Practice Exam ECF1100
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Part A (21 Marks)
Answer all of the following multiple-choice questions in your answer book (not on this paper). Each question is worth 1 mark. Clearly number all the questions and write your answers in CAPITAL LETTERS.
For example your answers to this section should look like:
1. A
2. D
3. B
And so on....
Note that your answers should consist ONLY of the questions number and the letter of the answer you believe to be correct. NO explanations of answers will be taken into account in marking.
1) If a monopolist's price is $65 a unit and its marginal cost is $25 for the last unit produced, then: A) to maximise profit the firm should decrease output.
B) to maximise profit the firm should continue to produce the
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B) $900.
C) $700.
D) $300.
12) Suppose a firm has $1500 in variable costs and $500 in fixed costs when it produces 500 units of output and sells them for $50 per unit. If the price of the product drops to $4 each, should this firm continue operation in the short run?
A) Yes, because P > ATC.
B) No, because P < AVC.
C) No, because P < AR.
D) Yes, because P > AVC.
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13) For a competitive firm, let its total costs be TC = 48 + 2Q2, marginal costs MC = 4Q, average variable costs AVC = 2Q and average total costs ATC = 48/Q + 2Q. If market price is P = 24, which statement is true?
A) In the short run equilibrium Q = 6, MC = 24, AVC = 12 and ATC = 20.
B) In the short run equilibrium Q = 2, MC = 12, AVC = 6 and ATC = 22.
C) In the short run equilibrium Q = 4, MC = 24, AVC = 10 and ATC = 18.
D) In short run equilibrium Q = 6 and MC = P = AVC = 24.
14) Is a monopolistically competitive firm productively efficient?
A) It is not efficient, because it does not produce at minimum average total cost.
B) It is efficient, because price equals average total costs.
C) It is not efficient, because price is greater than marginal product.
D) It is efficient, because it produces where marginal cost equals marginal revenue.
15) On weekends, the local bakery sells baguettes for half the weekday price. This usually
leads to double the amount of purchases of baguette bread as
4. Based on your analysis in (1) – (3) above, what is your overall conclusion regarding the
c. Explain how the location of each curve graphed in question 7b would be altered if (1) total fixed cost had been $100
b. Then, we also determine the regression equation and correlation between North's engine cost and the average age of fleet. Please refer to Annex 3 for the QM results.
N 16. S 17. A 18. P 19. G 20.
A reaction has an equilibrium constant, Keq, of 50. When performed in the presence of an appropriate enzyme, the forward rate of reaction is increased 20-fold. What will happen to the reverse rate of reaction?
Q6a. You were instructed to use an inviscid flow model. Justify the use of that model for this calculation. (2 marks)
This is essentially what happens if one of the products is removed as soon as it is formed. If, for example, C is removed in this way, the position of equilibrium would move to the right to replace it. If it is continually
stock price of $6.50, and a volatility of 40% (as indicated in the assignment question), yields values of
c) What is the implied DSO at the end of March? At the end of June? What is the relationship between the DSO and the average collection period?
2) Calculate the a mean rate constant using orders of reactions and the rate equation allowing for the overall order or reaction to be found.
Q1. Use the Cyclic Innovation Model (Fig 1.9, pg 30) figure to illustrate the innovation process in this case and provide a brief description?
3. Assume that cost of goods sold for a company consists only of variable costs and gross margin is = (revenue – cost of goods sold)/revenue. Which of the following is true
[14]. Conditions for the existence and the uniqueness of an equilibrium for these models are investigated using