# ECO 550 FINAL EXAM (PART 1 AND 2) – UPDATED 2014

## ECO 550 FINAL EXAM (PART 1 AND 2) – UPDATED 2014

﻿ECO 550 FINAL EXAM (PART 1 AND 2) – UPDATED 2014
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ECO 550 FINAL EXAM (PART 1 AND 2) - UPDATED 2014
ECO 550 Final Exam (Part 1 And 2) - Updated 2014

o550 final exam part 1

Question 1
A ____ total cost function implies that marginal costs ____ as output is increased.
linear; increase linearly
cubic; increase linearly
linear; are constant
Question 2
Which of the following is not an assumption of the linear breakeven model:
constant selling price per unit
decreasing variable cost per unit
fixed costs are independent of the output level
a single product (or a constant mix of products) is being produced and sold
Question 3
Break-even analysis usually assumes all of the following except:
in the short run, there is no distinction between variable and fixed costs.
revenue and cost curves are straight-lines throughout the analysis.
there appears to be perfect competition since the price is considered to remain the same regardless of quantity.
the straight-line cost curve implies that marginal cost is constant.
Question 4
George Webb Restaurant collects on the average \$5 per customer at its breakfast & lunch diner. Its variable cost per customer averages \$3, and its annual fixed cost is \$40,000. If George Webb wants to make a profit of \$20,000 per year at the diner, it will have to serve__________ customers per year.
10,000 customers
20,000 customers
30,000 customers
40,000 customers
50,000 customers
Question 5
The degree of operating leverage is equal to the ____ change in ____ divided by the ____ change in ____.