test2a-07 - Economics 120 Test 2 Friday, November 2, 2007,...

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Economics 120 Test 2 – Friday, November 2, 2007, 3 – 4:30 pm. Name:_________________________________ ______________________________________ (first name) (last name) ID number:_________________________ Section: ___ Instructor:________________________ 1. On the FRONT of your computer card use a dark lead pencil to PRINT the following instructor’s name, section letter (next to class), time/day of your section WLU ID number starting at far left column ( FILL IN BOXES UNDER EACH NUMBER ) UW students add a 0 to the end of your 8 digit UW ID number last name, empty space, first name starting at far left column ( FILL IN BOXES UNDER EACH LETTER ) 2. On the BACK of your computer card use a dark lead pencil to Print your ID number starting at far left column ( FILL IN BOXES UNDER EACH NUMBER ) UW students add a 0 to the end of your 8 digit UW ID number Fill in box A in the column marked “Test Form” Answer all 30 questions in Part A by completely filling in the box. If you change an answer then completely erase your previous answer. 3. You have 90 minutes. No student may leave before 4 pm. Hand in the computer card and the exam paper. 4. There are 30 multiple-choice questions in Part A . You will be given one mark for each correct answer and zero marks for missing, incorrect or multiple answers. There are 4 questions in Part B worth a total of 30 marks. Answer Part B on this question paper. 5. Non-programmable calculators are allowed. Dictionaries are not allowed. Section A B C D E F G Day/time Tu.Th 10:00 Tu.Th 11:30 Tu.Th.1:0 0 Tu.Th 2:30 MW 2:30 MW 4:00 W 7:00 Instructor Ziss Jefferson Gallego Gallego Esuola Esuola Webb Correctly filled out front of form Correctly filled out back of form EC120 Test 2 – Fall 2007 1 of 16
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Part A: Answer each question by marking the computer card with the best answer. 1. Sue runs a sewing store. Revenues are $120,000 per year and raw materials costs (cloth, thread) are $50,000 per year. Sue owns her own store and thus does not pay any rent. If she rented out her store she could earn $30,000 per year in rent. In order to run her business Sue had to give up a $20,000 per year job. Her annual accounting profits are __. Her annual economic profits are __. a) $70,000 $20,000 b) $70,000 $40,000 c) $70,000 $50,000 d) $40,000 $20,000 e) $20,000 $20,000 2. Which of the following statements about the relationship between marginal product (MP) and average product (AP) is correct? (Pick the best answer). a) If MP > AP then AP must be rising b) If AP > MP then MP must be rising c) If MP is falling then AP must be falling d) If AP = MP then MP is maximized e) Both a) and c) are correct 3. In the short-run an increase in the price of the variable factor with no change in productivity will (pick the best answer) a) cause the ATC curve to shift up b) cause the AFC curve to shift up c) not cause the MC curve to shift d) All of the above are correct e) Both a) and c) are correct 4. If the production function is given by Q = 0.5 K + 0.5 L then the production function exhibits ___ and thus the long-run cost function will exhibit ___.
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test2a-07 - Economics 120 Test 2 Friday, November 2, 2007,...

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