Econ Final Exam (Test 1 and 2) UPDATED Actual Exam Questions and CORRECT Answers
1 view 0 purchase
Course
Econ
Institution
Econ
Econ Final Exam (Test 1 and 2) UPDATED
Actual Exam Questions and CORRECT
Answers
Belinda is the owner of a department store. Last year her total revenue was $525,000 and her
total labor costs were $200,00. Her overhead expenses, including insurance and legal fees,
were $175,000. The rent o...
Econ Final Exam (Test 1 and 2) UPDATED
Actual Exam Questions and CORRECT
Answers
Belinda is the owner of a department store. Last year her total revenue was $525,000 and her
total labor costs were $200,00. Her overhead expenses, including insurance and legal fees,
were $175,000. The rent on the building was $45,000. Belinda could earn $105,000 per year
working at a nearby department store. If her total revenue increases to $600,000 this year and
all of her other expenses are held constant we know that her economic profit is now -
CORRECT ANSWER✔✔- $75,000
A firm's production function is similar to a recipe used to make a cake in the sense that the
production function shows the combination of _________ used to produce ________. -
CORRECT ANSWER✔✔- inputs ; outputs
If a firm hires another worker and her marginal product of labor is negative, we know that the
firm's total out is - CORRECT ANSWER✔✔- decreasing
In the accompanying table, diminishing marginal product begins after the _______ unit of
output. (Ex 2. 4) - CORRECT ANSWER✔✔- second
Assume that a firm hires an additional employee. If the marginal product for that employee is
greater than for the previous employee hired, it must be because - CORRECT ANSWER✔✔-
there are gains from specialization
Kareem's AFC was ________ per bike. (Ex 2, 6) - CORRECT ANSWER✔✔- $375
If the marginal cost curve is U-shaped - CORRECT ANSWER✔✔- there are productivity
gains from specialization before diminishing marginal product sets in.
Samantha owns a gas station. If she moves into a larger lot but finds that her average costs
have increased in the long run, we know that Samantha is experiencing - CORRECT
ANSWER✔✔- diseconomies of scale.
, In competitive markets - CORRECT ANSWER✔✔- buyers can expect to find consistently
low prices and wide availability of the goods that they want.
Firms in every market structure - CORRECT ANSWER✔✔- will attempt to maximize
profits.
If this firm is maximizing profits, total revenue is represented by the area (Ex 2 11) -
CORRECT ANSWER✔✔- A x C
A company produces at an output level where marginal revenue is equal to marginal cost and
has the following revenue and cost levels:
Marginal cost curve intersects the AVC curve at $140.
Marginal cost curve intersects the ATC curve at $150.
Marginal cost curve intersects the marginal revenue curve at $200.
What do you suggest this firm should do in the short run? - CORRECT ANSWER✔✔- The
firm should continue to produce at a profit level of $50 per unit.
What should a firm in a competitive market do if there is no possible output where the price
would at least be equal to average variable costs? - CORRECT ANSWER✔✔- The firm
should shut down in the short run.
A firm would be making positive profits if the price is (Ex 2 14) - CORRECT ANSWER✔✔-
above $5
A firm would shut down in the short run if the price is (Ex 2 15) - CORRECT ANSWER✔✔-
below $4
It's easy to determine if a firm is making long-run production decisions by looking at its cost
structure because, in the long run, a firm does not have any _____ costs. - CORRECT
ANSWER✔✔- fixed
You shop at the local drugstore because it is convenient. This situation is best described as -
CORRECT ANSWER✔✔- monopolistic competition with differentiation by location.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller MGRADES. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.99. You're not tied to anything after your purchase.
