Beef Producers Association

Can anyone help with some Micro Economics questions?

Hi, I have a couple questions I can’t figure out. If you can only answer one, please help me out.

1).Which of the following will cause a decrease in the demand for tennis racquets?
A. A rise in the price of squash racquet
B. A rise in the price of tennis racquets
C. A rise in the price of tennis balls
D. A fall in the price of tennis shoes

I think its either B or C, tennis balls are a complementary good, and if the price of them increases, the demand for tennis racquets will decrease. but if the prices of tennis racquets increase, wouldn’t that also cause a decrease in demand?

2)Economic costs.
A) include both a normal rate of return on investment and the opportunity cost of each factor of
production.
B) are equal to the direct costs of hiring all factors of production.
C) are equal to total revenue minus accounting profit.
D) are the opportunity cost of each factor of production minus any interest charges paid on
borrowed funds.

3)Which of the following is most likely to be a variable cost for a firm?
A). The payroll taxes that are paid on employee wages
B). The franchiser’s fee that a restaurant must pay to the national restaurant chain
C). The monthly rent on office space that it leased for a year
D). The interest payments, made on loans

4) Assume Dell Computer Company operates in a perfectly competitive market producing 5,000 computers per day. At this output level, marginal cost exceeds this firm’s price. To maximize profits, Dell should
A) stop producing since it is earning a loss.
B) make no adjustments as they are already maximizing their profits. ‘
C)decrease their output.
D) increase their output.

5)You are hired as an economic consultant to The Pampered Pet Shop. The Pampered Pet Shop operates in a perfectly competitive industry. This firm is currently producing at a point where market price equals its marginal cost. The Shop’s total revenue exceeds its total variable cost, but is less than its total cost. You should advise the firm to
A) lower its price so that it can sell more units of output.
B) cease production immediately because it is incurring a loss.
C) produce in the short run to minimize its loss, but exit the industry in the long run.
D) raise its price until it breaks even.

6)As long as economic profits are being earned in an industry, firms will______the industry and the supply curve will shift to the________.
A) enter; rightB) enter; leftC) exit; rightD) exit; left

7)Assume the market for beef is perfectly competitive. Beef producers are currently earning a zero economic profit. If consumers switch from beef to chicken, which of the following is most likely to occur?
A) Beef producers will incur economic losses in the short run. Some producers will exit the industry
until those remaining are earning a zero economic profit.
B) Beef producers will incur economic losses in the short run. Some producers will exit the industry
until those remaining are earning an economic profit.
C) Beef producers will now earn economic profits in the short run and there will be no additional
adjustments in the long run.
D) Beef producers will now incur economic losses in both the short run and the long run.

8)An economist has estimated that the maintenance of a public park costs $25,000 a year and that the public park generates $30,000 a year in revenue for merchants near the park. From society’s point of view, the maintenance of this park is
A) inefficient because the additional revenues generated by the park are so low.
B) potentially efficient because no one would be made worse off as a result of maintaining the park.
C) potentially efficient because the value of the gains exceed the value of the costs.
D) inefficient, because everyone in the community pays taxes to support the park, but only the
merchants near the park benefit.

9)You value your iPod at $110. Someone else values it at $150, and that person is willing to pay you $120 for your iPod. Would selling your iPod to this person for $120 be a Pareto improvement?
A) Yes, because even though you gain from the trade and he loses, there is the potential for you to compensate him for his loss.
B) No, the person paid you $120 for the iPod so his net benefit was $30, while your net benefit was $10. For this change to be Pareto efficient, each of you should have the same net benefit.
C) No, because you did not receive the maximum amount the other person would have been willing to pay for the iPod.
D) Yes, because both of you are better off as a result of the trade.

IF you can help on anyone of them that would be great, especially if you can tell me WHY the answers are correct! thanks!

ok i’m not going to answer all of these

1. there is a negative relationship btwn demand and price ie price rises, demand falls, price falls demand increases. so increasing the price of tennis rackets will reduce demand

i’m not doing the rest of your homework for ya!