Eco 550 Exam
Question 1
4 out of 4 points
Correct
Evidence from empirical studies of long-run cost-output relationships lends support to the:
Answer
Selected Answer:
hypothesis that total costs increase linearly over some considerable range of output examined
Correct Answer:
hypothesis that total costs increase linearly over some considerable range of output examined
Question 2
0 out of 4 points
Incorrect
A ____ total cost function implies that marginal costs ____ as output is increased.
Answer
Selected Answer:
quadratic; are constant
Correct Answer:
linear; are constant
Question 3
4 out of 4 points
Correct
The degree of operating leverage is equal to the ____ change in ____ divided by the ____ change in ____.
Answer
Selected Answer:
percentage; EBIT; percentage; sales
Correct Answer:
percentage; EBIT; percentage; sales
Question 4
4 out of 4 points
Correct
Theoretically, in a long-run cost function:
Answer
Selected Answer:
all inputs are considered variable
Correct Answer:
all inputs are considered variable
Question 5
4 out of 4 points
Correct
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 6
0 out of 4 points
Incorrect
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.
Answer
Selected Answer:
20,000 customers
Correct Answer:
30,000 customers
Question 7
0 out of 4 points
Incorrect
The main difference between perfect competition and...