UA EC 110 - SAMPLE EXAM 3 (8 pages)

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SAMPLE EXAM 3



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SAMPLE EXAM 3

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Pages:
8
School:
University of Alabama
Course:
Ec 110 - Prin of Microeconomics

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Principles of Microeconomics EC 110 SAMPLE EXAM 3 ANSWERS TO MULTIPLE CHOICE QUESTIONS ARE FOUND AT THE END OF THE TEST NAME STUDENT NUMBER ROW NUMBER SEAT NUMBER 1 Economists assume that the goal of the firm is to maximize A total revenue B total profit C total costs D total satisfaction 2 If a perfectly competitive firm produces 100 units of a good and has marginal revenue of 5 00 what is the firm s total revenue A 5 B 100 C 50 D 500 3 Economies of scale occur when as output increases the A long run average cost increases B long run average cost decreases C short run average cost decreases D long run average cost stays constant 4 Which of the following measures of cost is best described as the increase in total cost that arises from an extra unit of production A variable cost B average variable cost C average total cost D marginal cost Accounting profit A factors in implicit costs as well explicit costs B factors in just explicit costs C factors in just implicit costs D factors in neither implicit nor explicit costs 6 The textile industry is composed of a large number of small firms In recent years these firms have suffered economic losses and many sellers have left the industry Therefore these conditions will A shift the demand curve outward so that price will rise to the level of production cost B cause the remaining firms to collude so that they can produce more efficiently C shift the market supply left and the price of textiles will rise D cause firms in the textile industry to suffer long run economic losses 7 An important implicit cost of almost every business is A the cost of labor B the cost of utilities used in the manufacturing process C the opportunity cost of financial capital that has been invested in the business D the cost of raw materials used to manufacture a product 8 Spring Hill Bottling Company has average variable costs of 6 and average total costs of 10 when it produces 1 000 units of bottled water The firm s total fixed costs equal A 2 000



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