HW3 - ECO 201 Homework #3 50 Points Topics 14 through 19...

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ECO 201 – Homework #3 50 Points Topics 14 through 19 The homework must be completed by 10PM on Thursday, July 17. 1. Marginal revenue is: a. the change in total revenue divided by total output b. total revenue divided by total output c. total revenue minus total cost then divided by total output d. the change in total revenue divided by the change in price of output e. the change in total revenue divided by the change in total output 2. Which of the following will always equal zero when the firm's output level is zero? a. fixed costs b. implicit costs c. variable costs d. opportunity costs 3. The change in cost to the firm from producing one additional unit of output is: a. average total cost b. total variable cost c. average variable cost d. marginal cost e. total cost 4. As a firm increases its output in the short run, average fixed cost: a. rises steadily b. falls and then rises c. falls steadily d. rises and then falls e. remains unchanged 5. Which of the following is true about the relationships among various cost curves? a. when MC exceeds ATC, ATC must be rising b. when MC exceeds ATC, ATC could be rising or falling c. when ATC is falling, MC must exceed ATC d. when TC is rising, MC must exceed TC e. TC falls when AFC falls 6. Assume that a firm has a wage rate of $300. If the firm's AVC is $2, its APL is: a. 0 b. 2 c. 150 d. 300 e. 600 7. If Carol's Crayon Factory's price exceeds its average total cost in the short run, then: a. it should shut down b. it is earning a positive economic profit c. profits are being maximized d. it should increase output e. it should decrease output
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Use the following table for questions 8 through 14. K L q 4 0 0 4 1 60 4 2 115 4 3 165 4 4 210 4 5 250 4 6 285 Assume that each unit of capital employed costs $200 and the wage rate is $50. 8. What is the total fixed cost of producing 165 units? a. $150 b. $200 c. $600 d. $800 e. $950 9. What is the total variable cost of producing 165 units? a. $50 b. $100 c. $150 d. $200 e. $250 10. What is the total cost of producing 165 units? a. $500 b. $750 c. $800 d. $850 e. $950 11. What is the average fixed cost of producing 165 units? a. $0.91 b. $1.00 c. $2.50 d. $4.85 e. $5.76 12. What is the average variable cost of producing 165 units? a. $0.91 b. $1.00 c. $2.50 d. $4.85 e. $5.76 13. What is the average total cost of producing 165 units? a. $0.91 b. $1.00 c. $2.50 d. $4.85 e. $5.76
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14. What is the marginal cost of producing 165 units? a. $0.91 b. $1.00 c. $2.50 d. $4.85 e. $5.76 15. When marginal cost exceeds marginal revenue: a. the firm can increase profits by increasing output b. the firm will lower profits by increasing output c. the firm is maximizing profits d. total cost exceeds total revenue e. average cost equals average revenue 16. The change in total profit when the firm increases its output by one unit equals: a. total revenue minus total cost b. total revenue minus marginal revenue c. marginal revenue minus marginal cost d. total revenue minus marginal cost e. marginal revenue plus marginal cost
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This note was uploaded on 06/23/2008 for the course ECO 201 taught by Professor Mikeadkins during the Spring '08 term at KCTCS.

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HW3 - ECO 201 Homework #3 50 Points Topics 14 through 19...

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