Test 2 Spring 2010

Test 2 Spring 2010 - Spring 2010 AGEC 105 Test 2 Capps...

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1 AGEC 105 Spring 2010 Test 2 Capps Please put the following pieces of information on your scantron: (a) Name (b) UIN # (c) Section # (d) Sign the Aggie pledge on the back of your scantron. “On my honor, as an Aggie, I have neither given nor received unauthorized aid on this exam.”
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2 AGEC 105 Spring 2010 Test 2 Capps 1. Which of the following statement(s) is(are) true? (a) Stage 3 of production corresponds to MPP < 0. (b) AFC + AVC = ATC (c) MPP = APP where APP = maximum (d) All of the above. 2. According to the information below, which of the following is not true? Units of Variable Input (I) Units of Output (Q) TC TVC 100 2,000 $20,000 $18,000 (a) AVC = $10 (b) AFC = $1 (c) The price of the input is $180/unit. (d) Total fixed costs = $2,000 3. According to this diagram, the income elasticity of demand for salmon is: (a) less than 0.5 (b) equal to 0.5 (c) greater than 0.5 (d) can’t say; insufficient information. 4. Which of the following statements is true? (a) The social costs of monopolies are referred to as deadweight loss. (b) When producers respond to market prices in a previous time period, adjustments to market equilibrium occur in a random pattern. (c) Firms operating as monopolistic competitors, oligopolists, or monopolists may never incur a loss. (d) The profit maximizing level of output for any firm is determined where marginal revenue exceeds marginal cost. I $36,000 $20,000 12 16 Q salmon
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3 5. Assume that a retailer sells 500 units of Yoplait Yogurt per day at a price of $.40/unit. You, as an economic analyst, estimate that the cross-price elasticity between Yoplait Yogurt and Dannon Yogurt is 0.8. If the retailer raises the price of Dannon Yogurt by 10%, how would sales of Yoplait Yogurt be affected? (a) Sales of Yoplait Yogurt would not be affected at all. (b) Sales of Yoplait Yogurt would rise by 40 units. (c) Sales of Yoplait Yogurt would rise by 50 units. (d) can’t say; insufficient information. 6. Given that the cross-price elasticity between Yoplait Yogurt and Dannon Yogurt is 0.8, then we can say that: (a) Dannon Yogurt and Yoplait Yogurt are substitutes. (b) Dannon Yogurt and Yoplait Yogurt are complements. (c) Dannon Yogurt and Yoplait Yogurt are independent. (d) can’t say; insufficient information. 7. Suppose that a successful advertising and promotion campaign occurs for apples. Given this successful campaign, it is likely that: (a) the quantity of apples sold will fall and the price of apples will rise. (b) the quantity of apples sold will rise and the price of apples will rise. (c) the quantity of apples sold will fall and the price of apples will fall. (d) the quantity of apples sold will rise and the price of apples will fall. Consider the following table pertaining to corn production on a particular farm in Iowa. Assume
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Test 2 Spring 2010 - Spring 2010 AGEC 105 Test 2 Capps...

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