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Unformatted text preview: Name:_________________ Favorite Ice cream:____________ BA 315: Test #2, Fall 06 Lundquist College of Business University of Oregon Ali Emami Please answer all questions. Do not talk during the test or use someone else’s paper or calculator as assistance this can result in a zero and a failing grade in the class. 1. Obstacles that make it difficult or impossible for additional producers to begin producing or selling in a new market are referred to as: A) Barriers to exit. B) Barriers to entry. C) Barriers to competition. D) Blockades to exit. Use the following to answer question 2: Figure 6.1 In Figure 6.1, graph (a) presents the cost curves that are relevant to a firm’s production decision, and graph (b) shows the market-demand and market-supply curves for the calculator market. Q A Q B Q C Q D P 4 P 2 P 1 Quantity (units per week) P r i c e ( p e r u n i t ) D 1 D 2 D 3 D 4 S Q 1 Q 2 Q 3 Q 4 Quantity (units per week) P 4 P 2 P 1 P r i c e ( p e r u n i t ) MC ATC (a) (b) 2. In the long run equilibrium in Figure 6.1: A) Firms will enter the market. B) The firm will produce the quantity at which MC = P . C) Total revenue exceeds average total cost. D) Firms will exit from the market. 3. If economic profits are earned in a competitive market, in the long run: A) More firms will enter the market. B) The market-supply curve will shift to the left. C) Equilibrium market price will increase....
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This test prep was uploaded on 04/22/2008 for the course ECON 315 taught by Professor Aliemami during the Spring '08 term at Oregon.
- Spring '08