Midterm 2 - Nov 17 - ECO 304K: Introduction to...

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November 17, 2008 ECO 304K: Introduction to Microeconomics Unique number 33815 Dr. Olivier Giovannoni Second Midterm Instructions: 1. Make sure you report ALL information on the scantron (name, EID, bubble up all your answers). 2. You have the whole hour (45min. really) to answer 34 questions, all multiple choice. 3. No document is allowed, no calculators either. But you can write on and keep the test sheet. 4. Any person caught cheating is in serious trouble, according to UT regulations. ALL MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) All the decisions made by people who operate firms have one overriding objective, which is to ________. 1) A) make maximum attainable profit B) maximize the firm's market share C) maximize the firm's total revenue D) maximize the quantity that the firm sells 2) Marginal cost is calculated as 2) A) total cost minus total fixed cost. B) the increase in total cost divided by the increase in output. C) the increase in total cost divided by the increase in labor, given the amount of capital. D) total cost divided by output. 3) Average variable cost is at a minimum at the same amount of output at which 3) A) average product is at a minimum. B) average product is at a maximum. C) marginal product is at a maximum. D) marginal product is at a minimum. 4) When a firm is experiencing economies of scale, 4) A) the MC curve slopes downward. B) diminishing returns to labor have been suspended. C) the MP curve slopes upward. D) the LRAC curve slopes downward. 5) With a technological change that increases productivity, the average product curve ________ and the marginal product curve ________. 5) A) is unchanged; is unchanged B) is unchanged; shifts upward C) shifts upward; is unchanged D) shifts upward; shifts upward 6) The industry that produces zangs is in long - run equilibrium. Then the demand for zangs increases permanently. As a result, firms in the industry will ________. Some firms will ________ the industry, and the industry supply curve will shift ________. 6) A) make economic profits; enter; rightward B) incur economic losses; exit; rightward C) make normal profits; exit; leftward D) incur economic losses; exit; leftward 1
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7) In the above figure, the intersection of curves A and C is the point at which 7) A) average fixed cost is minimized. B) average variable cost is minimized. C) average total cost is minimized.
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This note was uploaded on 12/06/2009 for the course ECON 33815 taught by Professor Giovannoni during the Spring '08 term at University of Texas.

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Midterm 2 - Nov 17 - ECO 304K: Introduction to...

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