MICROECONOMICSEXAM#3

MICROECONOMICSEXAM#3 - MICROECONOMICS EXAM#3 NAME Multiple Choice Identify the choice that best completes the statement or answers the question 1 a

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MICROECONOMICS EXAM #3 NAME_____________________ Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. A variable cost is one that changes a. in the long run only b. in the short run only c. year to year d. month to month e. as output changes ____ 2. For a person who owns and operates a chocolate chip cookie factory, property taxes are a __________ and chocolate chips are a __________. a. revenue; cost b. fixed cost; fixed cost c. variable cost; variable cost d. variable cost; fixed cost e. fixed cost; variable cost ____ 3. If fixed cost at Q = 10 is \$150, then a. fixed cost at Q = 0 is \$0 b. fixed cost at Q = 0 is less than \$150 c. fixed cost at Q = 20 is \$300 d. fixed cost at Q = 200 is \$150 e. it is impossible to calculate fixed costs at any other quantity ____ 4. Fixed costs are defined as a. the total costs of a firm's production b. the additional cost of the last unit produced c. costs that increase proportionately as the quantity produced increases d. costs that do not vary as quantity produced increases e. implicit costs only ____ 5. The Happy Cookie Factory can produce 100 boxes of cookies for a total cost of \$300. If the variable cost of producing 100 boxes of cookies is \$250, then a. fixed cost must be \$50 b. marginal cost must be \$50 c. marginal cost must be increasing 1

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d. average variable cost must be decreasing e. average fixed cost must be constant Exhibit 7-6 Output Rent Cost of Labor Materials 0 \$200 \$ 0 \$ 0 10 200 100 100 20 200 200 200 30 200 250 300 40 200 350 400 50 200 500 500 ____ 6. Given the information in Exhibit 7-6, what is fixed cost? a. \$0 b. \$200 c. \$500 d. fixed cost depends on output level e. we cannot calculate fixed cost without knowing which inputs are fixed ____ 7. In Exhibit 7-6, the marginal cost of the 40th unit of output is a. \$20 b. \$35 c. \$200 d. \$350 e. \$1,000 ____ 8. In Exhibit 7-6, which costs are fixed costs? a. rent, labor costs, and material costs b. rent and labor costs c. rent and material costs d. labor and material costs e. rent only ____ 9. If a firm shuts down in the short run and produces no output, its total cost will be a. Zero b. equal to total variable cost c. equal to total fixed cost d. equal to explicit costs only e. impossible to calculate 2
____ 10. Marginal cost a. indicates how much total cost increases if one more unit is produced or how much total cost drops if production declines by one unit. b. is total cost divided by quantity c. is irrelevant to finding the profit maximizing output d. is calculated using variable costs only e. is calculated using fixed costs only ____ 11. Generally, as a movie theater adds more screens, it experiences a. declining profit b. higher prices c. diseconomies of scale d. economies of scale e. diminishing marginal returns ____ 12. Economies of scale occur where a. long-run average cost falls as new firms enter the industry b. short-run average cost falls as new firms enter the industry c. long-run average cost falls as one firm expands plant size

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This note was uploaded on 04/17/2009 for the course ECON 101 taught by Professor Van-wie during the Fall '08 term at Columbia State Community College.

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MICROECONOMICSEXAM#3 - MICROECONOMICS EXAM#3 NAME Multiple Choice Identify the choice that best completes the statement or answers the question 1 a

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