Quiz 4 - ECO 304K INTRODUCTION TO MICROECONOMICS Unique...

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Unformatted text preview: ECO 304K: INTRODUCTION TO MICROECONOMICS Unique # 33645, Fall 2009, Prof. Wiseman Quiz 4 Select the singie best answer for each question. 1. When marginal costs are greater than average total costs, then: A. Average totai costs are failing B Average variable costs are falling @erage total costs are rising . Average fixed costs are rising 2. Thomas Malthus‘ prediction that the world was doomed to living on the brink of starvation failed to come true because: WA larger fraction oftire world's population is now empioyed in agriculture than when Malthus made his prediction Improving agriculturai technology reduced the average totai cost of food production, allowing people to eat more whiie expending fewer resources C. People discovered Ways to survive on fewer caiories D. The worid‘s population stopped increasing and stabilized at a sustainabie level 3. According to the Altman Weil Survey of Law Firm Economics, larger law practices (nine or more iawyers) almost always spend more per lawyer on staffing, occupancy, equipment, promotion, malpractice, other nonwpersounel insurance coverage, of ice supplies and. other expenses than do smaller law firms. This suggests that large law practices tend to display: Economies of scale and the long run average cost per hour of producing iegal services increases as billable hours increase . Diseconomies of scale and the tong run average cost per hour of producing iegal services increases as biiiabie hours . increase fit! Economies of scale and the long run average cost per hour of producing legal services decreases as billable hours increase D. Diseconornies of scale and the tong run average cost per hour of producing legal services decreases as biilabie hours morease it. Which of the foiiowing is not a characteristic of markets in perfect competition? A. There are many buyers and seliers B. Firms can enter and exit the market freeiy in the long run C Firms do not have information about their rivals‘ product and cost structure . Firms produce a homogeneous product A rubber plantation uses two inputs to grow rubber land and labor. The plantation has a fixed acreage of iand. The tabie beiow shows the benefit to the plantation from hiring different numbers of workers. ,._m,tum,,r,....m_sw.mm_w_ N....,..‘-.«_....__mt.mt m..." hummus.“ mm. Dueeoffluttrrfiwtes . When do diminishing marginal returns set in? a} ith the eth worker iaired B. With the 5th worker hired C. With the 6th worker hired D. Output increases as more workers are hired so diminishing returns does not set in Ft? 5"._\, ._I 5; 1;-——. ‘ 45.: 4:5 ' . VIE-m) _.--i H. 5 A: ' ' ECO 304K: ENTRODUCTION TO MICROECONOMICS Unique # 33645, Fail 2009,.Prof. Wiseman Quiz 4 Select the single best answer for each question. 1. Consumers' surplus arises because: A. Consumers receive utility from the goods they purchase B. Consumers tend to consume more goods than they actually need C. Consumers place a higher value on some goods purchased than the prices they actually pay to acquire those goods D. Producers add hefty profit margins to many of the goods that consumers buy Figure 63 S 2. What is the consumer surplus in the market for widgets, above (before any government intervention)? A. $233 ll - 5. r" “5 B. $250 0. $483 5 A 55.5.5 530/ e e; ‘53 D. $500 3 What is the amount of social loss or kdeaéiweight loss if a price ceiling of $4 IS placed on widgets? A $120 5,0 5. + W 133150 254;: ~— L063 15726:} 110 C. $450 D. $483 Price per bushel (5‘) Quantity Demanded Quanfity Supplied (bushels) (bushels) :2“ 2 40,000 0 W ft: M £3 36,000 4,000 54 2. 0,0105?) 55 7305333 6 30, 000 8,000 . . Mm... , g“; 535555;) 8 24 000 W16 000 “~19? “5 at 0 U5 5 55 W {"1 "W"m"“""“"""””"’MWWW:§0:'000::fil: uuuuuuu 20 000 y E 52 {'0 5.55555 12 18,000 28 000 SR) 5% 14 12.000 36,000 M 23%} 16 6,000 40,000 5 "”15““ at 4. Consider the market described in the table above. If the government agrees to purchase any excess output at the price of $14 per bushel, what is the government's expenditure on the excess output? 555 N 55 f 5 53? A. $168,000 .. lg. 5 5 5m B. $504,000 (:1 Z? 55 555555 Hist @336000 5 D. $140,000 ill :55, L{ 35105000 Iowa/{‘5‘ {0/2 352,0 1“ W 25! . \ .5 <5 . 7'2; 4‘50“ ...
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