Question 2 A production with the form Q = 150L.75 K.50 will have __________ in the long run. A. increasing returns to scale B. decreasing returns to scale C. constant returns to scale D. diminishing returns to the variable input Question 3 If the demand for product A displays high and positive cross-price elasticity with respect to the price of product B, then: A. the demand for product A is likely to have a low price elasticity. B. products A and B are substitutes. C. products A and B are complements. D. the demand for product B is likely to have a low price elasticity. Question 4 Assume SeatComfy Inc. produces table and chairs with the following total cost function TC=10,000+10Q+0.1Q2 in which Q=quantity of chairs produced. If SeatComfy can sell as many chairs it wishes at the current market price of $45, how many chairs should it produce to maximize its short-run profits? A. 350 B. 700 C. 175 D. 45 Question 5 The Marginal Product curve of input Y shows: A. how the quantity of output produced changes for each amount of input Y, whether or not all other inputs are held constant. B. how the quantity of output produced changes for each amount of input Y, holding all other inputs constant. C. how the average quantity of output produced varies with input Y, whether or not all other inputs are held constant. D. how the average quantity of output produced varies with input Y, holding all other inputs constant. Question 6 A production with the form Q = 40 L.75 K.20 will have __________ in the long run. A. increasing returns to scale B. decreasing returns to scale C. constant returns to scale D. diminishing returns to the variable input Question 9 Assume your company produces good X using only two inputs, capital (K) and labor (L). Also, assume L is measured on the vertical axis and K on the horizontal axis. If the prices of inputs are PK=$30 and PL=15 and your company is behaving efficiently, what is the slope of the isoquant at the current input mix? A. -2 B. -1/2 C. 2 D. 1/2 Question 10 BrightLight Ltd. estimates the demand curve for its table lamps to be Q = 1,000 - 4 P. That is, P = 250- .25Q. Which of the following is false? A. The maximum total revenue BrightlLight can obtain is $62,500. B. The Marginal Revenue curve for BrightLight's table lamps is given by MR = 250 - ½ Q. C. The elasticity of demand for BrightLight's table lamps is equal to 7.5 when their price is $125. D. BrightLight maximizes its total revenues when selling 500 lamps. Part-III. Question 3 If Tiger Toys faces a demand curve of P = 85 - .25Q and a MC = ATC = 20, then the output would be: A. 65 units. B. 85 units. C. 130 units. D. 32.5 units. Question 6 If Tiger Toys faces a demand curve of P = 85 - .25Q and a MC = ATC = 20, then the economic profits would be: A. $130.00. B. $6,825.00. C. $2,600.00. D. $4,225.00. Question 7 If Tiger Toys faces a demand curve of P = 85 - .25Q and a MC = ATC = 20, then the markup would be: A. $52.50. B. $20.00. C. $32.50. D. $65.00. Question 11 What happens to producer surplus and consumer surplus if transactions costs are reduced? Question 12 Dan Davis of VIP Inc, is owner and CEO of a company, who has successfully led the company through his decision making over the years. He is retiring at the end of this year, and does not intend to change any aspects of decision making, rewards, or performance evaluation in VIP Inc, What will happen to the company? Why? Please check the questions if data is same.  |
