Exam 9: Decision Making by Individuals and Firms

Use the following to answer question: -(Table: TC's Pizza Parlor)Use Table: TC's Pizza Parlor.Assume that marginal cost is constant in the intervals of production.The marginal cost for pizza production:

In general,when marginal benefit is greater than marginal cost,the decision maker should do _____ of the activity.

The willingness to sacrifice some economic payoff to avoid a potential loss is:

Accountants use only _____ costs in their computations of short-run total cost.

If the accounting profit for a firm is negative,the:

If the marginal cost of any activity is constant at $4,then at the optimal quantity of the activity,the marginal benefit will be $4.

As George ate pizza during one recent outing,he found that he enjoyed each additional slice less and less.This implies that his marginal benefit was:

Suppose Bob has a part-time business washing cars.He has washed nine cars on a given day;the marginal benefit of washing the tenth car is $20 and the marginal cost is $12.Bob should:

A person with loss aversion:

Mary goes ahead and buys a new car because she expects to receive a 10% increase in her salary next year.What type of behavior does this BEST represent?

Costs that are included in the economic concept of cost but that are NOT explicit costs are:

Profit computed without implicit costs is _____ profit.

Expenses associated with factors of production may be _____ costs.

An "either-or" decision entails:

Marginal analysis should be used in "either-or" decisions.

Lucy bought some stock 10 years ago that has been priced at half of her purchase price for the past 5 years.However,Lucy refuses to sell the stock,thinking that,if she waits long enough,she will recover her investment.What type of behavior does this represent?

Use the following to answer question: -(Figure: The Marginal Benefit Curve)Use Figure: The Marginal Benefit Curve.The total benefit of mowing six lawns is approximately:

The _____ benefit is the amount by which an additional unit of an activity increases its total benefit.

If the marginal benefit received from consuming a good is equal to the marginal cost of production:

Use the following to answer question: -(Table: Marginal Benefit of Sweatshirts)Use Table: Marginal Benefit of Sweatshirts.The marginal benefit of producing the second sweatshirt is: