Econ - Practice Final

Econ - Practice Final - Page 1 280-293C, Summer 2001 -...

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Page 1 280-293C, Summer 2001 - Final Exam 1. In Figure 6-5, part (i), the consumer is able to move from point A to point B because of a. a decrease in the price of milk. b. a decrease in the price of bread. c. a decrease in money income. d. an increase in money income. Version 2
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Page 2 280-293C, Summer 2001 - Final Exam 2. In Figure 6-5, part (ii), the consumer's moving from point Z to point Y is caused by a. a change in the consumer's preferences towards milk. b. an increase in the price of milk. c. an increase in the price of bread. d. a decrease in real income. 3. As a consumer moves along an indifference curve a. the combination of goods will vary, but the level of satisfaction remains constant. b. the combination of goods he prefers will remain constant, but the level of satisfaction will vary. c. the combination of goods and the consumer's income level will remain constant. d. his level of satisfaction will vary as the combinations of goods varies. Version 2
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Page 3 280-293C, Summer 2001 - Final Exam 4. The fully allocated cost of a product is $45. If the firm wants to use a markup of 30%, then it should charge a unit price of a. $48.00 b. $58.50 c. $60.00 d. $65.00 5. If there is no external market for an intermediate product, then the transfer price should be set equal to a. the marginal cost of producing the optimal quantity of the intermediate product. b. the marginal cost of producing the final product. c. the selling price of the final product. d. None of the above is correct. 6. If the external market for an intermediate product is perfectly competitive then the transfer price should be set equal to a. the market price of the final product. b. the competitive market price of the intermediate product. c. the marginal cost of the final product. d. Non of the above is correct. 7. Firms that use cost-plus pricing should a. use a higher markup on products with a relatively inelastic demand. b. use a higher markup on products with a relatively elastic demand. c. base their calculations on the historical average cost of the product. d. apply the same markup on every product that they sell. 8. The fully allocated cost of a product is $10. If the price elasticity of demand for the product is -2, thenthe firm's optimal markup is a. 10% b. 100% c. 200% d. None of the above is correct. 9. In game theory, a dominant strategy refers to a choice a. that is the best response to the strategy selected by another player. b. that is the best response regardless of the strategy selected by another player. c. that results in the player receiving a higher payoff than any other players. d. All of the above are correct 10. In a two player game, which of the following is a Nash equilibrium? a. Each player chooses a strategy that is optimal given the others'
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Econ - Practice Final - Page 1 280-293C, Summer 2001 -...

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