&quot;415 practice Spring 20100

# &amp;quot;415 practice Spring 20100 - Sales data for all...

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Sales data for all firms in a given market are given in the table below: FIRM SALES (Millions of Dollars) ABC 18.6 CBB 25.3 FLM 10.5 HSS 7.4 KQR 28.2 MAS 4.7 PCI 14.4 REI 5.9 VHS 8.1 XER 22.0 1) The C 4 index for this market equals: a) 0.45 b) 0.50 c) 0.55 d) 0.60 e) 0.65 2) The HHI index for this market equals: a) 1311 b) 1389 c) 1452 d) 1520 e) 1875 3) If FLM and XER merge, the HHI index will increase by: a) 89 b) 154 c) 192 d) 219 e) 256 4) A profit maximizing firm will set its price in a region of the demand curve where: a) E Q,P < -1.00b) E Q,P = -1.00 c) -1.00 < E Q,P < 0.00 d) E Q,P = 0.00 e) None of the above are correct. 5) Suppose a firm’s production function is Q = 20 × Min(L, 2K). This firm minimizes per unit cost of producing 1000 units of output employing _____ units of capital if the wage rate equals 40 and the rental rate of capital equals 20. a) 25 b) 50 c) 75 d) 100 e) None of the above are correct. 6) Suppose a firm’s production function is Q = 20 × Min(L, 2K). This firm’s minimum per unit cost of producing 1000 units of output will equal ______ if the wage rate equals 40 and the rental rate of capital equals 20. a) 2.00 b) 2.50 c) 4.00 d) 5.00 e) None of the above are correct. 415 Exam II – PINK 1 of 7 Spring 2010

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Suppose Acme, Inc. is the only employer in its labor market, but faces a perfectly competitive market for its product. It is able to sell as much as it wants at a price equal to \$5 per unit of output. Acme’s marginal product of labor MP L = 100 – 10L. It confronts a labor supply curve L = (1/5)W – 4. The firm is unable to wage discriminate across employees. 7) Acme, Inc. will employ _____ units of labor to maximize profits. a) 2 b) 4 c) 6 d) 8 e) None of the above are correct. 8) Acme, Inc will offer a wage equal to _______ dollars per unit of labor to maximize profits. a) 30 b) 40 c) 50 d) 60 e) None of the above are correct. 9) Workers in Acme’s labor market form a union, and demand a wage equal to 150 per unit of labor. If Acme accepts this labor demand its profits will equal _______ if it has no fixed costs. a)
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## &amp;quot;415 practice Spring 20100 - Sales data for all...

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