EXAM 1 form a-1 - Economics 200 Spring, 2008 M. Stegeman...

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Economics 200 Spring, 2008 M. Stegeman EXAMINATION #1 Form A Instructions: On your opscan form, mark your ID NUMBER, your NAME, and the test FORM. Also, write your assigned SEAT NUMBER (e.g. Left G2) in the blank space provided for your phone number. (We don’t want your phone number.) Since a wrong answer has the same impact on your score as no answer, you should answer every question. You may keep the question sheet, but TURN IN THE MAP with your scantron and SIGN IT. If you have any questions, ask now, not after the exam is over! There are 40 questions and 3 bonus questions. Each question is worth 2.5 points. 1. If someone tells you of a business opportunity that requires no special skills and will allow you to make easy money without doing too much work, an economist’s typical reaction is: (A) Where do I sign up? (B) Don’t take it, because it is nicer to leave it for someone who needs it more. (C) Don’t take it, because it is unethical to get money that you didn’t earn by working hard. (D) The easy money probably doesn’t exist, because someone else has already taken it or countless other people will be fighting you for it. 2. What would cause a firm’s marginal revenue curve to change its position? (i) A change in the firms’ costs. (ii) A change in the demand for the firm’s product. (A) (i) only. (B) (ii) only. (C) Both (i) and (ii). (D) Neither (i) nor (ii). 3. For most firms, short run costs are ______ than long run costs at small quantities of output, and short run costs are ______ than long run costs at large quantities of output. (A) Lower; lower. (B) Lower; higher. (C) Higher; lower. (D) Higher; higher.
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The next six questions refer to the diagram at right, which shows a firm’s demand curve. 4. This demand curve ______ satisfy the Law of Demand. (A) Does (B) Does not. 5. If the firm sets a price of $2, then its revenue is closest to: (A) $9. (E) $18. (B) $11. (AB) $28. (C) $14. (AC) $31. (D) $16 (AD) $84. 6. What is the marginal revenue from the third unit of output? (A) ! $6. (E) $2. (B) ! $4. (AB) $6. (C) ! $3. (AC) $24. (D) ! $1. (AD) $30. 7. Suppose that the firm sells Q=4 units of output. If its average cost is $2 per unit, then the firm’s profits are closest to: (A) $5. (E) $25. (B) $10. (AB) $30. (C) $15. (AC) $35. (D) $20. (AD) $40. 8. At the point on the demand curve where the firm produces seven units, the elasticity of demand is closest to: (A) ! 1/4. (E) ! 3 1/2. (B) ! 1/2. (AB) ! 4. (C) ! 1. (AC) ! 7. (D) ! 2. (AD) ! 14. 9. Suppose that the firm decides to sell four units, while keeping the price at $10 each. What is wrong with this plan? (A) The firm will earn negative profits. (B) The firm’s average cost would exceed its price. (C)
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This note was uploaded on 01/31/2009 for the course ECON 200 taught by Professor Cramer during the Spring '07 term at University of Arizona- Tucson.

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EXAM 1 form a-1 - Economics 200 Spring, 2008 M. Stegeman...

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