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Final

ECON 1000 Study Guide - Final Guide: European Route E47, European Route E20


Department
Economics
Course Code
ECON 1000
Professor
All
Study Guide
Final

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PRACTICEQUESTION
MULTIPLECHOICE.Choosetheonealternativethatbestcompletesthestatementoranswers
thequestion.
1)Theshortrunisaperiodoftimeinwhich 1)_______
A)thequantitiesofsomeresourcesarefixed,andotherscanbe
varied.
B)theamountofoutputproducedisfixed.
C)thefirmisnotabletohiremoreworkers.
D)thereisashortageofmostresources.
E)Thereisnotenoughtimetomakeallofthedecisions.
2)Fixedinputsarethoseinputs 2)_______
A)thataretooexpensiveforthefirmtopurchase.
B)thatmustbeheldinstorageforatleastoneyear.
C)inwhichthemarginalproductofthelastunitoftheinput
employedexceedsthemarginalproductofthepreviousunit.
D)whichcanbepurchasedonlyinfixedquantitylots(e.g.,200ata
time).
E)whosequantityusedcannotbechangedintheshortrun.
3)Whichofthefollowinginputsisusuallyanexplicitcosttoafirm? 3)_______
A)capital
B)labour
C)asunkcost
D)alloftheabove
E)noneoftheabove
Usethetablebelowtoanswerthefollowingquestion(s).
Table10.1
4)RefertoTable10.1whichrepresentsSwankyʹstotalproductcurve.The
marginalproductthatwouldbeproducedifthefirmemployedfour
workersis
4)_______
A)6. B)2.C)9. D)4.E)7.

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5)Thelawofdiminishingmarginalreturnsstates: 5)_______
A)asafirmusesmoreofavariableinput,giventhequantityoffixed
inputs,itsaveragecosteventuallydecreases.
B)asthesizeofaplantincreases,itsmarginalproducteventually
decreases.
C)asthesizeofaplantincreases,itsaveragecosteventually
decreases.
D)asafirmusesmoreofavariableinput,giventhequantityoffixed
inputs,itsmarginalproducteventuallydecreases.
E)asafirmusesmoreofafixedinput,giventhequantityofvariable
inputs,itsmarginalproducteventuallydecreases.
Usethetablebelowtoanswerthefollowingquestion(s).
Table10.5
6)RefertoTable10.5,whichrepresentsSwankyʹsshort-runtotalcost
schedule.Theaveragefixedcostofproducing9sweatersperdayis
6)_______
A)$1.11.
B)$1.25.
C)$2.22.
D)$10.00.
E)$1.54.
7)RefertoTable10.5,whichrepresentsSwankyʹsshort-runtotalcost
schedule.Theaveragetotalcostofproducing16sweatersperdayis
7)_______
A)$5.51.
B)$2.
C)$7.50.
D)$5.
E)$3.33.
8)RefertoTable10.5,whichrepresentsSwankyʹsshort-runtotalcost
schedule.Whenoutputgoesupfrom4to9sweaters,themarginalcost
ofoneofthe5sweatersis
8)_______
A)$5.
B)$4.25.
C)$25.
D)$4.
E)$6.25.

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9)Marginalcostiscalculatedas 9)_______
A)theincreaseintotalcostdividedbytheincreaseinlabourinput,
giventheamountofcapital.
B)totalcostdividedbyoutput.
C)totalvariablecostminustotalfixedcost.
D)theincreaseintotalcostdividedbytheincreaseinvariablecost.
E)theincreaseintotalcostdividedbytheincreaseinoutput.
10)Whichoneofthefollowingstatementsconcerningtheshort-runcost
curvesisfalse?
10)______
A)Theaveragefixedcostcurveisalwaysdownwardsloping.
B)TheaveragetotalcostcurveisU-shaped.
C)Whenmarginalcostisaboveaveragevariablecost,average
variablecostisrising.
D)Whenmarginalcostisaboveaveragetotalcost,averagetotalcost
isrising.
E)Themarginalcostcurvecutstheaveragevariableandaverage
totalcostcurvesattheirmaximumpoints.
11)Iftheaveragevariablecostofproducing10unitsis$18andtheaverage
variablecostofproducing11unitsis$20,weknowthat,between10and
11unitsofoutput,
11)______
A)thereisexcesscapacity.
B)marginalcostisincreasing.
C)averagetotalcostisincreasing.
D)diminishingreturnshavenotsetin.
E)thereareincreasingreturnstoscale.
12)Whichofthefollowingbusinessquotesbestillustratestheideaof
averagecost?
12)______
A)ʺMyprimarysourceofoverheadcostisthecostofrunningthe
headoffice.ʺ
B)ʺAsweincreaseoutput,per-unitcostsfall.ʺ
C)ʺIfIdoublethenumberofworkersandtrucks,Igetonly80
percentmorepackagesdelivered.ʺ
D)ʺIfIneedto,Icannegotiatemoreovertimewithmyworkforceto
meetunexpectedorders.ʺ
E)noneoftheabove
13)TheATCcurveshiftsupwardif 13)______
A)anewtechnologyisintroduced.
B)moreworkersarehired.
C)factorpricesrise.
D)alloftheabove.
E)noneoftheabove.
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