finalAS_302-f08

finalAS_302-f08 - Final Version A December 17, 2008...

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Final Economic 302 Name:__________________ Version A Section 9 December 17, 2008 Net-ID:_________________ Before beginning the exam, please verify that you have 11 pages with 50 questions in your exam booklet. On Your scantron sheet, you must place your full name, university ID number, Net-ID. Make sure you bubble in the correct exam version. Please choose the BEST response to the following questions and record your answers on the scantron sheet provided with a number 2 pencil . Only answers marked on the scantron will be counted. Good Luck! 1) For a competitive firm, the output where MC = AVC is called the A) Shutdown point. B) Break-even point (where TR=TC). C) Profit maximizing point. D) None of the above. 2) If firms are price takers this implies A) That in the short-run economic profits will be zero. B) That the demand curve facing the firm is perfectly elastic. C) That the total revenue curve is horizontal. D) All of the above. 3) In the long run for a competitive firm, A) The firm is at the bottom of its short run average cost curve. B) The firm is at the bottom of its long run average cost curve. C) Marginal cost equals price. D) All of the above. E) Only (B) & (C) 4) A pecuniary diseconomy occurs when A) Supply exceeds demand. B) An expansion of industry output increases the price of an input. C) Higher output levels result in lower unit costs. D) None of the above. 5) Suppose that the supply curve is given by P = 4Q. What is the elasticity of supply? A) 4 B) 1/4 C) 1 D) Cannot be determined from the above information 1
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6) Everything else constant, in the long run, a per unit tax placed on a perfectly competitive (constant cost) industry will A) Increase the price of the good by an amount equal to the tax & decrease the number of firms. B) Increase the price of the good by an amount equal to the tax & increase the number of firms. C) Increase the price of the good by an amount less than the tax & decrease the number of firms. D) Increase the price of the good by an amount less than the tax & increase the number of firms. E) The tax is borne entirely by the firm and the number of firms will decrease. 7) True or false : A firm's total revenue curve is given by 3Q 2 - 7Q. The firm is perfectly competitive. A) True B) False 8) In the following LMC : long-run marginal cost, P : price, LAC : long-run average cost. If a competitive firm is producing where LMC = P and the LMC is equal to LAC, then it would do better in the long run by A) Increasing output with its existing plant until SMC equals price. B) Increasing plant size until LMC and SAC are identical and equal to price. C) Decreasing plant size until LAC, SAC and price are equal. D) Changing nothing because it is already at the long run profit maximizing point. 9)
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finalAS_302-f08 - Final Version A December 17, 2008...

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