finalAS-sp10_302 - Final Version A (Solution) May 11, 2010...

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Final Economic 302 Name:__________________ Version A (Solution) May 11, 2010 Net-ID:_________________ Before beginning the exam, please verify that you have 12 pages with 60 questions in your exam booklet. On Your scantron sheet, you must place your full name, Net-ID and section number. Make sure you bubble in the correct exam version. Please choose the BEST response to the following questions and record your answers on the scantron sheet provided with a number 2 pencil . Only answers marked on the scantron will be counted. Good Luck! 1) The following graph depicts two isoquants for a production technology. The situation pictured is one of A) Constant returns to scale, because the line through the origin is linear. B) Decreasing returns to scale, because the isoquants are convex. C) Decreasing returns to scale, because doubling inputs results in less than double the amount of output. D) Increasing returns to scale, because the isoquants are convex. E) Increasing returns to scale, because doubling inputs results in more than double the amount of output. 2) True or False : If goods X and Y have the same price, and a consumer only consumes good Y , then the marginal utility of good Y is necessarily higher than the marginal utility of good X . A) True B) False 1
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A linear total cost curve which passes through the origin implies that A) Average cost is constant and marginal cost is variable. B) Average cost is variable and marginal cost is constant. C) Average and marginal costs are constant and equal. D) Need more information to answer question. 4) A firm’s marginal cost curve A) is always U-shaped. B) always has a positive slope. C) is always below its average cost curve. D) always intersects its average cost curve at its minimum point. 5) Suppose a farmer is a price taker (MR = P = 6) in soybeans with cost functions given by TC = 0.1Q 2 + 2Q + 30. The level of profit is: A) 10 B) 60 C) 0 D) 150 6) Which of the following would shift the demand curve for new textbooks to the right? A) a fall in the price of papers used in publishing texts. B) a fall in the price of equivalent used textbooks. C) an increase in the population of students. D) a fall in the price of new textbooks. 7) Find the optimal quantity for the single price monopolist described by the information in the following table: Q P MR SMC AVC 0 50 40 43 45 30 43 35.5 35.5 40.5 50 37.5 25 20.5 35 68 33 16.5 16.5 30 100 25 0 31.5 21.5 A) Q = 30 B) Q = 68 C) Q = 0 D) Q = 50 8) True or False : When price equal marginal cost, profit equals zero. A) True B) False 9) True or False : A firm that shuts down must be earning negative profit, but a firm that earns negative profit might not shut down. A) True
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This note was uploaded on 02/27/2011 for the course ECON 302 taught by Professor Avrin-rad during the Spring '09 term at University of Illinois, Urbana Champaign.

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finalAS-sp10_302 - Final Version A (Solution) May 11, 2010...

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