product 0 0 0 1 18 18 2 ... 30 12 3 41 11 4 46 5 If the price of the item is $10.00 per unit and the employees cost $100 each, how many employees should the firm hire to maximize their profit? • One employee • Four employees •  Three employees • Two employees CONCEPT Output Optimization: Marginal Revenue Product 2 As a consumer's income increases, demand for this type of good decreases. The statement above corresponds to which type of good? • Sophia :: Welcome Page 1 of 13 https://capella.sophia.org/spcc/microeconomics-2/milestone_take_feedbacks/5128360 8/10/2020Giffen good • Veblen good •  Inferior good • Luxury good CONCEPT Types of Goods 3 Which of the following is true about the long run average cost curve? • The long run average cost curve can be found as the MC from above the shut down point onward. •  The long run average cost curve is comprised of all the lowest points of each of the short run average cost curves because no firm will operate at a level of higher per-unit costs in the long run than in the short run. • The long run average cost curve cannot be equal to or lie below any short run average cost curve because in the short run all factors of production can be variable. • The long run average cost curve is shaped like a bell and rises because of economies of scale while falling because of diseconomies. CONCEPT Long-Run Supply Curve 4 Which of the following is an example of a constraint? •  Peter's Place can serve 300 people in its banquet room, and often has to turn away large parties. • Sarah decides not to purchase an additional pair of Ugg boots because she already has two pairs at home. • A SouthCoast Clothing decides that five machines and 15 workers is the most efficient in production. Sophia :: Welcome Page 2 of 13 https://capella.sophia.org/spcc/microeconomics-2/milestone_take_feedbacks/5128360 8/10/2020• Harbor Sweets will produce to the point where marginal revenue is equal to marginal cost. CONCEPT Resource Allocation for Firms 5 If the variable costs for a firm are $57, the fixed costs are $143, and the firm sells 40 units, what are the firm's average total costs? • $25.00 •  $5.00 • $10.00 • $20.00 CONCEPT Cost: Total, Marginal and Average 6 Which of the following is an example of an inferior good? • Every once in a while, Nelly treats herself to a manicure and pedicure with a massage. • Very poor people in China consume a great deal of rice. When the price of rice rises, consumption of it may even rise. • A famous brand of leather good produces a handbag that costs as much as a used car. Although it is far from cheap, it is one of the brand's most popular items. •  Chris just graduated from college and sometimes eats ramen noodles when his finances get tight. After he gets his paycheck, he purchases less ramen noodles as he can afford healthier food. CONCEPT Types of Goods 7 Sophia :: Welcome Page 3 of 13 https://capella.sophia.org/spcc/microeconomics-2/milestone_take_feedbacks/5128360 8/10/2020Which of the following is true if two indifferences curves cross each other on a preference map? • The curves are an example of consistent preferences. • If the curves are from the same rational individual, then they do not violate the assumptions of consumer choice theory. •  The curves would represent two different individuals. • The curves are from the same rational individual. CONCEPT Consumer Choice Theory 8 Which of the following is true regarding contingent valuation? • An approach used to compare expenses and value-added when making a decision relative to the environment • An examination of healthcare costs that are incurred as a result of pollution • Seen when houses located in areas of less pollution have greater value •  Used to evaluate individual preferences in order to place a value on the environment CONCEPT Assessing Costs of Waste and Pollution--Environmental Economics 9 Which statement below is NOT true regarding process mapping? •  Almost all business practices and decisions have been documented in some way or another. • Process mapping is used for evaluating sustainable business solutions. • Sophia :: Welcome Page 4 of 13 https://capella.sophia.org/spcc/microeconomics-2/milestone_take_feedbacks/5128360 8/10/2020A process map is a visual representation of the stages in a process. • Process mapping forms a foundation for efficiency evaluation. CONCEPT Process Mapping--Efficiency 10 Last year, Paula's income was $2,000, and she went to vacation twice. This year, Paula's income increased to $3,000, and she went to vacation five times. Determine the income elasticity using the midpoint formula. • 0.33 • 1.80 • 0.47 •  2.14 CONCEPT Income Elasticity 11 Which definition below defines perfectly elastic demand? • This is a situation in which a change in price will never change a consumer’s decision to buy a certain good. • This is the degree to which demand changes in response to a change of price. • A change in price of one good affects a consumer’s decision to purchase a different good. •  Any change in price always results in a very significant change in demand. Sophia :: Welcome Page 5 of 13 https://capella.sophia.org/spcc/microeconomics-2/milestone_take_feedbacks/5128360 8/10/2020CONCEPT Defining Elasticity 12 Determine which of the following descriptions is true regarding the rational consumer. • Makes decisions based on an unlimited income • Has unlimited resources to consider in making decisions •  Wants to maximize utility • Makes choices that exhibit decreasing