Directions: · You have 75 minutes to answer the following questions.

04 Jun Directions: · You have 75 minutes to answer the following questions.

Question
Midterm II

Econ 4351, Sec 3 – Intermediate Microeconomics

Fall 2015

Name:

Student #:

Directions:

· You have 75 minutes to answer the following questions.

· You should have nothing on your desk at this time except for the exam, pencils, an eraser, a ruler, and a calculator.

· For multiple choice questions, write your answer on the blank line on the right side of each question.

· For essay questions, please show your work (step by step) for every question in order to get full credit.

· Your handwriting should be legible.

· You must stop writing and put down your pencil immediately when time is up.

Total Points earned __________________

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. (2pt each)

1) The short run is

1)

A) three years.

B) a time period in which at least one input is fixed.

C) a time period in which at least one set of outputs has been decided upon.

D) however long it takes to produce the planned output.

E) less than a year.

2)

The rate at which one input can be reduced per additional unit of the other input, while holding

2)

output constant, is measured by the

A) marginal product of the input.

B) marginal rate of substitution.

C) average product of the input.

D) marginal rate of technical substitution.

3)

Fixed costs are fixed with respect to changes in

3)

A) time.

B) capital expenditure.

C) wages.

D) output.

4)

Which of the following costs always declines as output increases?

4)

A) Fixed cost

B) Average variable cost

C) Marginal cost

D) Average total cost

E) Average fixed cost

5) Revenue is equal to

5)

A) price times quantity.

B) price times quantity minus average cost.

C) expenditure on production of output.

D) price times quantity minus total cost.

E) price times quantity minus marginal cost.

6) The perfectly competitive firm’s marginal revenue curve is

6)

A) vertical.

B) exactly the same as the marginal cost curve.

C) upward-sloping.

D) horizontal.

E) downward-sloping, at twice the (negative) slope of the market demand curve.

7)

A situation in which the unregulated competitive market outcome is inefficient because prices fail

7)

to provide proper signals to buyers and sellers is known as:

A) a deadweight loss.

B) a market failure.

C) a shortage.

D) an imperfectly competitive market.

8)

Which of the following is unlikely to occur as a result of a price support program?

8)

A) A cost to government

B) An increase in quantity purchased

C) A reduction in consumer surplus

D) The occurrence of dealweight loss

E) A reduction in producer surplus