Economics

Sellers and Incentives SR

Dept. of Economics @ NCKU

Weng, Ming-Hung
 Q1
Jeremy originally worked at a bank with a monthly salary
of $45,000. He decided to quit his job and open a
bookstore. His monthly expenses includes $20,000 for
rent, $42,000 for employees wages, and $8,000 for
utilities and other expenses. Suppose Jeremy sells 600
books at the price of $200 every month. How much
economic profit does Jeremy make every month?
1. $120,000
2. $50,000
3. $5,000
4. $-45,000
 Q2
The rent payment for the shop in the SR is
considered as
1. fixed cost
2. variable cost
 Q3
If the firms marginal cost (MC) for the next
unit of output is lower than current average
cost (AC), the firms AC will ___ if the next
unit is produced
1. increase
2. decrease
3. remain unchanged
4. be equal to MC
 Q4
You currently produce 100 units. Suppose the
MC of your 101th unit is $15 and the market
price remains at $10. If the 101th unit is
produced, you profit will
1. Go up
2. Go down
3. Remain unchanged
4. Either go up or down
 Q5
If the market price is $4, the firms optimal
level of output is approximately
1. 0
2. 250
3. 440
4. 570
5. 650

250 440 570 650

 Q6
If the market price is $2, the firms optimal
level of output is approximately
1. 0
2. 180 (A)
3. 250 (B)
4. 400 (C)