# 100 QUESTIONS ECO 550 FINAL EXAM 2014 PART 1 AND PART 2 (2 SETS) UNABLE TO UPLOAD ALL QUESTIONS DUE TO SIZE RESTRICTION - 47937

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ECO 550 FINAL EXAM PART 1

(BONUS: TWO VERSIONS OF PART 1 POSTED TO MAKE TOTAL OF 50 QUESTIONS FINAL PART 1)

Question 1

The degree of operating leverage is equal to the ____ change in ____ divided by the ____ change in ____.

percentage; sales; percentage; EBIT

unit; sales; unit; EBIT

percentage; EBIT; percentage; sales

unit; EBIT; unit; sales

Question 2

In the linear breakeven model, the difference between selling price per unit and variable cost per unit is referred to as:

variable margin per unit

variable cost ratio

contribution margin per unit

target margin per unit

Question 3

Theoretically, in a long-run cost function:

all inputs are fixed

all inputs are considered variable

some inputs are always fixed

capital and labor are always combined in fixed proportions

Question 4

The short-run cost function is:

where all inputs to the production process are variable

relevant to decisions in which one or more inputs to the production process are fixed

not relevant to optimal pricing and production output decisions

crucial in making optimal investment decisions in new production facilities

Question 5

In a study of banking by asset size over time, we can find which asset sizes are tending to become more prominent. The size that is becoming more predominant is presumed to be least cost. This is called:

regression to the mean analysis.

breakeven analysis.

survivorship analysis.

engineering cost analysis.

a Willie Sutton analysis.

Question 6

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 7

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

more; decrease; down

more; decrease; up

more; increase; down

more; increase; up

Question 8

The problems of asymmetric information exchange arise ultimately because

one party to the exchange possesses different information than another

one party knows nothing

one party cannot independently verify the information of another

information is scarce

Question 9

Long distance telephone service has become a competitive market. The average cost per call is \$0.05 a minute, and it’s declining. The likely reason for the declining price for long distance service is:

Governmental pressure to lower the price

Reduced demand for long distance service

Entry into this industry pushes prices down

Lower price for a barrel of crude oil

Increased cost of providing long distance service

Question 10

What is the profit maximization point for a firm in a purely competitive environment?

The output where P = MC

The output where P < MC

The output where P > MC

The output where MR = MC

The output where AVC < P

Question 11

In the purely competitive case, marginal revenue (MR) is equal to:

cost

profit

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