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test2_jan23

# test2_jan23 - Department of Economics University of Toronto...

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Page 1 of 8 Department of Economics Prof. Gustavo Indart University of Toronto January 23, 2004 ECO 100Y – L0301 INTRODUCTION TO ECONOMICS Midterm Test 2 LAST NAME FIRST NAME STUDENT NUMBER INSTRUCTIONS : 1. The total time for this test is 50 minutes. 2. This exam consists of two parts. 3. This question booklet has 8 (eight) pages. 4. Aids allowed: a simple calculator. 5. Use pen instead of pencil . DO NOT WRITE IN THIS SPACE Part I /25 Part II 1. /20 2. /15 TOTAL /60

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Page 2 of 8 PART I (25 marks) Instructions : Circle the most appropriate answer . Each question is worth 2.5 (two and one-half) marks. No deductions will be made for incorrect answers. 1. When marginal product is at a maximum a) average product is falling b) total product is at a maximum c) marginal cost is at a maximum d) marginal cost is at a minimum 2. If a firm's fixed cost is \$100, and its total cost is \$200 to produce one unit and \$310 to produce two units, the firm is 3. A competitive industry has two firms. Firm A produces 15 units of output at a marginal cost of \$6 and an average cost of \$5. Firm B produces 20 units of output at a marginal cost of \$6 and an average variable cost of \$7. What is the output supplied by this industry at \$6? 4. A perfectly competitive industry is initially in long-run equilibrium. The industry has a constant cost long run supply curve. The government introduces a commodity tax of \$1.50 per unit of output. This tax will cause which of the following in the long-run?
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test2_jan23 - Department of Economics University of Toronto...

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