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Name: ________________________ Class: ___________________ Date: __________ ID: A 4 Practice Quiz 5 (Chapters 13-14) Multiple Choice Identify the choice that best completes the statement or answers the question. Scenario 13-5 Samantha has been working for a law firm and earning an annual salary of \$80,000. She decides to open her own practice. Her annual expenses will include \$15,000 for office rent, \$3,000 for equipment rental, \$1,000 for supplies, \$1,200 for utilities, and a \$35,000 salary for a secretary/bookkeeper. Samantha will cover her start-up expenses by cashing in a \$20,000 certificate of deposit on which she was earning annual interest of \$500. ____ 1. Refer to Scenario 13-5. Samantha's annual accounting costs will equal a. \$55,200. b. \$75,200. c. \$80,500. d. \$165,700. ____ 2. Refer to Scenario 13-5 . In producing the 7,000 staplers, the firm's average fixed cost was a. \$1.00 b. \$1.32 c. \$2.21 d. \$2.43 ____ 3. Refer to Scenario 13-5 . In producing the 7,000 staplers, the firm's average total cost was a. \$5.00 b. \$5.42 c. \$6.21 d. \$6.43 ____ 4. Refer to Scenario 13-5 . The firm's accounting profit for the year was a. \$-3,000. b. \$-5,000 c. \$7,000. d. \$17,000. ____ 5. When the marginal product of an input declines as the quantity of that input increases, the production function exhibits a. increasing marginal product. b. diminishing marginal product. c. diminishing total product. d. Both b and c are correct.

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Name: ________________________ ID: A 2 ____ 6. Marginal cost equals (i) change in total cost divided by change in quantity produced. (ii) change in variable cost divided by change in quantity produced. (iii) the average fixed cost of the current unit. a. (i) and (ii) only b. (ii) and (iii) only c. (i) only d. (i), (ii), and (iii) Table 13-10 Jimmy’s Gigaplots Factory Quantity of gigaplots Fixed Cost Variable Cost Total Cost Average Fixed Cost Average Variable Cost Average Total Cost Marginal Cost 1 \$13 \$38 2 \$28 3 \$70 4 \$64 5 \$110 6 \$108 7 \$133 8 \$185 ____ 7. Refer to Table 13-10. What is the average variable cost of producing 6 gigaplots at Jimmy's Gigaplot factory? a. \$16 b. \$17 c. \$18 d. \$19 ____ 8. Refer to Table 13-10. What is the average total cost of producing 6 gigaplots at Jimmy's Gigaplot factory? a. \$16.34 b. \$22.00 c. \$22.17 d. \$22.57 ____ 9. Jennifer is a junior in college. Her current cumulative grade point average (GPA) is 3.5 out of a 4.0 scale. Jennifer is hoping that by the time she graduates, she can raise her cumulative GPA to a 3.7. Which of the following statements is correct? a. If Jennifer earns between a 3.5 and a 3.7 GPA in her senior year, she will be able to raise her cumulative GPA to a 3.7. b. If Jennifer earns a 3.7 GPA in her senior year, she will be able to raise her cumulative GPA to a 3.7. c. Jennifer must earn above a 3.7 GPA in her senior year in order to raise her cumulative GPA to a 3.7. d. Either b or c could be correct.
Name: ________________________ ID: A 3 ____ 10. If marginal cost is equal to average total cost, then a. marginal cost is minimized. b. average total cost is minimized.

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## This note was uploaded on 01/25/2012 for the course ECON 2106 taught by Professor Minjaesong during the Fall '06 term at Georgia Institute of Technology.

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