MultipleChoice Practice Exam II

# MultipleChoice Practice Exam II - Multiple Choice Practice...

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Multiple Choice – Practice midterm 2 The A stands for Answer not the letter A Section 1: Multiple-Choice Questions (35 X 2 points) 1. Total profit A a. is the difference between total revenue and total cost. b. should not be considered as the goal of firms. c. is always criticized by communist leaders. d. is maximized when sales are maximized. 2. Marginal revenue is the addition to a firm’s revenue from a. a \$1 change in price. A b. a one-unit change in output. c. the sale of inferior output. d. a \$1 reduction in marginal cost. 3. For a competitive firm, marginal revenue is equal to a. the marginal revenue of the monopoly b. the average fixed cost c. the quantity at which profit is maximized A d. the price of the good that the firm produces Figure 1 4. According to Figure 1, marginal product of labor (MPL) from A to B is a. bigger than MPL from B to C A b. smaller that MPL from B to C c. undetermined d. smaller than MLP from E to F

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5. According to Figure 1, marginal product of labor (MPL) is decreasing a. from A to F b. from A to B A c. from C to F d. in none of the points over the frontier 6. Considering the production function in Figure 1, average product of labor (APL) would be a. “U” shaped A b. inverted “U” shaped c. “S” shaped d. inverted “S” shaped Figure 2 7. According to Figure 2, A a. d is an efficient point b. f is an efficient point c. g is an efficient point d. there are no efficient point
8. The law of diminishing returns implies that, with the use of capital fixed, as the use of labor rises, a. total product will fall eventually. A

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## This note was uploaded on 04/11/2010 for the course ECON E-201 taught by Professor Baiyee-mbi during the Spring '10 term at IUPUI.

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MultipleChoice Practice Exam II - Multiple Choice Practice...

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