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TEST2A.2006

# TEST2A.2006 - ECMA04H Second Term Test Professors Michael...

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ECMA04H SECOND TERM TEST November 17, 2006 This term test consists of 25 questions (plus a 26 th identifier question). Answer each question by choosing the best alternative and indicating your choice in the appropriate place on the scantron sheet provided with this exam (it is the only thing you will turn in at the end of the exam). You may take the rest of the exam away with you, so you can use the fronts and back of these pages for your rough work. If you wish to keep a record of your answers, make a note of them on the exam. The scantron sheet will not be returned to you, but correct answers will be posted, and your grade will be communicated to you through the website. Each correct answer to questions 1 through 25 is worth 4 marks (there is no deduction for wrong answers). 1-6. A firm in a perfectly competitive constant cost industry has total costs in the short run given by: TC = 0.1q 2 + 6q + 90 q 2 where q is output per day and TC is the total cost per day in dollars. The firm has fixed costs of \$75.60 (already included in the TC equation above). The TC equation generates minimum average costs of \$12 (per unit) at q = 30. You are also told that this size firm generates minimum long run average costs (that is, minimum LAC occurs at q = 30, with min LAC = \$12). Questions 1 through 6 concern this firm and this industry. 1.
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TEST2A.2006 - ECMA04H Second Term Test Professors Michael...

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