Midterm 2

Midterm 2 - MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question 1 Ingas graph of her budget line

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Inga ʹ s graph of her budget line has apples per week on the vertical axis and loaves of bread per week on the horizontal. A fall in the price of an apple shifts the A) vertical intercept upward. B) horizontal intercept rightward. C) horizontal intercept leftward. D) vertical intercept downward. 2) On a diagram showing indifference curves, the marginal rate of substitution is represented by the magnitude of A) an area. B) a point on the horizontal axis. C) a point on the vertical axis. D) a slope. 3) The short run is defined as A) the period of time during which some resources used by the firm are fixed in quantity. B) less than one year. C) the period of time during which some resources used by the firm are fixed in price. D) all of the above 4) In the long run, A) all inputs can be varied. B) output is fixed. C) some inputs are variable and other inputs are fixed. D) all inputs are fixed. 5) As output increases, AVC approaches ATC because of A) diseconomies of scale. B) diminishing marginal returns. C) increasing marginal cost. D) decreasing average fixed cost. Pizza Hut Labor (workers) Total product (pizzas produced per hour) 00 15 29 31 2 41 4 51 5 6) Using the data in the above table, what is the marginal product of the third employee? A) 2 pizzas per hour B) 4 pizzas per hour C) 3 pizzas per hour D) 12 pizzas per hour 7) Using the data in the above table, what is the average product of three employees? A) 12 pizzas per hour B) 2 pizzas per hour C) 4 pizzas per hour D) 3 pizzas per hour 1
Background image of page 1

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

View Full DocumentRight Arrow Icon
8) Gateway Computer Company increases the quantity of all its inputs by 10 percent and it produces 10 percent more computers. Hence Gateway definitely has experienced A) increasing marginal returns. B) constant returns to scale. C) diseconomies and economies of scale. D) constant marginal returns. 9) In the figure above, an increase in income would result in the budget line A) making a parallel shift toward point a .B ) becoming flatter. C) making a parallel shift toward point c .D ) becoming steeper. 2
Background image of page 2
10) In the above figure, economies of scale are present up to an output level of A) 13,000 pounds of coffee. B) 5,000 pounds of coffee. C) 10,000 pounds of coffee. D) 15,000 pounds of coffee. 11) An indifference curve shows A) different combinations of two goods among which the consumer is indifferent. B) the opportunity cost of one good relative to another. C) affordable combinations of goods. D) consumption possibilities that a consumer faces at different prices and income. 12) Marginal cost eventually increases because A) the marginal product of the variable input eventually falls. B) eventually each additional worker produces a successively smaller addition to output.
Background image of page 3

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

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/02/2008 for the course ECON 1 taught by Professor Tang during the Fall '08 term at UCSD.

Page1 / 12

Midterm 2 - MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question 1 Ingas graph of her budget line

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online