utility with the ability to increase consumption CONCEPT Decision Making Relationships: Rational Consumer 13 Which type of market structure has many small firms that spend money in order to differentiate their products through advertising? • Monopoly • Oligopoly •  Monopolistic competition • Perfect competition CONCEPT Monopolistic Competition 14 The additional income a company generates from selling one more unit due to this is called which of the following? •  Output effect Sophia :: Welcome Page 6 of 13 https://capella.sophia.org/spcc/microeconomics-2/milestone_take_feedbacks/5128360 8/10/2020• Diseconomies of scale • Price effect • Break even point CONCEPT Revenue: Total, Marginal and Average 15 Determine which of the following is an example of opportunity cost. • How many times will I be able to wear this shirt before it falls apart or goes out of style? •  If I take a second job, I will have more money, but less time to spend with my family. • With my current salary, I can only afford to spend $500/month on food. • We have a week of vacation. Let's go on a Mexican cruise. CONCEPT Decision Making Relationships: Rational Consumer 16 Which of the following is an intermediate good? • A tractor used by a farmer • pizza sold to a customer in a restaurant • A textbook used by a teacher in a classroom •  Flour used to bake bread in a bakery Sophia :: Welcome Page 7 of 13 https://capella.sophia.org/spcc/microeconomics-2/milestone_take_feedbacks/5128360 8/10/2020CONCEPT Factor Markets 17 Which one of the answers listed is NOT a reason why businesses have been slow to adopt sustainable practices in regard to unemployment? • Businesses might lay off people in order to meet profitability in a given quarter. • Employment levels follow the business cycle. •  Sustainable business practices mean larger profits in the long run. • Sustainable business practices often seem counterintuitive. CONCEPT Assessing Costs of Unemployment--Labor Economics 18 Which of the following corresponds with unemployment insurance claims? • Indicators collected by states for tax purposes • Coincident indicators that lets people know which industries might be hiring • Lagging indicator that firms might use to analyze what labor costs will be in the future •  Leading indicators that firms might use to predict which part of the business cycle an economy is in CONCEPT Key Leading Indicators 19 Sophia :: Welcome Page 8 of 13 https://capella.sophia.org/spcc/microeconomics-2/milestone_take_feedbacks/5128360 8/10/2020Using the graph above, the firm is best served producing at __________. • Point D • Point C •  Point B • Point A CONCEPT Production Function and Constraints 20 Which of the following best describes an indifference curve? • A graph that shows how the price of substitute goods causes a consumer to prefer one bundle of goods over another •  A graph that shows different bundles of goods for which a consumer has equal preference • Sophia :: Welcome Page 9 of 13 https://capella.sophia.org/spcc/microeconomics-2/milestone_take_feedbacks/5128360 8/10/2020A graph that shows the change in demand for a good when the price of its complementary good changes • A graph that shows the change in demand for goods and services when income changes CONCEPT Utility Theory 21 Select the statement that is true about perfect competition. •  Perfect competition is a simplified view of a market. • In perfect competition, firms have the power to set their own prices. • With perfect competition, information is withheld about the market. • There are many real-world examples of perfect competition. CONCEPT Perfect Competition 22 The price at which the consumer purchases the taxed good increases by less than the amount of the tax. Who of the following bears more of the burden of this tax, assuming that demand is more elastic than supply? • Based on the given information, this is unclear • Both consumers and producers would equally share this tax burden • Consumers •  Producers CONCEPT Taxation and Subsidy Sophia :: Welcome Page 10 of 13 https://capella.sophia.org/spcc/microeconomics-2/milestone_take_feedbacks/5128360 8/10/202023 Which of the following best describes externalities? • The result of politicians acting as utility maximizers • The result of information failure and hamper cost-benefit analysis •  Third party costs or benefits that skew the correct market equilibrium • An example of a moral hazard CONCEPT Details on Regulatory Intervention and Market Failure 24 When a firm uses five machines, it can produce 600 units daily. A sixth machine allows the firm to product 880 units. Which of the following is true regarding production? • The marginal product for the fifth machine is 600 and the average product is 120 units. • The marginal production for the sixth machine is 880 units and total production would be 1,480 units. •  The marginal product for the sixth machine is 280 units and the average product is 147 units. • The total production for 11 machines would be 1,480 units with an average production of 164 units. CONCEPT Product: Total, Marginal, Average, and (Marginal) Revenue 25 Sophia :: Welcome Page 11 of 13 https://capella.sophia.org/spcc/microeconomics-2/milestone_take_feedbacks/5128360 8/10/2020Based on this graph, what amount should the company choose to produce to maximize profit? • 0 • 80 •  71 • 49 • 65 CONCEPT Output Optimization: Total Revenue / Total Cost © 2020 SOPHIA Learning, LLC. 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