ECO – The costs of production do NOT include

1. The costs of production do NOT include:a. Wagesb. The Opportunity costs forgone by producing a given productc. Costs of Purchase Capitald. All of the above are costs of production2. If the cross-price elasticity between ketchup and hamburgers is 1.5, a 2 percent decrease in the price ofketchup will lead to a:a. 3% increase in quantity demanded of ketchupb. 3% decrease in quantity demanded of ketchupc. 3% increase in quantity demanded of hamburgersd. 3% decrease in quantity demanded of ketchup3. 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 $2.00c. Up by $2.00d. Up by less than $2.004. Suppose the production function is given by Q = 10K + 8L. What is the average product of capital when units of capital and 10 units of labor are employed?a. 10b. 8c. 50d. 185. Suppose market demand and supply are given by Qd = 100 2P and QS = 50 + 3P. The equilibriumquantity is:a. 40b. 20c. 30d. 506. The main reason firms may exit a market is because of:a. The lack of economic profitsb. Decreased technologyc. Expensive labord. High capital costs7. Which of the following is an implicit cost to a firm that produces shoes?a. Wages paid to workers making the shoesb. Costs of operating production machineryc. Foregone profits of producing shirtsd. Cost of renting the shoe factory8. Larger firms produce a product at larger average cost than small firms when:a. Economies of scope existb. Diseconomies of scale existc. Economies of scale existd. Cost complementarities exist