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ECO550 Final Part 1 Latest 2017 (Perfect Answer)
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Question 1

0 out of 4 points

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

a. existence of a non-linear cubic total cost function
b. hypothesis that marginal costs first decrease, then gradually increase over the normal operating range of the firm
c. hypothesis that total costs increase quadratically over the ranges of output examined
d. hypothesis that total costs increase linearly over some considerable range of output examined
e. none of the above

Question 2

0 out of 4 points

The short-run cost function is:

a. where all inputs to the production process are variable
b. relevant to decisions in which one or more inputs to the production process are fixed
c. not relevant to optimal pricing and production output decisions
d. crucial in making optimal investment decisions in new production facilities
e. none of the above

Question 3

0 out of 4 points

Which of the following is not an assumption of the linear breakeven model:

a. constant selling price per unit
b. decreasing variable cost per unit
c. fixed costs are independent of the output level
d. a single product (or a constant mix of products) is being produced and sold
e. all costs can be classified as fixed or variable

Question 4

4 out of 4 points

A ____ total cost function implies that marginal costs ____ as output is increased.

a. linear; increase linearly
b. quadratic; increase linearly
c. cubic; increase linearly
d. a and b
e. none of the above

Question 5

4 out of 4 points

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

a. in the short run, there is no distinction between variable and fixed costs. 
b. revenue and cost curves are straight-lines throughout the analysis.
c. there appears to be perfect competition since the price is considered to remain the same re-gardless of quantity.
d. the straight-line cost curve implies that marginal cost is constant.
e. both c and d

Question 6

4 out of 4 points

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

a. one minus the variable cost ratio
b. contribution margin per unit
c. selling price per unit
d. standard deviation of unit sales
e. none of the above

Question 7

4 out of 4 points

The main difference between perfect competition and monopolistic competition is:

a. the number of sellers in the market.
b. the ease of exit from the market.
c. the difference in the firm's profits in the long run.
d. the degree of product differentiation.

e. Whether it is the short run or the long run

Question 8

4 out of 4 points

Experience goods are products or services

a. that the customer already knows

b. whose performance is highly unusual

c. whose quality is undetectable when purchased

d. not likely to cause repeat purchases

e. all of the above

Question 9

4 out of 4 points

Uncertainty includes all of the following except ____.

a. unknown effects of deliberate actions

b. incomplete information as to the type of competitor

c. random disturbances

d. unverifiable claims

e. accidents due to weather hazards

Question 10

4 out of 4 points

Under asymmetric information,

a. you never get what you pay for

b. you sometimes get cheated

c. you always get cheated

d. at best you get what you pay for

e. sellers make profits in excess of competitive returns

Question 11

4 out of 4 points

A "search good" is:

a. One that depends on how the product behaves over time

b. A product whose quality is only found out over time by finding how durable it is

c. Like a peach that can be examined for flaws

d. Like a used car, since it is easy to determine its inherent quality

e. None of the above

Question 12

4 out of 4 points

If price exceeds average costs under pure competition, ____ firms will enter the industry, supply will ____, and price will be driven ____.

a. more; decrease; down

b. more; decrease; up

c. more; increase; down

d. more; increase; up

e. none of the above

Question 13

4 out of 4 points

The price for used cars is well below the price of new cars of the same general quality. This is an example of:

a. The Degree of Operating Leverage

b. A Lemon's Market

c. Redeployment Assets

d. Cyclical Competition

e. The Unemployment Rate

Question 14

4 out of 4 points

The demand curve facing the firm in ____ is the same as the industry demand curve.

a. pure competition

b. monopolistic competition

c. oligopoly

d. pure monopoly

e. none of the above

Question 15

4 out of 4 points

Declining cost industries

a. have upward rising AC curves.

b. have upward rising demand curves.

c. have -shaped total costs.

d. have diseconomies of scale.

e. have marginal cost curves below their average cost curve

Question 16

4 out of 4 points

In natural monopoly, AC continuously declines due to economies in distribution or in production, which tends to found in industries which face increasing returns to scale. If price were set equal to marginal cost, then:

a. price would equal average cost.

b. price would exceed average cost.

c. price would be below average cost.

d. price would be at the profit maximizing level for natural monopoly

e. all of the above

Question 17

4 out of 4 points

The practice by telephone companies of charging lower long-distance rates at night than during the day is an example of:

a. inverted block pricing

b. second-degree price discrimination

c. peak-load pricing

d. first-degree price discrimination

e. none of the above

Question 18

4 out of 4 points

In the electric power industry, residential customers have relatively ____ demand for electricity compared with large industrial users. But contrary to price discrimination, large industrial users generally are charged ____ rates.

a. similar, similar

b. elastic, lower

c. elastic, higher

d. inelastic, lower

e. inelastic, higher

Question 19

4 out of 4 points

____ as practiced by public utilities is designed to encourage greater usage and therefore spread the fixed costs of the utility's plant over a larger number of units of output.

a. Peak load pricing

b. Inverted block pricing

c. Block pricing

d. First degree price discrimination

e. None of the above

Question 20

4 out of 4 points

“Conscious parallelism of action” among oligopolistic firms is an example of ____.

a. intense rivalry

b. a formal collusive agreement

c. informal, or tacit, cooperation

d. a cartel

e. none of the above

Question 21

4 out of 4 points

Barometric price leadership exists when

a. one firm in the industry initiates a price change and the others follow it as a signal of changes in cost or demand in the industry.

b. one firm imposes its best price on the rest of the industry.

c. all firms agree to change prices simultaneously.

d. one company forms a price umbrella for all others.

e. the firms are all colluding

Question 22

4 out of 4 points

If a cartel seeks to maximize profits, the market share (or quota) for each firm should be set at a level such that the ____ of all firms is identical.

a. average total cost

b. average profit

c. marginal profit

d. marginal cost

e. marginal revenue

Question 23

4 out of 4 points

A(n) ____ is characterized by a relatively small number of firms producing a product.

a. monopoly

b. syndicate

c. cooperative

d. oligopoly

e. none of the above

Question 24

4 out of 4 points

In a kinked demand market, whenever one firm decides to lower its price,

a. other firms will automatically follow.

b. none of the other firms will follow.

c. one half of the firms follow and one half of the firms don't follow the price cut.

d. other firms all decide to exit the industry

e. all of the other firms raise their prices.

Question 25

4 out of 4 points

In the Cournot duopoly model, each of the two firms, in determining its profit-maximizing price-output level, assumes that the other firm's ____ will not change.

a. price

b. output

c. marketing strategy

d. inventory

e. none of the above

 

 

Available solutions
  • ECO550 Final Part 1 Latest 2017 (Perfect Answer)
    $22.00

    Question 1 0 out of 4 points Evidence from empirical studies of long-run cost-output relationships lends support to the: a. existence of a non-linear cubic total cost function b. hypothesis that marginal costs first decrease, then gradually increase over the normal operating range of the firm c. hypothesis that total costs increase quadratically over the ranges of output examined d. hypothesis

    Submitted on: 21 Sep, 2017 04:45:07 This tutorial has not been purchased yet .