quiz 2 practice questions

quiz 2 practice questions - Quiz #2 Practice Questions 1....

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Quiz #2 Practice Questions 1. Consider a firm under perfect competition. The cost function of a firm is: TC(q)= 3 + q 2 When the output is 10 a. The fixed cost is 0, the average variable cost is 10. b. The fixed cost is 3, the average variable cost is 10. c. The fixed cost is 3, the average variable cost is 100. d. The fixed cost is 0, the average variable cost is 100. 2. The above cost function means that the firms marginal cost is: MC(q)= 2q If the firm is in a perfectly competitive industry and is producing a positive amount, then for this firm: a. P=MC b. MC=MR c. P>=AVC d. All of the above 3. If the price is $10 this firm will produce: a. 10 units b. 20 units c. 5 units d. zero units 4. If the price is $10 per unit, the firm will be making: a. zero profits b. positive profits c. negative profits d. zero accounting profits.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Suppose printers are manufactured using capital (K) and labor (L). The following table has information on the production of printers per month when capital is fixed at K=5 units. Use the table to answer the questions below. Number of Workers Number of Printers 0 0 1 50 2 120 3 170 4 200 5. Diminishing marginal productivity sets in at: a. 1 worker b. 2 workers c. 3 workers d. 4 workers 6. Which of the following is correct: a. TFC(50 printers)=TFC(120 printers) and AFC(50printers)=AFC(120 printers). b. TFC(50 printers)=TFC(120 printers) and AFC(50printers)>AFC(120 printers). c. TFC(50 printers)>TFC(120 printers) and AFC(50printers)=AFC(120 printers). d. TFC(50 printers)>TFC(120 printers) and AFC(50printers)>AFC(120 printers). 7. Which of the following is true: a. When marginal cost is increasing it is necessarily above average variable costs. b. When average variable cost is increasing it is necessarily above marginal cost. c. When average variable cost is increasing it is necessarily below marginal cost. d. None of the above is true.
Background image of page 2
8. Use the following graph to answer the questions below: Points: 2 points each for a maximum of 10. 1. Diminishing Marginal Product sets in after the firm produces ____5__ units.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/04/2012 for the course ECON 010 taught by Professor Stein during the Fall '07 term at UPenn.

Page1 / 10

quiz 2 practice questions - Quiz #2 Practice Questions 1....

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online