Study Questions: Finance and Economics
The table given below represents the marginal valuation of a beekeeper (collecting honey) and an orchard farmer (producing mangoes). The beekeeper’s opportunity cost reflects the loss in honey collection resulting from the usage of the same orchard again and again.
Table 1
Days used Total honey value ($) Marginal honey value ($) Beekeeper's opportunity cost ($) Total value of mangoes ($) Marginal value of mangoes ($)
1 18 18 2 10 10
2 23 6 2 17 7
3 27 5 2 23 6
4 30 3 2 28 5
5 32 2 2 32 4
6 33 1 2 30 2
7 34 1 2 29 1
1. Refer to Table 1. What will be the maximum number of days for which the beekeeper would like to stay in the orchard without being compensated for his stay by the orchard owner?
a. 1 day
b. 6 days
c. 3 days
d. 5 days
ANS: D PTS: 1 DIF: Medium NAT: Analytic
2. Refer to Table 1. What will be the maximum number of days for which the orchard owner would prefer the beekeeper to stay in his orchard without having to pay any compensation?
a. 3 days
b. 6 days
c. 1 day
d. 5 days
ANS: B and D!!! PTS: 1 DIF: Medium NAT: Analytic
3. Refer to Table 1. What would be the maximum number of days for which the orchard owner would wish to keep the beekeeper in the orchard by paying him a compensation which is sufficient to cover the latter’s opportunity cost?
a. 5 days
b. 7 days
c. More than 7 days
d. 6 days
ANS: A and D!!! PTS: 1 DIF: Medium NAT: Analytic
4. Which of the following is an example of a possessory property right?
a. The right to use a public park for morning walk.
b. The right to park your car in your garage.
c. The right to enjoy the fragrance of the flowers planted in your neighborhood.
d. The right to travel in public transport.
ANS: B PTS: 1 DIF: Medium NAT: Reflective Thinking
5. Escalators present in a contract must state:
a. at what interval the contract price should automatically change at a fixed rate.
b. when the price will change and by what formula the new price will
Table 1
Days used Total honey value ($) Marginal honey value ($) Beekeeper's opportunity cost ($) Total value of mangoes ($) Marginal value of mangoes ($)
1 18 18 2 10 10
2 23 6 2 17 7
3 27 5 2 23 6
4 30 3 2 28 5
5 32 2 2 32 4
6 33 1 2 30 2
7 34 1 2 29 1
1. Refer to Table 1. What will be the maximum number of days for which the beekeeper would like to stay in the orchard without being compensated for his stay by the orchard owner?
a. 1 day
b. 6 days
c. 3 days
d. 5 days
ANS: D PTS: 1 DIF: Medium NAT: Analytic
2. Refer to Table 1. What will be the maximum number of days for which the orchard owner would prefer the beekeeper to stay in his orchard without having to pay any compensation?
a. 3 days
b. 6 days
c. 1 day
d. 5 days
ANS: B and D!!! PTS: 1 DIF: Medium NAT: Analytic
3. Refer to Table 1. What would be the maximum number of days for which the orchard owner would wish to keep the beekeeper in the orchard by paying him a compensation which is sufficient to cover the latter’s opportunity cost?
a. 5 days
b. 7 days
c. More than 7 days
d. 6 days
ANS: A and D!!! PTS: 1 DIF: Medium NAT: Analytic
4. Which of the following is an example of a possessory property right?
a. The right to use a public park for morning walk.
b. The right to park your car in your garage.
c. The right to enjoy the fragrance of the flowers planted in your neighborhood.
d. The right to travel in public transport.
ANS: B PTS: 1 DIF: Medium NAT: Reflective Thinking
5. Escalators present in a contract must state:
a. at what interval the contract price should automatically change at a fixed rate.
b. when the price will change and by what formula the new price will