Midterm Test for Economic Thinking

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  • Topic: Costs, Supply and demand, Economics
  • Pages : 24 (2315 words )
  • Download(s) : 184
  • Published : January 20, 2013
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• Question 1
2 out of 2 points
| | | |[pic] |In making a decision about whether to increase its advertising budget the firm management should not consider | | | | | | | | | | | | | | | | | |Answer | | | | | |Selected Answer: | | | | | |[pic]    | | | | | |interest payments on the firm's loan. | | | | | | | | | |

• Question 2
2 out of 2 points
| | | |[pic] |A clinic uses doctors and nurses to serve the maximum number of patients given a limited annual payroll. The clinic currently | | | | | |has 10 doctors and 30 nurses. The last doctor hired can serve 300 additional patients, while the last nurse hired can serve 200 | | | | | |additional patients. If doctors make $60,000 a year and nurses make $20,000 a year, the clinic | | | | | |Answer | | | | | |Selected Answer: | | | | | |[pic] d.   | | | | | |could serve more patients with the same payroll by hiring more nurses and fewer doctors. | | | | | | | | | |

• Question 3
2 out of 2 points
| | | |[pic] |A restaurant currently has two cooks and ten waiters. Cooks earn $10 an hour and waiters earn $5 an hour. The last cook added 40| | | | | |meals served to total output, while the last waiter added 25 meals served to total output. In order to maximize the number of | | | | | |meals served with a fixed budget, the manager should | | | | | | | | | | | | | | | | | |Answer | | | | | |Selected Answer: | | | | | |[pic] d.  ...
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