ECON 101 Midterm: ECON 101 IA State Exam4A S2001

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turquoisegnu128

31 Jan 2019

School

Iowa State University

Department

Economics

Course

ECON 101

Professor

All

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Document Summary

S (elasticity of scale) > 1: what is the shutdown rule for a firm in the short-run? a. a. a. In the short-run, the firm should continue to produce if marginal revenue (mr) is equal to marginal cost (mc); otherwise, it should shut down. In the short-run, the firm should continue to produce if total revenue (tr) exceeds total costs (tc); otherwise, it should shut down. In the short-run, if some fixed costs are not sunk, the firm should continue to produce if (tr - tvc) > (tfc - sunk fixed costs) > 0; otherwise, it should shut down. Mppx1 w2 w1 w1 w2 (cid:1) mrsx1 x2 (cid:1) X2 both a and b a, b, and c a. c. a. a: consider two perfectly competitive firms with the following marginal cost functions. What is the supply equation for firm 2? a. a. a. a. a. y2 (cid:1) y2 (cid:1)

Related Questions

1. Marginal cost may be defined as

a. the change in average total cost that results from producing one more unit of output

b. the change in average variable cost that results from producing one more unit of output.

c. the change in total cost that results from producing one more unit of output.

d. the rate of change in total fixed cost that results from producing one more unit of output.

2. If fixed cost is $5,000, and, at an output of 3 variable costs is $4,000, how much is the average total cost at an output of 3?

a. $1,333.33

b. $3000.00

c. $4500.00

d. $9000.00

3. A production function shows a firm how to _____________.

a. maximize profits

b. maximize output

c. minimize losses

d. minimize output

ceruleanseal203

5. We would expect that a fall in the labor supply will have a proportionately smaller effect on the market wage rate when:

a. workers can easily be replaced by capital goods

b. the product is produced in a perfectly competitive industry

c. the product produced in the industry has very few substitutes

d. labor represents a relatively small portion of total costs

4. Suppose a new technology allows firms to substitute mechanical tomato pickers for farm laborers. As a result, the demand curve for farm laborers will:

a. become less elastic

b. become more elastic

c. shift to the right

d. not be affected

3. What does the marginal physical product equal when the amount of labor goes from 10 to 11?

Labor input (workers/day)_____ total physical product (output/day)

10 ________________________500

11_________________________600

12________________________ 690

13 ________________________760

14 ________________________800

a. 54.5

b. 100

c. 600

d. 500

1. A farm's marginal factor cost describes:

a. the change in total foxed cost that reseults from hiring one more unit of input

b. the increase in the firm's total revenue as one more unit of output is sold

c. the change in total variable cost that results from th production of an extra unit of output

d. the change in total cost that results from using one more unit of an input

redmammoth172

1. Fixed costs of production in the short run:

A. Cannot be reduced by producing less output

B. Are a function of the level of variable costs

C. Are low in proportion to variable costs in the short run

D. Increase as the firm produces more output

2. Marginal cost can be defined as the:

A. Change in total fixed cost resulting from one more unit of production

B. Change in total cost resulting from one more unit of production

C. Change in average total cost resulting from one more unit of production

D. Change in average variable cost resulting from one more unit of production

3. Which of the following is true under conditions of pure competition?

A. There are differentiated products

B. The market demand curve is perfectly elastic

C. No single firm can influence the market price by changing its output

D. Each individual firm has the ability to set its own price

crimsonalligator541

ECON 101 Midterm: ECON 101 IA State Exam4A S2001

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