Exam2-prac

# Exam2-prac - Practice Exam Midterm 2 Version 11 Name:_...

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1) A price floor above the market equilibrium price: a. causes a surplus. b. causes a shortage. c. causes excess supply. d. has no effect. e. both a and c. 2) If total cost is given by TC=10+10Q then: a. AVC=10/Q+10 b. MC = 10 c. AVC = 10Q + 10 d. both a. and b. e. both b. and c. 3) A company could produce 99 units of a good at a total cost of \$316 or produce 100 units of the same good at a total cost of \$320. The marginal cost of the 100th unit a. is \$3.16. b. is \$3.20. c. is \$4.00 d. is \$320. e. cannot be calculated with this information. 4) Suppose the market for hot dogs is perfectly competitive. If Joe’s marginal benefit of consuming hot dogs is greater than the price of hot dogs, a. Joe will get consumer surplus from eating hot dogs. b. the price of hot dogs will rise. c. the price of hot dogs will fall. d. there is no decreasing marginal benefit of eating hot dogs. e. Both a. and b. 1
Costs per unit (dollars per unit) Quantity (units per day) 06 0 20 80 40 4 8 12 16 20 B C A D 5) In the above figure, as output increases the distance between curves B and C decreases because a. total cost decreases as output increases. b. average fixed cost decreases as output increases. c. there are diminishing returns to average total cost. d. there are increasing marginal costs as output increases. e.

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## This note was uploaded on 07/28/2010 for the course ECON 101 taught by Professor Hansen during the Fall '07 term at Wisconsin.

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Exam2-prac - Practice Exam Midterm 2 Version 11 Name:_...

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