Exam2.MWF - AGEC 105 Spring 2007 Capps MWF Test 2 Please...

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AGEC 105, Test 2, Page 1 AGEC 105 Spring 2007 Test 2 Capps MWF Please put the following pieces of information on your scantron: (a)Name (b)UIN # (c)Sign the Aggie pledge on the back of your Scantron. “On my honor, as an Aggie, I have neither given nor received unauthorized aid on this exam.”
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AGEC 105, Test 2, Page 2 Capps Test 2 Spring 2007 1. Which of the following is true? (a) AFC + AVC = ATC (b) If total economic surplus is positive due to a shift in a demand or supply curve, society is better off. (c) The law of diminishing marginal returns states that as the use of an input increases, its MPP will eventually fall. (d) all of the above 2. In an oligopoly, which of the following is not true? (a) firms will match all price decreases of another, but will not match price increases. (b) the market demand curve is kinked. (c) firms will attempt to differentiate their products. (d) firms will match all price increases of another, but will not match price decreases. 3. The piece of legislation that not only plugged loopholes in the Sherman Antitrust Act of 1890 but also created the Federal Trade Commission was: (a) the Capper–Volstead Act of 1922. (b) the Agricultural Marketing Agreement Act of 1937. (c) the Clayton Act of 1914. (d) none of the above. 4. Assume that the price of sorghum grain is $6.00 per bushel. When we apply 30 tons of fertilizer on our 20 acres of sorghum grain, the total yield is 1,000 bushels. When we apply 50 tons of fertilizer, the total yield is 1,500 bushels. What is the marginal value product per ton of fertilizer? (a) $25/ton (b) $75/ton (c) $150/ton (d) can’t tell; insufficient information
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AGEC 105, Test 2, Page 3 Use the graph below to answer questions 5 to 9. 5. Which of the following does the graph illustrate? (a) monopoly in the short run (b) monopolistic competition in the short run (c) imperfect competition on the buying side of the market (d) (a) and (b) 6. What is the price charged and the output produced in order to maximize profits? (a) P = 20, Q = 50 (b) P = 27, Q = 60 (c) P = 30, Q = 50 (d) P = 18, Q = 50 7. The maximum profit under imperfect competition is: (a) $250. (b) $1250. (c) $1500. (d) can’t tell; insufficient information 8. Suppose the government imposes a price ceiling of $27. Now what is the price charged and the output produced? (a) P = 27, Q = 50 (b) P = 27, Q = 60 (c) P = 30, Q = 50 (d) can’t tell; insufficient information 9. If the demand curve were to intersect with the quantity axis, Q would be equal to: (a) 100 (b) 110 (c) 120 (d) can’t tell; insufficient information
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AGEC 105, Test 2, Page 4 10. If the government were to impose a lump-sum tax on a monopolist, what is likely to happen to the quantity produced of a commodity and the price charged relative to the situation where there is no lump-sum tax imposed? (a) The price would fall and the quantity produced would fall.
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Exam2.MWF - AGEC 105 Spring 2007 Capps MWF Test 2 Please...

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