Exam 3 Form A - ECON 2005 Fall 2007 Name ID Version A Third...

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1 ECON 2005 Name: Fall 2007 ID #: Version A Third Exam Instructions: Since a wrong answer has the same impact on your score as no answer, you should answer every question. The total time is 65 minutes. The total score is 100 points. Please be sure to write your name and ID # on both the exam and the opscan form. Make sure you also write down the correct version of the exam on your opscan form. GOOD LUCK! 1. When marginal cost is less than average total cost, a. marginal cost must be falling. b. average total cost must be falling. c. average total cost must be rising. d. average variable cost must be falling. 2. An example of an explicit cost would be 3. Diminishing marginal product of labor occurs when adding another unit of labor 4. The average fixed cost curve
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2 5. When a local grocery store offers discount coupons in the Sunday newspaper it is most likely trying to a. Offer their customers a reward for reading the paper b. Reduce prices for all customers c. Gain some pricing power over other grocery stores in town d. Price discriminate 6. Competitive firm differ from monopolies in which of the following ways? (i) Competitive firm does not have to worry about the price effect lowering their total revenue. (ii) Marginal revenue for a competitive firm equals price, while marginal revenue for a monopoly is greater than the price it is able to charge. (iii) Monopolies must lower their price in order to sell more of their product, while competitive firms do not.
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