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Post Mod3 Micro 2012 Final (1)

# Post Mod3 Micro 2012 Final (1) - Microeconomics Final Exam...

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Unformatted text preview: Microeconomics Final Exam STUDENT’S NAME : Eron Lindsey INSTRUCTIONS: 1. PLEASE PRINT YOUR NAME. 2. PRINT YOUR ANSWERS CLEARLY. MULTIPLE CHOICE QUESTIONS C_______1. An example of an opportunity cost that is also an implicit cost is a. a lease payment. b. the cost of raw materials. c. the value of the business owner’s time. d. All of the above are correct. Scenario 1 Joe wants to start his own business, which will require that he purchase a factory that costs \$400,000. Joe currently has \$500,000 in the bank earning 3 percent interest per year. C_______2. Refer to Scenario 1 . If Joe purchases the factory with his own money, what is the annual implicit opportunity cost of purchasing the factory? a. \$0 b. \$3,000 c. \$12,000 d. \$15,000 Table 1 Number of Workers Output Fixed Cost Variable Cost Total Cost \$50 \$0 \$50 1 90 \$50 \$20 \$70 2 170 \$50 \$40 \$90 3 230 \$50 \$60 \$110 4 240 \$50 \$80 \$130 C_______3. Refer to Table 1. The marginal product of the second worker is a. 90 units. b. 85 units. c. 80 units. d. 20 units. 1 B________4. Refer to Table 1. If the firm can sell its output for \$1 per unit, what is the profit-maximizing level of output? a. 240 units b. 230 units c. 190 units d. 170 units D________5. If a firm produces nothing, which of the following costs will be zero? a. total cost b. fixed cost c. opportunity cost d. variable cost C_________6. When a firm experiences diseconomies of scale, a. short-run average total cost is minimized. b. long-run average total cost is minimized. c. long-run average total cost increases as output increases. d. long-run average total cost decreases as output increases. A________7. Profit-maximizing firms in a competitive market produce an output level where a. marginal cost equals marginal revenue. b. marginal cost equals average total cost. c. marginal revenue is increasing. d. price is less than marginal revenue. Table 2 Quantity Total Revenue \$0 1 \$7 2 \$14 3 \$21 4 \$28 B________ 8 Refer to Table 2. For a firm operating in a competitive market, the price is a. \$0. b. \$7. c. \$14. d. \$21. 2 B________ 9. Refer to Table 2. For a firm operating in a competitive market, the marginal revenue is a. \$0. b. \$7. c. \$14. d. \$21. C_______ 10. A firm will shut down in the short run if the total revenue that it would get from producing and selling its output is less than its a. opportunity costs. b. fixed costs. c. Total variable costs. d. total costs. B________11. Suppose a firm in a competitive market reduces its output by 20 percent. As a result, the price of its output is likely to a. increase. b. remain unchanged. c. decrease by less than 20 percent. d. decrease by more than 20 percent. D________12. For a competitive firm, a. total revenue equals average revenue....
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Post Mod3 Micro 2012 Final (1) - Microeconomics Final Exam...

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