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

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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 a. the cost of foregone labor earnings of an entrepreneur b. the cost of flour for a baker. c. the lost opportunity to invest in other capital markets when money is invested in one’s own business. d. none of the above. 3. Diminishing marginal product of labor occurs when adding another unit of labor a. increases output, but not by a margin as previous units of labor. b. decreases output. c. increases output, by more than the margin of previously employed labor. d. None of the above. 4. The average fixed cost curve a. declines as long as it is above marginal cost. b. declines as long as it is below marginal cost. c. always declines with increased levels of output. d. always rises with increased levels of output.
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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. a. (i) and (ii) b. (ii) and (iii) c. (i) and (iii) d. all of the above. 7. In a competitive market, the actions of a single buyer or seller a. cause a noticeable change in overall production and a change in final product price b. have little effect on overall production but will ultimately change final product price c. have a negligible impact on the market price d. adversely affect the profitability of more than one firm in the market.
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This note was uploaded on 04/01/2008 for the course ECON 2005 taught by Professor Zirkle during the Fall '07 term at Virginia Tech.

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

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