ECO 550 Final Exam 3

ECO 550 Final Exam 3

Question 1

5 out of 5 points

          Evidence from empirical studies of short-run cost-output relationships lends support to the:

Answer                                   

            Selected Answer:           

hypothesis that total costs increase linearly over the range of output examined

Correct Answer:             

hypothesis that total costs increase linearly over the range of output examined

 Question 2

5 out of 5 points

          Break-even analysis usually assumes all of the following except:

Answer                                   

            Selected Answer:           

in the short run, there is no distinction between variable and fixed costs.

Correct Answer:             

in the short run, there is no distinction between variable and fixed costs.

 Question 3

5 out of 5 points

          In determining the shape of the cost-output relationship only ____ depreciation is relevant.

Answer                                   

            Selected Answer:           

usage

Correct Answer:             

usage

 Question 4

5 out of 5 points

          In the linear breakeven model, the breakeven sales volume (in dollars) can be found by multiplying the breakeven sales volume (in units) by:

Answer                                   

            Selected Answer:           

selling price per unit

Correct Answer:             

selling price per unit

 Question 5

5 out of 5 points

          A firm in pure competition would shut down when:

Answer                                   

            Selected Answer:           

price is less than average variable cost

Correct Answer:             

price is less than average variable cost

 Question 6

5 out of 5 points

          Buyers anticipate that the temporary warehouse seller of unbranded computer equipment will

Answer                                   

            Selected Answer:           

produce only one quality

Correct Answer:             

produce only one quality