midterm2 - Principles of Microeconomics Midterm 2 Summer...

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Principles of Microeconomics Midterm 2 Summer 2008 Dr. A Bhatia There are 60 multiple choice questions. 1 point each. 60 points total. You may take the exam anytime between June 26 th and July 2nd 2008. It is due NO LATER THAN MIDNIGHT on July 2 nd . Absolutely no late midterms will be accepted. This is an open book, open notes exam. I am assuming that you will uphold the honor code (while taking this exam. That includes NOT discussing the exam, even in passing, with anyone else. Any evidence of having done so would automatically qualify you for a failing grade I strongly believe in Karma as well. It will come and bite you if you are not honor-bound. If you have any questions feel free to email me at alpna.bhatia@ucdenver.edu . Good Luck 1. Economic cost can best be defined as: a) any contractual obligation that results in a flow of money expenditures from an enterprise to resource suppliers. b) any contractual obligation to labor or material suppliers. c) compensations that must be received by resource owners to insure their continued supply. d) all costs exclusive of payments to fixed factors of production. 2. What do wages paid to blue-collar workers, interest paid on a bank loan, forgone interest, and the purchase of component parts have in common? a) None are either implicit or explicit costs. b) All are opportunity costs. c) All are implicit costs. d) All are explicit costs. 3. The amount of calendar time associated with the long run: a) is less than that associated with the immediate market period. b) varies from industry to industry. c) is the same for all firms. d) is one year by definition. 4. The law of diminishing returns indicates that: a) as extra units of a variable resource are added to a fixed resource, marginal product will decline beyond some point. b) because of economies and diseconomies of scale a competitive firm's long- run average total cost curve will be U-shaped. c) the demand for goods produced by purely competitive industries is downsloping. d) beyond some point the extra utility derived from additional units of a
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product will yield the consumer smaller and smaller extra amounts of satisfaction. 5. Marginal cost is the: a) rate of change in total fixed cost that results from producing one more unit of output. b) change in total cost that results from producing one more unit of output. c) change in average variable cost that results from producing one more unit of output. d) change in average total cost that results from producing one more unit of output. 6. The relationship between the marginal cost and the average total cost schedule is such that: a) the behavior of one schedule does not affect the other. b) if ATC exceeds MC, MC must be rising. c) if MC is declining, ATC may be either declining or rising.
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midterm2 - Principles of Microeconomics Midterm 2 Summer...

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