Answers Test _2 BA 315 Fall 06 Oct 26

Answers Test _2 BA 315 Fall 06 Oct 26 - Name BA 315 Test#2...

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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 Q u a n t i t y ( u n i t s p e r w e e k ) 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 Q u a n t i t y ( u n i t s p e r w e e k ) P 4 P 2 P 1 P r i c e ( p e r u n i t ) M C A T C ( 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.
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