Econ 101 prelim2 2004 - Economics 101 Introductory...

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Economics 101 Introductory Microeconomics Prelim 2 READ THIS FIRST. NAME : fill in your name LAST NAME FIRST . IDENTIFICATION NUMBER spaces A to F: fill in your 6-digit CU identity number . USE THE ANSWER SHEET PROVIDED. NO BOOKS, NOTES OR PROGRAMMABLE CALCULATORS, PERSONAL DIGITAL ASSISTANTS, CELL PHONES OR OTHER ELECTRONIC DEVICES ARE ALLOWED. ALL VIOLATIONS OF THIS RULE WILL RESULT IN IMMEDIATE CONFISCATION OF THE EXAM AND INITIATION OF A HEARING UNDER THE CORNELL CODE OF ACADEMIC INTEGRITY. ONLY A $1.00 CALCULATOR THAT ADDS, SUBTRACTS, MULTIPLIES AND DIVIDES AND A STRAIGHTEDGE (RULER) ARE PERMITTED. USE A NUMBER 2 PENCIL. THERE ARE 25 QUESTIONS . ALL QUESTIONS HAVE THE SAME WEIGHT (4 POINTS). NEITHER THE INSTRUCTOR NOR THE PROCTORS WILL ANSWER ANY QUESTIONS DURING THE EXAM. CHOOSE THE BEST POSSIBLE ANSWER FOR EACH QUESTION. THERE IS A 90 MINUTE TIME LIMIT. Glossary of abbreviations: MC: marginal cost MB: marginal benefit MR: marginal revenue P: price Q: quantity S: supply D: demand CS: consumer surplus PS: producer surplus TC: total costs VC: variable costs FC: fixed costs ATC: average total cost AVC: average variable cost AFC: average fixed cost 1. A firm’s average total cost is $80/unit, its average variable cost is $75/unit, and its output is 50 units. Its total fixed costs are A. less than $10. B. between $10 and $100. C. between $100 and $200. D. between $200 and $300. E. more than $300. 2. In a double-auction market 3. Free entry and exit means that 4. Marginal cost is equal to average total cost when 5. For a competitive firm, profit maximization occurs when A. price equals marginal revenue. B. price equals marginal cost. C. marginal revenue equals total cost. D. marginal cost equals total cost. E. total revenue equals total cost.
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