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test2_dec03 - Department of Economics University of Toronto...

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Page 1 of 7 Department of Economics Prof. Gustavo Indart University of Toronto December 3, 2004 ECO 100Y – L0101 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 7 (seven) pages. 4. Aids allowed: a simple calculator. 5. Use pen instead of pencil . DO NOT WRITE IN THIS SPACE Part I /15 Part II 1. /15 2. /20 TOTAL /50 /100
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Page 2 of 7 PART I (15 marks) Instructions: Circle the best answers to each question. Each question is worth 3 (three) marks. No deductions will be made for incorrect answers. 1. A profit-maximizer firm will shut down production if price is A. below minimum total average cost but above minimum average variable cost B. below minimum average variable cost C. above minimum average fixed cost D. below minimum average revenue E. below minimum total average cost 2. If the average product curve is rising, then the marginal product curve 3. A perfectly competitive industry is in short run equilibrium. Each firm is initially making economic profits of $100,000 per year. Now, each firm faces an increase in property taxes of $40,000 per year. As a result of this shock, which one of the following statements is correct;
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