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hw4 - BUAD 351 Economic Analysis for Business Decisions...

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BUAD 351 - Economic Analysis for Business Decisions Homework 4 due: Thu 03/26/2009 PART (i): multiple choice please provide the answers in the following box: question answer 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1. In long-run equilibrium with free entry: a. the equilibrium price must equal the minimum average total cost. b. pro°t is equal to zero. c. each active °rm must produce at its e¢ cient scale of production . d. All of the above 2. If an individual °rm supply function is Q = 2+3P, and there are 5 °rms, then the market supply function is: a. Q = 2+3P b. 5Q = 2+3P c. Q = 10 + 15P 3. Aggregate surplus is equal to good. 4. When aggregate surplus is maximized, deadweight loss is 5. The Second Welfare Theorem states that e¢ ciency and equity. initial allocation of resources. 1
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