1. A carpenter currently produces 10 custom cabinets per week and sells them for a profit. He is considering expanding his operation in order to make more cabinets. Should he expand? Pick one below:

IT DEPENDS ON THE AVERAGE COST OF PRODUCING MORE CABINETS AND THE AVERAGE REVENUE HE WILL EARN FROM SELLING MORE CABINETS.

IT DEPENDS ON THE MARGINAL COST OF PRODUCING MORE CABINETS AND THE MARGINAL REVENUE HE WILL EARN FROM SELLING MORE CABINETS.

YES, BECAUSE MAKING CABINETS IS PROFITABLE.

NO, BECAUSE HE MAY NOT BE ABLE TO SELL THE ADDITIONAL CABINETS.

1. Complete the following table on your own paper.

Table T

Exam 1 Table T.png

The marginal benefit of the fourth unit of the activity is:

A. 60

B. 55

C. 50

D. 65

1. Complete the following table on your own paper.
   Table T

Exam 1 Table T-1.png

The optimal level of activity is:

A. 2

B. 4

C. 3

D. 1

1. Complete the following table on your own paper.

Table T

Exam 1 Table T-2.png

The total cost of the second unit of activity is:

A. 230

B. 70

C. 40

D. 300