EXAM 2 form A

EXAM 2 form A - Economics 200 Spring, 2008 M. Stegeman...

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Economics 200 Spring, 2008 M. Stegeman EXAMINATION #2 Form A Instructions: On your opscan form, mark your ID NUMBER, your NAME, and the test FORM. If your ID number begins with “S,” then the “S” should be included and marked as “0" 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. By definition, a firm is competitive if it: (A) Maximizes profits. (B) Has the lowest costs in its market. (C) Has the largest share of its market. (D) Is too small to affect the price of its output. (E) Produces the quantity that minimizes its average costs. 2. Suppose that a new oil discovery affects short-run supply but has a greater effect on long- run supply. Then we expect the price of oil to: (A) Drop sharply at first, but then rise gradually to a new equilibrium. (B) Rise sharply at first, but then drop gradually to a new equilibrium. (C) Drop sharply at first, and then continue to drop gradually to a new equilibrium. (D) Rise sharply at first, and then continue to rise gradually to a new equilibrium. 3. If China announces that it is going to start increasing its stockpile of palladium next year , then what do we immediately expect to happen in the market for palladium? (A) The price will immediately fall. (B) The price will immediately rise. (C) The quantity traded will immediately fall. (D) The quantity traded will immediately rise. (E) Nothing is likely to happen until next year. 4. If supply in a market is perfectly inelastic, then the supply curve: (A) Is vertical. (B) Is horizontal. (C) Never moves. (D) Is vertical and never moves. (E) Is horizontal and never moves.
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The next six questions refer to the diagram at right, which shows the short-run cost curves of a competitive firm that produces copper (measured in tons) and wants to maximize its profits. 5. If the market price is $14, then the quantity that the firm should produce to maximize its profits is closest to: (A) 0. (D) 20. (B) 5. (E) 45. (C) 10. (AB) 60. 6. If the market price is $16, and the firm decides to produce 10 tons, then its profit lies in what range? (A) <$30. (D) $100-$179. (B) $30-$59. (E) $180-$249. (C) $60-$99. (AB) >$249. 7. If the market price is $16, and the firm decides to produce 10 tons, then its cost lies in what range? (A) <$30. (D) $100-$179. (B) $30-$59. (E) $180-$249. (C)
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EXAM 2 form A - Economics 200 Spring, 2008 M. Stegeman...

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