OT...OT...would someone help me help a friend study for an Econ test...please answer the following..
20) If the supply of a product decreases and the demand for that product
simultaneously increases, we can conclude that equilibrium;
(a) price must rise, but equilibrium quantity may either rise, fall,
or remain unchanged.
(b) price must rise and equilibrium quantity must fall.
(c) price and equilibrium quantity must both increase.
(d) price and equilibrium quantity must both decline.
(e) quantity must decrease, but equilibrium price may either rise,
fall, or remain unchanged.
21', Given a downsloping demand curve and an upaloping supply curve for a
product, the imposition of an exercise tax on this product will:
(a) increase equilibrium price and quantity.
(b) decrease equilibrium price and quantity.
(c) decrease equilibrium price and increase equilibrium quantity.
(d) increase equilibrium price and decrease equilibrium quantity.
(e) have no impact upon equilibrium price and quantity.
(Advanced analysis) Answer the next question(s) on the basis of the following information. The demand for commodity X is represented by the equation P = 10 -0.2Q and supply by the equation P 2 + 0.2Q.
22. Refer to the above information. The equilibrium quantity is:
(a) 10.
(b) 20.
(C) 15.
(d) 30.
(e) 45.
2311 The income and substitution effects explain why:
(a) the elasticity of demand can be unity.
product demand curves are downsloping.
(c) product supply curves are upsloping.
(d) equilibrium is always achieved in a competitive market.
48) Which of the following is not correct?
(a) Where marginal product is greater than average product, average product is rising.
(b) Where total product is at a maximum, average product is also at a maximum.
(c) Where marginal product is zero, total product is at a maximum.
(d) Marginal product becomes negative before average product becomes negative.
49:~ Average fixed cost:
(a) is intersected by marginal cost at its minimum point.
(b) may be found for any output by adding average variable cost and average total cost.
(c) graphs as a U-shaped curve.
(d) declines so long as output increases.
50) Which of the following is correct?
(a) Average variable cost intersects marginal cost at the latter's
m . inimum point.
(b) Marginal cost intersects average total cost at the latter's
minimum point.
(c) Average fixed cost intersects marginal cost at the latter's minimum point.
(d) Marginal cost intersects average fixed cost at the latter's minimum point.
51) Assume that in the short run a firm which is producing 100 units of
output has average total costs of $200 and average variable costs of
$150. The firm's total fixed costs are:
(a) $5,000.
(b) $500.
(c) $.50.
(d) $50.
52) If the total variable cost of 9 units of output is $90 and the total
variable cost of 10 units of output is $120, then:
(a) the average variable cost of 10 units is $12.
(b) the average variable cost of 9 units is $10.
(c) the marginal cost of the tenth unit is $30.
(d) the firm is operating in the range of diminishing marginal returns.
(e) all of the above are true.54) Economies and diseconomies of scale explain: the profit-maximizing level of production. why the firm's long-run average total cost curve is U-shaped. (c) why the firm's short-run marginal cost curve cuts the short-run average variable cost curve at its minimum*point. (d) the distinction between fixed and variable costs.
55) Diseconomies of scale arise primarily because:
(a) the short-run average total cost curve rises when marginal
product is increasing.
(b) of the difficulties involved in managing and coordinating a large
business enterprise.
(c) firms must be large both absolutely and relative to the market in
order to employ the most efficient productive techniques
available.
(d) beyond some point marginal product declines as additional units
of a variable resource (labor) are added to a fixed resource
(capital).
56) If a firm increases all of its inputs by 10 percent and its output
increases by 15 percent, we can say that:
(a) it is encountering diseconomies Of scale.
(b) it is encountering economies of scale.
(c) the law of diminishing returns is.taking hold.
(d) the firm's long-run ATC curve will be rising.
57) Which of the following is not a basic characteristic of pure
competition?
(a) considerable nonprice competition
(b) no barriers to the entry or exodus of firms
(c) a standardized or homogeneous product
(d) a large number of buyers and sellers
58) Price is constant or "given" to the individual firm selling in a
purely competitive market because:
(a) the firm's demand curve is downsloping.
(b) of product differentiation reinforced by extensive advertising.
(c) each seller supplies a negligible fraction of total supply.
(d) there are no good substitutes for its product.
60 A competitive firm in the short run can determine the
profit-maximizing (or loss-minimizing) output by equating:
(a) price and average total cost.
(b) price and average fixed cost.
(c) marginal revenue and marginal cost.
(d) price and marginal revenue.
61) In the short run a purely competitive firm which seeks to maximize
profits will produce:
(a) where the demand and the ATC curves intersect.
(b) where total revenue exceeds total cost by the maximum amount.
(c) that output where economic profits are zero.
(d) at any point where the total revenue and total cost curves
intersect.
62) Assume the XYZ Corporation is producing 20 units of output. It is
selling this output in a purely competitive market at $10 per
unit.
its total fixed costs are $100 and its average variable cost is $3
at
20 units of output. On the basis of this information we can say
that
the corporation:
(a) should close down in the short run.
(b) is maximizing its profits.
(c) is realizing a loss of $60.
(d) is realizing an economic profit of $40.
63) A purely competitive firm's short-run supply curve is:
(a) perfectly elastic at the minimum average total cost.
(b) upsloping and equal to the portion of the marginal cost curve
which lies above the average variable cost curve.
The demand curve in a purely competitive industry is while
the demand curve to a single firm in that industry is
,(a) perfectly inelastic, perfectly elastic
(b) downsloping, perfectly elastic
(c) downsloping, perfectly inelastic
(d) perfectly elastic, downsloping
Thanks in advance and sorry for being a bother,
Grant |
