Question

10. The annual rental rate for a machine is

a) the yearly depreciation and maintenance costs for the machine.

b) the yearly interest costs associated with owning the machine

c) the initial purchase price of the machine divided by the number of years the machine is expected to last.

d) the sum of the yearly depreciation, maintenance, and interest costs associated with owning the machine

14. In the short run, an increase in market demand will usually lead to a(n)

1. decrease in price and an increase in quantity.
2. decrease in price and a decrease in quantity.
3. increase in price and an increase in quantity.
4. increase in price and a decrease in quantity.

15. A demand curve will shift out for any of the following reasons except

1. preference for a good increases.
2. price of a substitute falls.
3. income rises.
4. price of a complement falls.

19. Positive economic profits exist for a firm in the long run if price is above

1. long-run average cost.
2. long-run marginal cost.
3. long-run total cost.
4. long-run variable cost.

Answer 1

10. The annual rental rate for a machine is the sum of the yearly depreciation, maintenance, and interest costs associated with owning the machine.

Answer: option D

14. In the short run, an increase in the market demand that shifts the demand curve rightward, will lead to an increase in the price and an increase in Quantity.

Answer: option C

15. Decrease in price of substitute good, increases Quantity demanded for that substitute good and decreases demand(because substitute good means goods that can be used in place of the other) for the good who's substitute Good's price has decreased.

Answer: option B

19. Positive economic profit exists in Long run if long run price is above long run average cost at the profit maximizing output level.

Answer: A