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Exam3Review

# Exam3Review - Name Exam 3 Review 14 15 16 and 17 Multiple...

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Name: ________________________ 1 Exam 3 Review (Chapters 12, 13, 14, 15, 16, and 17) Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. Tax incidence refers to a. what product or service the tax is levied on. b. who bears the tax burden. c. what sector of the economy is most affected by the tax. d. the dollar value of the tax revenues. ____ 2. You are trying to design a tax system that will simultaneously achieve both of the following goals: 1) two people with the same total income would pay taxes of the same amount, and 2) a high-income person would pay a higher fraction of income in taxes than a low-income person. Which of the following tax systems could achieve both goals? ____ 3. Which of the following is the best example of a variable cost? ____ 4. Miller Technologies has average variable costs of \$1 and average total costs of \$3 when it produces 500 units of output. The firm's total fixed costs equal ____ 5. The fundamental reason that marginal cost eventually rises as output increases is because of a. economies of scale. b. diseconomies of scale. c. diminishing marginal product. d. rising average fixed cost.

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2 Table 1 Quantity Price 1 13 2 13 3 13 4 13 5 13 6 13 7 13 8 13 9 13 ____ 6. Refer to Table 1 . The price and quantity relationship in the table is most likely that faced by a firm in a ____ 7. If a competitive firm is currently producing a level of output at which marginal revenue exceeds marginal cost, then Scenario 1 Assume a certain firm is producing Q = 1,000 units of output. At Q = 1,000, the firm's marginal cost equals \$15 and its average total cost equals \$11. The firm sells its output for \$12 per unit. ____ 8. Refer to Scenario 1 . At Q = 1,000, the firm's profit amounts to ____
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