answer3 - BUAD 351 Economic Analysis for Business Decisions...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
BUAD 351 - Economic Analysis for Business Decisions Homework 3 due: Thu 03/05/2009 PART (i): multiple choice question 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 answer b b c d d d c d d d d c c a b PART (ii): Shorter questions For each of the following statements, state whether they are true or not and brie°y explain why 1. The short-run supply curve of a ±rm operating in a competitive industry is always upward-sloping True. The short-run supply is SMC above SAVC. If MC were decreasing for P = MC; the ±rm could increase its pro±ts by producing more output 2. The long-run supply curve of a ±rm is the portion of the long-run marginal cost curve above the average variable cost curve False. In the long-run, the ±rm needs to cover all its costs of production and the supply is LMC above LATC. 3. If the marginal cost of production is below the average variable cost, then the average vari- able cost is decreasing True. Marginal cost measures the incremental contribution of the last unit to the overall cost of production. If it is lower than the average cost, it will bring the average cost down. 4. By purchasing a coal plant, an electric company is able to lower its costs of production be- cause it doesn²t need to pay the market price for the coal by producing the coal itself.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern