PracticeMidterm5

# PracticeMidterm5 - Economics 201(Section 025 Introduction...

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1 Economics 201 (Section 025) – Introduction to Microeconomics Practice Midterm Exam 5 Instructor: G. Lepori Instructions: fill in your name and student number both on this sheet and on the attached scantron sheet. For each question circle, fill in ONE bubble on the scantron sheet that you feel is the most appropriate solution to the question. There are 40 questions and each question is worth one point. You have 90 minutes to complete the exam. 1) Marjorie is willing to pay \$68 for a pair of shoes for a formal dance. She finds a pair at her favorite outlet shoe store for \$48. Marjorie's consumer surplus is a. \$10. b. \$20. c. \$48. d. \$68. ANS: B 2) Sally sharpens knives in her spare time for extra income. Buyers of her service are willing to pay \$2.50 per knife for as many knives as Sally is willing to sharpen. On a particular day, she is willing to sharpen the first knife for \$1.75, the second knife for \$2.25, the third knife for \$2.75, and the fourth knife for \$3.25. Assume Sally is rational in deciding how many knives to sharpen. Her producer surplus is a. \$0.25. b. \$0.50. c. \$1.00. d. \$1.75. ANS: C 3) The firm's efficient scale is the quantity of output that minimizes a. average total cost. b. average fixed cost. c. average variable cost. d. marginal cost. ANS: A 4) In the long run , a. inputs that were fixed in the short run remain fixed.

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2 b. inputs that were fixed in the short run become variable. c. inputs that were variable in the short run become fixed. d. variable inputs are rarely used. ANS: B 5) If a firm in a perfectly competitive market triples the number of units of output sold, then total revenue will a. more than triple. b. less than triple. c. exactly triple. d. Any of the above may be true depending on the firm’s labor productivity. ANS: C
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## This note was uploaded on 03/30/2008 for the course ECON 201 taught by Professor C.liedholm during the Spring '07 term at Michigan State University.

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PracticeMidterm5 - Economics 201(Section 025 Introduction...

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