L1 R12 TDSA Test-1

The market demand function for branded clothes is given by the equation:
QDB = 91.70 – 0.7 (PB) + 0.03 (I) + 1.3 (PUB)
Where QDB is the number of branded clothes purchased per month (in thousand USD), PB is the average price of a branded cloth (in USD), I is the household monthly income (in thousand USD) and PUB is the average price of an unbranded cloth (in USD). The price of a branded cloth is USD20, monthly income of a family is USD70,000, and the price of an unbranded cloth is USD15.

The cross elasticity of demand for branded cloth is closest to:

Two analysts made the following comments about labor productivity.
Analyst 1: Labor productivity is calculated by dividing total labor employed by total output.
Analyst 2: Marginal labor productivity is the most useful measure for analyzing the labor productivity as it considers addition to total product from increasing one more unit of labor.
Which analyst is most likely correct?

The current price of a product is\$10 and the current demand is 10 units. When the price changes to \$7, the quantity demanded increases to 15 units. The price elasticity of demand for the product is:

The Production Manager of a manufacturing company has gathered the following information:

The level of labor at which the average product of labor is highest is closest to:​

The market demand function for branded clothes is given by the equation:
QDB = 91.70 – 0.7(PB) + 0.3(I)
where QDB is the number of branded clothes purchased per month (in thousand USD), PB is the average price of a branded cloth (in USD) and I is the household monthly income (in thousand USD). Assume that PB is equal to 20 and I is equal to 30. Assume the price is not given, the demand function and the inverse demand function are:

A firm plans to expand production by 500 units. The marginal product per day for one additional unskilled laborer is 250 units and one additional skilled worker is 500 units. Wages per day are £150 for an unskilled labor and £280 for a skilled worker. The firm should hire:

A high school student’s monthly demand for burgers is given by the equation:

If the student’s monthly food budget is USD1,000, the price of a burger is USD8 and the price of Pepsi is USD1.75 per bottle, then the slope of the demand curve is closest to:

An analyst makes following comments about shifts and movements along the demand curve.
Statement 1: Movement along the demand curve occurs due to a change in the price of a substitute product.
Statement 2: Demand curve shifts as a result of a change in product’s own price.
Which of the following is most likely true?

The market demand function for item A is a function of its price, household income, and the price of item B. The market demand function for item A is a function of its price, household income, and the price of item B.

Based on the data given above, which of the following statements is most accurate?

If a person’s income increases from \$1,000 to \$2,000, then his demand for an inferior good will most likely:

Grey left his job, where he was making USD35,000 per annum, to start his own business with an initial investment of USD70,000. He had an option to invest this amount in a friend’s business, where he would have earned USD43,000 per annum. Profit and loss statement for first year of Grey’s business is given below.

What is the economic profit for Grey’s business in the first year?

The sales manager of a British medical equipment manufacturer estimates that the firm can sell 1,000 units of BP monitor and earn a total revenue of GBP 4,000,000. However, if 1,250 units are sold, the total revenue will be GBP 4,800,000. The marginal revenue per unit for selling 1,250 units of BP monitor instead of 1,000 units is closest to:

Healthpro Inc. produces health supplements. Total fixed and variable costs of the company are \$250,000 and \$260,000 respectively. Total fixed cost is constant up to a certain range, but can change to another constant level when production moves outside of that range. This type of fixed cost is termed as:

Newage Inc. is operating in a perfectly competitive market. The average variable cost (AVC) for the firm is $33, average total cost (ATC) is \$45 and average revenue (AR) is \$38. The firm should:

Under perfect competition, which of the following statements regarding the breakeven point is least accurate? The breakeven point is the quantity where:

When total revenue is less than total variable costs, the company will most likely:

An analyst makes the following statements:
Statement 1: Profit maximization can be identified with two methods. When MR = MC or when the difference of TR and TC is maximum.
Statement 2: Profit maximization can be identified with only one method. Profit is maximized when difference of TR and TC is maximized.
Which statement is least likely correct ?

The output of Abel Inc. increases by a larger percentage than the increase in inputs. Abel is most likely experiencing:

The market demand function for branded clothes is given by the equation:
QDB = 91.70 – 0.7 (PB) + 0.03 (I) + 1.3 (PUB)
Where QDB is the number of branded clothes purchased per month (in thousands USD), PB is the average price of a branded cloth (in USD), I is the household monthly income (in thousand USD) and PUB is the average price of an unbranded cloth (in USD). The price of a branded cloth is \$20, monthly income of a family is \$70,000, and the price of an unbranded cloth is \$15. The income elasticity of demand for branded clothes is closest to:

In the short run, auto industry is earning positive economic profit. As a result, firms increased their scale of production to earn higher profits. What will be the most likely effect?