MGEC38H3 Study Guide - Midterm Guide: Economic Equilibrium, Demand Curve, Scantron Corporation


Department
Economics for Management Studies
Course Code
MGEC38H3
Professor
Gordon Cleveland
Study Guide
Midterm

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ECMA04H
Second Term Test – November 17, 2010 Time: 90 minutes
Prof. Gordon Cleveland
Version A
Instructions: PLEASE READ CAREFULLY
1. On the Scantron answer sheet, you must
PRINT your last name and first name
enter your student number as the identification number
FILL IN THE BUBBLES under your name and student number
FILL IN THE BUBBLE ASSOCIATED WITH YOUR TEST VERSION
NOTE - THIS IS VERSION A
2. If you fail to carry out all the tasks indicated in part 1, 4 marks will be deducted
from your final score.
3. This exam consists of 25 multiple choice questions (and a 26th which will
confirm your exam version). For each question, choose the correct answer. If two
multiple choice answers both seem to be approximately correct, choose the best of
the two answers. Enter the answers to the multiple choice questions on the
Scantron sheet provided to you by filling in the appropriate bubble. If
answers are not written on this sheet, there will be no marks given for
answers. Each correct answer is worth 4 marks (except for question 26, where the
correct answer simply confirms your exam version); incorrect answers receive 0
marks.
4. When entering your answers on the Scantron sheet:
Use a medium (HB) pencil (do not use a red pen)
Fill in the bubble neatly and completely (this is important)
Erase any changes as completely as possible
Be very careful to place each answer in the correct place
Note: this exam consists of 7 pages, including this cover page. Make sure that all 7
pages are included in your exam, and notify an invigilator immediately if any are
missing.

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ECMA04 SECOND TERM TEST November 17, 2010
This term test consists of 25 questions. Answer each question by choosing the best alternative
and indicating your choice by filling in the appropriate bubble on the Scantron sheet - it is the
only thing you will turn in at the end of the exam. You may take the rest of the exam away with
you, so you can use the fronts and back of these pages for your rough work. If you wish to keep a
record of your answers, make a note of them on the exam question sheet. The answer sheet
(Scantron) will not be returned to you, but the answers will be posted on the course website and
the Intranet. Each correct answer is worth 4 marks (there is no deduction for wrong answers).
1-3. In the long run, a firm producing skyhooks has the following production function:
q = 10KL/(K+L)
where q is output, K is physical capital, and L is labour. In the short run, the firm has plant and
equipment that in total account for 20 units of physical capital. Questions 1 through 3 concern
this firm.
1. Suppose that the price of labour is $16 per unit and the price of capital is $24 per unit. In the
short run, when L=20, the average cost (also called the average total cost) (computed to the
nearest penny) is:
A) $4.00 B) $4.50 C) $5.00 D) $6.00 E) $7.50 F) $8.00
G) $9.00 H) $10.00 I) $10.50 J) none of the above
2. Suppose that the price of labour is $16 per unit and the price of capital is $24 per unit. In the
short run, when L=20, the marginal cost (computed to the nearest penny) is:
A) $2.50 B) $3.20 C) $4.00 D) $5.60 E) $6.40 F) $7.50
G) $8.40 H) $9.60 I) $10.00 J) none of the above
3. In the short run, when L=20, the marginal product of labour is:
A) 1.6 B) 2.5 C) 2.8 D) 3.0 E) 3.4 F) 3.6
G) 4.2 H) 4.8 I) 5.4 J) none of the above
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