2006finalwithkey - Name:_ ECO 101 Principles of...

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Name:_________________________ ECO 101 Principles of Microeconomics Final Exam Spring 2006 Form A There are 30 multiple choice questions and 5 short answer questions on this double-sided exam, so be careful not to skip any questions ! Part I: Multiple Choice (60 points) Read each question carefully and select the best response. Fill in the corresponding circle on your answer sheet. 1. If the total output of candles in Nick’s Wicks shop increases from 20 per hour to 30 per hour as he hires the second worker, then a. the marginal product of the second worker is 20 candles. b. the marginal product of the second worker is 30 candles. c. if the price of each candle is $2, the marginal revenue product (MRP) of the second worker is $20. d. if the price of each candle is $2, the marginal revenue product (MRP) of the second worker is $30. Output (pizzas per hour) Total cost (dollars) 0 20 1 35 2 49 3 61 4 71 5 79 6 85 2. Paulette owns a pizza parlor. Her total cost schedule is in the above table. Her marginal cost of producing the fifth pizza is a. $16 b. $10. c. $8 d. $6. 3. When firms in an oligopoly successfully collude and do not cheat on a cartel agreement, they achieve long-run economic profit similar to: a. perfect competition. b. monopoly. c. monopolistic competition. d. non-colluding oligopolies. 4. The price of a resource with a perfectly inelastic supply, a. is pure economic rent. b. consists of only opportunity cost and has no economic rent. c. cannot change. d. is determined by the supply. 5. What does monopolistic competition have in common with perfect competition? a. a large number of firms and freedom of entry and exit b. a standardized product
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c. product differentiation d. the ability to earn an economic profit in the long run 6. In the long run, existing firms exit a perfectly competitive market when a. economic profits are zero. b. economic profits are greater than zero. c. normal profits are greater than zero. d. they incur an economic loss. 7. If the price elasticity of supply for a good is 0.5, then a. an increase in the price boosts the quantity supplied by a larger percentage. b. the supply is elastic. c. the percentage change in the quantity supplied is less than the percentage change in price. d. None of the above answers are correct. 8. If a firm does not produce any output, its a. total fixed cost must be zero. b. economic profit must be positive. c. total variable cost must be zero. d. total costs must be zero. 9. If all households in a nation receive the same income, the nation’s Lorenz curve would a. be horizontal.
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This note was uploaded on 07/13/2009 for the course ECN 1211 taught by Professor Maloney during the Spring '09 term at Fairleigh Dickinson.

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2006finalwithkey - Name:_ ECO 101 Principles of...

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