Problem_Set_2

Problem_Set_2 - Economics 2 Problem Set II Practice Only I....

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Economics 2 Problem Set II Practice Only I. Multiple Choice Questions (Briefly explain your answers) 1. A price ceiling below the equilibrium price will cause a. producer surplus to fall. b. total economic surplus to rise. c. quantity supplied to exceed quantity demanded. d. quantity supplied to increase. e. demand to increase. 2. If economic profits are positive, then a. firms will be exiting the industry. b. accounting profits can be either negative, zero, or positive. c. the firm is receiving a normal profit. d. accounting profits are either zero or positive. e. accounting profits must be positive. 3. The significant difference between perfect competitors and imperfect competitors is a. the firm’s objective. b. the structure of their costs. c. the relationship of marginal costs to total costs. d. the relationship of price to marginal revenues. e. the relationship of marginal revenues and marginal costs. 4. An example of increasing returns to scale is when a 25% increase in all inputs a. increases output by 50%. b. increases output by 25%. c.
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This note was uploaded on 12/26/2009 for the course ECON ECON 2 taught by Professor Hamilton during the Spring '09 term at UCSD.

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Problem_Set_2 - Economics 2 Problem Set II Practice Only I....

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