Eco 2306 Practice Quiz 2

Eco 2306 Practice Quiz 2 - Eco 2306 Practice Quiz 2 1. In...

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Eco 2306 Practice Quiz 2 1. In the graph above, when the demand is P2=$15, this firm should ____________. A. continue to operate in the short run and think about shutting down in the long run B. discontinue operation in the short run since there is a loss when operating C. keep operating as long as loss is not greater than total cost D. discontinue operation in the short run since AVC is greater than price E. discontinue operation in the short run since ATC is greater than price 2. Using the graph at the top of the page, when demand is P1=$30, what is the total cost? A. $960 B. $1200 C. $1600 D. $2500 E. $3000 Workers per day Pizza per day Fixed Cost Variable Cost 0 0 500 0 1 25 500 200 2 75 500 350 3 150 500 450 4 200 500 600 5 205 500 800 3. The pizza shop earns a _______ of ________ when it uses 3 workers per day. A. loss; $550 B. profit; $550
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C. loss; $950 D. profit; $950 E. profit; $1500 4. When the pizza shop employs 5 workers per day, it will experience a MC of ____ per pizza. A. $200 B. $160 C. $40 D. $4 E. $3.90 5. If a firm is experiencing diminishing marginal returns to a variable input, you might guess that A. MC is declining B. MC is increasing C. AVC is constant D. AFC in increasing E. the firm is failing to choose an optimal level of output
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This note was uploaded on 04/30/2008 for the course ECO 2306 taught by Professor Mencken during the Fall '07 term at Baylor.

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Eco 2306 Practice Quiz 2 - Eco 2306 Practice Quiz 2 1. In...

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