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Unformatted text preview: ECON 1102- SAMPLE FINAL MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following are part of a firm's opportunity costs? I. costs for resources bought in markets II. costs for resources the firm owns III. costs for resources supplied by the owner A) I, II, and III B) I only C) I and III D) I and II 2) An electrician quits her current job, which pays $40,000 per year. She can take a job with another firm for $45,000 per year or work for herself. The opportunity cost of working for herself is A) $85,000. B) $45,000. C) $5,000. D) $40,000. 3) Which of the following is part of a firm's opportunity costs? I. wages II. utility costs III. interest on a bank loan IV. interest forgone on funds used to buy capital equipment A) III and IV B) I, II, III and IV C) I and II D) I, II and III 4) Wanda takes $3,000 from her savings account that pays 5 percent interest per year and uses the funds to purchase a computer for $3,000 for her business. At the end of the year the computer is worth $2,000. Wanda pays an implicit rental rate (cost) of ________ a year. A) $1,150 B) $3,150 C) $4,000 D) zero 5) Technological efficiency occurs when the firm produces a given output A) at the least cost. B) by using the maximum amount of inputs. C) by using the least amount of inputs. D) at the greatest cost. 6) There are 6 firms in a market and the market shares of the firms are 40 percent, 30 percent, 10 percent, 8 percent, 7 percent, and 5 percent. The Herfindahl- Hirschman index is A) 88. B) 100. C) 2664. D) 2738. Firm Sales ($ million) P &amp; Q, Inc. 15 Kook, Inc. 12 Sweetee &amp; Crunch 8 EFG, Inc. 10 Shuger, Ltd. 5 7) The cookie industry in Eatsweetland consists of 15 firms. The industry sales are $80 million per month. The sales of the largest 5 firms are shown in the table below. The rest 10 firms have sales of $3 million each. What is the four- firm concentration ratio in Eatsweetland's cookie industry? A) 63 percent B) 44 percent C) 56 percent D) 87 percent 1 Firm Market share (percentage of sales) Susan's Stitches 40 Tommy's Threads 25 Robert's Wardrobe 10 Katie's Klothes 10 Greg's Garments 10 Amy's Attire 5 8) The table above gives the market share of sales of firms in the retail clothing market. What is the four- firm concentration ratio? A) 100 percent B) 85 percent C) 70 percent D) 65 percent 9) In the short run, A) the size of the plant is fixed. B) all inputs are fixed. C) all inputs are variable. D) some firms experience increasing returns to scale. 10) The marginal product and average product curves A) intersect at the maximum point of the marginal product curve. B) do not intersect at any predictable point....
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