Mock Exam Two with Solutions

Mock Exam Two with Solutions - Microeconomics Review...

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Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Kirsten sells 300 glasses of lemonade at $0.50 each. Her total costs are $125. Her profits are a. $25. b. $124.50. c. $125. d. $150. ____ 2. Jane decides to open her own business and earns $50,000 in accounting profit the first year. When deciding to open her own business, she turned down three separate job offers with annual salaries of $30,000, $40,000, and $45,000. What is Jane's economic profit from running her own business? a. $-55,000 b. $-5,000 c. $5,000 d. $20,000 ____ 3. Suppose that for a particular business there are no implicit opportunity costs. Then a. accounting profit will be greater than economic profit. b. accounting profit will be the same as economic profit. c. accounting profit will be less than economic profit. d. the relationship between accounting profit and economic profit cannot be determined without more information. ____ 4. Marginal cost is equal to average total cost when a. average variable cost is falling. b. average fixed cost is rising. c. marginal cost is at its minimum. d. average total cost is at its minimum . ____ 5. Which of the following is not a property of a firm's cost curves? a. Marginal cost must eventually rise as a result of diminishing marginal product. b. Average total cost is U-shaped. c. Economies of scale will exist when average total cost falls as output rises. d.
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This note was uploaded on 12/02/2011 for the course ECON 200 taught by Professor Vincent during the Fall '08 term at Maryland.

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Mock Exam Two with Solutions - Microeconomics Review...

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