Exam2_example - Economics 1 EXAM 2 Feb 22, 2005 Professor...

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Economics 1 Professor Scott Carrell EXAM 2 Feb 22, 2005 There are two parts to this exam. Part I is made up of 12 multiple choice problems, and is worth 36 points. Part II is made up of 10 short answer problems, and is worth 64 points. Be sure to read each question carefully before answering. Do not use any books or notes. You have 65 minutes to complete the full 100 point exam. Be sure to budget your time. NAME: _______________________________________________ PART I - MULTIPLE CHOICE PROBLEMS Read each of the following questions carefully and circle the letter of the one best answer . Note that diagrams are often helpful in determining the correct answer. 1) The output at which average product is a maximum is the same output at which ____ is a minimum. A) average fixed cost B) average total cost C) average variable cost D) marginal cost 2) If as output increases marginal cost exceeds average variable cost but is less than average total cost, average total cost ____ and average variable cost ____. A) decreases; increases B) increases; decreases C) decreases; decreases D) increases; increases 3) If the long-run industry supply curve in a perfectly competitive industry is downward sloping, then the industry experiences ____ and as the industry expands the price ____. A) external economies; falls B) external diseconomies; falls C) external diseconomies; rises D) external economies; rises 1
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4) The perfectly competitive industry that produces zangs is in long-run equilibrium. Then the demand for zangs increases permanently. As a result, firms will ____. Some firms will ____ the industry, and the industry supply curve will shift ____. A) make normal profits; exit; leftward B) incur economic losses; exit; rightward C) incur economic losses; exit; leftward D) make economic profits; enter; rightward 5) Tris owns the only auto repair shop on Lonely Island. Tris is a single-price monopoly, so Tris operates on the ____ part of the ____ curve.
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This note was uploaded on 04/03/2010 for the course ECN 1A ECN 1A taught by Professor Jayhelms during the Winter '09 term at UC Davis.

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Exam2_example - Economics 1 EXAM 2 Feb 22, 2005 Professor...

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