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Unformatted text preview: Sample Midterm #1 1.
A profit maximizing firm will supply an extra unit of output if:
Marginal revenue is positive.
The opportunity cost is positive.
Marginal revenue exceeds marginal cost.
Marginal revenue exceeds marginal cost, but only if the firm is operating in a purely
Total revenue is positive. 2.
The demand for gasoline is probably ____ elastic than the demand for Chevron gasoline.
Gasoline and Chevron gasoline have the same price elasticity of demand.
The two cannot be compared because not all consumers can purchase Chevron
Referring to figure 2.1, at a price of $70, the amount of consumer surplus is:
Based on mercantilist thinking, governments should
subsidize and encourage imports.
allow for free trade unencumbered by government regulations and restrictions.
subsidize and encourage exports.
both (a) and (b). 2 FBE 462
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This note was uploaded on 02/15/2011 for the course FBE 462 at USC.