Sample Questions for the Second Midterm Test Six questions that could have been used for the second midterm test are listed below. The answers to the questions are given at the bottom of this file.
1. The PBM Corporation recently entered the perfectly competitive yo-yo industry. It has a one-year lease for its factory that requires it to pay $5 dollars rental each day. The factory can produce up to 10 yo-yos each day. The marginal costs of the ten yo-yos that it can produce in a day are $4, $3, $3, $4, $5, $7, $10, $15, $24 and $40 respectively. Yo-yos sell for $12 each. PBM's maximum daily profit is
2. A profit-maximizing competitive firm has a fixed input. The firm’s entire supply curve is