ECON 221 Final UPDATED Actual Exam Questions and CORRECT Answers
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Course
ECON 221
Institution
ECON 221
ECON 221 Final UPDATED Actual Exam
Questions and CORRECT Answers
Jill operates her pizza building. Similar buildings rent for for $4000 a month. Jill wants to sell
it and rent space for $3000 per month. She decides not to. She reasons I don't pay any rent
now and don't want to see my costs r...
ECON 221 Final UPDATED Actual Exam
Questions and CORRECT Answers
Jill operates her pizza building. Similar buildings rent for for $4000 a month. Jill wants to sell
it and rent space for $3000 per month. She decides not to. She reasons I don't pay any rent
now and don't want to see my costs rise by $3000. What do you think of her reasoning? -
CORRECT ANSWER- ✔✔Jill is incorrectly ignoring the opportunity cost of using the
building she owns
Average fixed costs of production - CORRECT ANSWER- ✔✔falls as long as output is
increased
As the level of output increases, the difference between the value of average total cost and
average variable cost - CORRECT ANSWER- ✔✔decreases because average fixed cost
decreases as output increases
Assuming that the cost curves have the usual shape, the dollar difference between average
total cost and average variable costs ______ as output increases - CORRECT ANSWER-
✔✔decreases
Southwest signs a new contract with the Transport Workers Union that requires the airline to
increases wages for its flight attendants. Marginal cost would ______, AVC would ____, AFC
would ____ and ATC would ____ - CORRECT ANSWER- ✔✔increase, increase, remain
unchanged, increase
The federal gov't starts to levy a $20 per passenger carbon emissions tax on all commercial
air travel. MC would __, AVC would __, AFC would ___ and ATC would ___ - CORRECT
ANSWER- ✔✔increase, increase, remain unchanged, increase
Southwest decides on an across the board 10% cut in executive salaries. MC would__, AVC
would___, AFC would ___ and ATC would ___ - CORRECT ANSWER- ✔✔remain
unchanged, remain unchanged, decrease, decrease
Southwest decides to double its television advertising budget. MC would __, AVC would __,
AFC would __ and ATC would__ - CORRECT ANSWER- ✔✔remain unchanged, remain
unchanged, increase, increase
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