# What is the average product of capital when 2 units of capital and 10 units of labor are employed?

1. The costs of production do NOT include: a. Wages b. The Opportunity costs forgone by producing a given product c. Costs of Purchase Capital d. All of the above are costs of production 2. If the cross-price elasticity between ketchup and hamburgers is ?1.5, a 2 percent decrease in the price of ketchup will lead to a: a. 3% increase in quantity demanded of ketchup b. 3% decrease in quantity demanded of ketchup c. 3% increase in quantity demanded of hamburgers d. 3% decrease in quantity demanded of ketchup 3. An excise tax of \$2.00 per pound of sugar placed on the suppliers of sugar would shift the supply curve: a. Down by 20% b. Down by more than \$2.00 c. Up by \$2.00 d. Up by less than \$2.00 4. Suppose the production function is given by Q = 10K + 8L. What is the average product of capital when 2 units of capital and 10 units of labor are employed? a. 10 b. 8 c. 50 d. 18 5. Suppose market demand and supply are given by Qd = 100 – 2P and QS = –50 + 3P. The equilibrium quantity is: a. 40 b. 20 c. 30 d. 50 6. The main reason firms may exit a market is because of: a. The lack of economic profits b. Decreased technology c. Expensive labor d. High capital costs