# ECO 402 Mid And Final Exam Practice 5 Sets ( 300+Questions and Answers )

## ECO 402 Mid And Final Exam Practice 5 Sets ( 300+Questions and Answers )

ECO 402 Mid And Final Exam Practice 5 Sets ( 300+Questions and Answers )
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1. 1. The “perfect information” assumption of perfect competition includes all of the following except one. Which one?

Consumers know their preferences.
Consumers know their income levels.
Consumers know the prices available.
Consumers can anticipate price changes.

1. 2. Incremental cost is the same concept as ______________ cost.

Average
Marginal
Fixed
Variable

1. 3. A production function assumes a given:

Technology.
Set of input prices.
Ratio of input prices.
Amount of output.

1. 4. Assume that beer is an inferior good. If the price of beer falls, then the substitution effect results in the person buying ______ of the good and the income effect results in the person buying ______ of the good.

More, more
More, less
Less, more
Less, less

1. 5. Producer surplus for the whole market can be thought of as:

Total profit.
Variable operating profit plus factor rents.
Total profit minus factor rents earned by lower cost firms.
Total profit plus factor rents earned by lower cost firms.

1. 6. Baba Burgers has discovered there are economies of scope available to the restaurant. Which is most likely to be a response to this discovery?

Baba expands burger production, focusing on that one good.
Baba contracts burger production.
Baba adds grilled chicken sandwiches to the menu.
Baba cuts back on the diversity of the menu.

1. 7. The endpoints (horizontal and vertical intercepts) of the budget line:

Measure its slope.
Measure the rate at...