# eco550 final

## eco550 final

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...