Nov72003a - ECONOMICS A04H Second Test November 7 2003 Time...

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ECONOMICS A04H Second Test, November 7, 2003 Time: 105 minutes Professors Gordon Cleveland and Michael Krashinsky NAME:_______________________________________________________ (Last name) print clearly (First name) STUDENT NUMBER ______________________________________________ WHEN IS YOUR WEEKLY TUTORIAL? _________________________________________ (Day) (Time) Only non-programmable calculators are permitted for this test. If two multiple choice answers both seem to be approximately correct, choose the best of the two answers. Write answers to multiple choice questions on this front sheet. You should detach this front sheet now ; you will only hand in this sheet of answers. USING CAPITAL LETTERS , PRINT YOUR ANSWERS TO ALL MULTIPLE CHOICE QUESTIONS BELOW 1. _______ 6. _______ 11. ________ 16. _______ 21. ________ 2. _______ 7. _______ 12. ________ 17. _______ 22. ________ 3. _______ 8. _______ 13. ________ 18. _______ 23. ________ 4. _______ 9. _______ 14. ________ 19. _______ 24. ________ 5. _______ 10. _______ 15. ________ 20. _______ 25. ________ NOTE THAT YOU CAN USE THE BACK OF ANY PAGE FOR YOUR ROUGH WORK. MULTIPLE CHOICE QUESTIONS ANSWER ALL QUESTIONS. ON THE FRONT SHEET OF THIS TEST.
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1.3. A small perfectly competitive producer of cheddar cheese has a short run production function given by q = 10L 1/3 , where q is the number of kilos of cheese produced per day and L is the number of workers hired per day. In the short run, there are 27 units of capital and the price of each unit of capital equipment is $8 per unit. The price of labour is $4 per worker per day. This information can be used in answering questions 1 through 3 on this test. 1. When L = 8, what is the marginal product of labour for this firm? (A) 0 (B) 1 (C) 5/6 (D) 6/5 (E) 4 (F) 1/4 (G) 3 (H) 1/3 (I) 5 (J) 1/5 (K) 10 (L) 1/10 (M) 15 (N) 1/15 (O) 20 (P) 1/20 (Q) 2 (R) 1/2 (S) none of the above 2. When L = 125, what is the marginal cost of production for this firm? (M) $17.25 (N) $20 (O) $30 (P) $40 (Q) $50 (R) $70 (S) none of the above 3. At what value of L (i.e., at what number of workers-to the nearest whole number) does average cost reach its minimum for this firm? (M) 27 (N) 30 (O) 32 (P) 36 (Q) 39 (R) 40 (S) 42 (T) 45 (U) 48 (V) 50 (W) 54 (X) 60 (Y) 64 (Z) none of the above 4.6. A perfectly competitive firm has short run costs given by TC = 2q 2 + 100q + 200, where fixed costs are $72 (already included in the total cost function). This information can be used to answer questions 4-6 on this test. 4. When q = 144, by how much is the average variable cost of production less than the average total cost of production? M (M) $3.25 (N) $4 (O) $5 (P) $10 (Q) $15 (R) $20 N (S) none of the above O
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