# ECO 550/ECO550 FINAL EXAM LATEST (ALL QUESTIONS) 100% SOLUTION - 89593

Solution Posted by

## anjis_devis

Rating : (20)B
Solution Detail
Price: \$40.00
• From: Economics, Microeconomics
• Posted on: Sat 04 Apr, 2015
• Request id: None
• Purchased: 0 time(s)
• Average Rating: No rating
Request Description
Solution Description

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
price
total revenue
Question 12
The price for used cars is well below the price of new cars of the same general quality. This is an example of:
The Degree of Operating Leverage
A Lemon's Market
Redeployment Assets
Cyclical Competition
The Unemployment Rate
Question 13
Uncertainty includes all of the following except ____.
unknown effects of deliberate actions
incomplete information as to the type of competitor
random disturbances
unverifiable claims
accidents due to weather hazards
Question 14
The practice by telephone companies of charging lower long-distance rates at night than during the day is an example of:
inverted block pricing
second-degree price discrimination
first-degree price discrimination
none of the above
Question 15
When the cross elasticity of demand between one product and all other products is low, one is generally referring to a(n) ____ situation.
oligopoly
monopoly
pure competition
substitution
monopolistic competition
Question 16
The demand curve facing the firm in ____ is the same as the industry demand curve.
pure competition
monopolistic competition
oligopoly
pure monopoly
Question 17
In the electric power industry, residential customers have relatively ____ demand for electricity compared with large industrial users. But contrary to price discrimination, large industrial users generally are charged ____ rates.
similar, similar
elastic, lower
elastic, higher
inelastic, lower
inelastic, higher
Question 18
Regulatory agencies engage in all of the following activities except _______.
controlling entry into the regulated industries
overseeing the quality of service provided by the firms
setting federal and state income tax rates on regulated firms
setting prices that consumers will pay
Question 19
In natural monopoly, AC continuously declines due to economies in distribution or in production, which tends to found in industries which face increasing returns to scale. If price were set equal to marginal cost, then:
price would equal average cost.
price would exceed average cost.
price would be below average cost.
price would be at the profit maximizing level for natural monopoly
Question 20
A cartel is a situation where firms in the industry
have an agreement to restrict output.
agree to produce identical products.
obey the rules of dominant firm price leadership.
experience the pain of a kinked d

Attachments