Question Question 1 Framjam Sports Equipment produces basketballs at

Question 1
Framjam Sports Equipment produces basketballs at its factory in Kentucky and soccer balls at its factory in Illinois. At its current annual rate of production, the cost of producing soccer balls is $75,000 and the cost of producing basketballs is $35,000. If the firm consolidates production at a single location, the annual cost of production will be $100,000. What is the degree of economies of scope in this case?
Select one:
A. 4
B. 5
C. 0.90
D. 0.10
E. 1.15
Question 2
Trudeau’s Body Shop incurs total costs given by TC = 2,400 + 100Q. If the price it charges for a paint job is $120, what is its break-even level of output?
Select one:
A. 20 paint jobs
B. 40 paint jobs
C. 60 paint jobs
D. 90 paint jobs
E. 120 paint jobs
Question 3
N

In the above figure, if price is equal to P1, the firm will
Select one:
A. shut down.
B. earn positive economic profits.
C. incur an economic loss.
D. earn zero economic profits.

Question 4
The per-week demand for use of the Golden Gate Bridge in San Francisco is P = 13 – 0.15Q during peak traffic periods and P = 10 – 0.1Q during off-peak hours, where Q is the number of cars crossing the bridge in thousands and P is the toll in dollars. If the marginal congestion cost of using the bridge is MC = 5 + 0.2Q, what is the optimal peak load toll for crossing the bridge?
Select one:
A. 6.5
B. 8.0

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