ECONOMICS
July 278 MG 640 Final PART I 2016 (1)

July 278 MG 640 Final PART I 2016 (1) - 1 MG 640 Managerial...

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1 MG 640 Managerial Economics July 2016 Final Exam Name: (Last) …………………………………… (First) ……………………………………….. PART I : Problem/Discussion 1 a) What is a business cycle? With an aid of a graph, identify the phases of the business cycle _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ b) Why would economist expect unemployment to fall during an economy’s expansionary phrase and to rise during a contractionary phrase? Discuss and make reference to the business cycle . _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ Dr. D Rawana Page 1
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2 2 a) What is meant by real gross domestic product (RGDP)? __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ b) Does GDP measure only the final goods and services produced rather than all goods and services produced? If true explain; if false explain _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ 3 a) What is meant by the economy’s aggregate demand curve(AD)? __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ b) Does the AD always downward sloping? Discuss and use graphs where necessary. _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ Dr. D Rawana Page 2
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3 4 Complete Table below for a) Total Cost (TC) b) Average variable cost (AVC) Q FC VC TC AVC 0 100 0 10 100 350 50 100 700 90 100 1050 125 100 1400 145 100 1750 160 100 2100 5 Use Table above and answer the following questions A. What is the total cost of producing 145 units of output a. 100 c. 1850 b. 1750 d. 1650 Show your work? B. What is the average variable cost of producing 10 units of output? a. 10 c. 35 b. 250 d. 100 Show your work? C. What is the average total cost of producing 50 units of output? a. 2.0 c. 14 b. 16 d. 12 Show your work? Dr. D Rawana Page 3
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4 6 The table below summarizes the short-run production function for your firm. Your product sells for $20 per unit, labor costs $10 per unit, and rental price of capital is $5 per unit.
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