Midterm Exam 1 example

Midterm Exam 1 example - Economics for Managers - Economics...

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Economics for Managers - Economics 4311 Exam 1 Worth 25 points June 7, 2007 1. If the interest rate is 10% and cash flows are $1,000 at the end of year one and $2,000 at the end of year two, then the present value of these cash flows is a. $2,562. b. $3,200. c. $439. d. $3,000. Answer: A 2. Economic profits are: a. total revenue minus total cost. b. marginal revenue minus marginal cost. c. total revenue minus total opportunity cost. d. total profits of the economy as a whole. Answer: C 3. To maximize profits, a firm should continue to increase production of a good until: a. total revenue equal total cost. b. profits are zero. c. marginal revenue equals marginal cost. d. average cost equals average revenue. Answer: C 4. Given the benefit function B(Y) = 400Y - 2Y 2 , the marginal benefit is: a. 200Y. b. 400-2Y 2 . c. 400-4Y. d. 800-2Y. Answer: C 5. Which of the following is an implicit cost of going to college? a. tuition. b. cost of books and supplies. c. room and board. d. foregone wages. Answer: D 6. Trade will take place: a. if the maximum that a consumer is willing and able to pay is less than the minimum price the producer is willing and able to accept for a good. b. if the maximum that a consumer is willing and able to pay is greater than the minimum price the producer is willing and able to accept for a good. c. only if the maximum that a consumer is willing and able to pay is equal to the minimum price the producer is willing and able to accept for a good. d. none of the above.
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This note was uploaded on 06/01/2011 for the course ECON 101 taught by Professor Dude during the Spring '11 term at Columbia SC.

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Midterm Exam 1 example - Economics for Managers - Economics...

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