04 Jun Question MG 640 Managerial Economics April 7, 2015
Question
MG 640 Managerial Economics April 7, 2015
Final Exam
Name: …………………………………… ………………………………………..
PART I : Problem/Discussion
1. Why would you expect unemployment to fall during an economy’s expansionary phrase and to rise during a contractionary phrase? Discuss and make reference to the business cycle.
2. Why does GDP measure only final goods and services produced rather than all goods and services produced?
3. Why is the aggregate demand curve downward sloping? Discuss and use graphs where necessary.
4. Complete Table below for
a) Total Cost (TC)
b) Average variable cost (AVC)
Q
FC
VC
TC (FC+VC)
AVC (VC/Q)
0
1000
20
1000
50
1000
90
1000
125
1000
145
1000
160
1000
5. Use Table above and answer the following questions
A. What is the total cost of producing 125 units of output
a. 1000 c. 1400
b. 2050 d. 2400
B. What is the average variable cost of producing 50 units of output?
a. 21 c. 14
b. 34 d. 20
C. What is the average total cost of producing 160 units of output?
a. 12.98 c. 22.04
b. 16.31 d. 19.38
6. The following table summarizes the short-run production function for your firm. Your product sells for $5 per unit, labor costs $5 per unit, and rental price of capital is $20 per unit.
Complete the following table, and then answer the accompanying questions.
K
L
Q
MPK
APK
APL
VMPK
0
5
0
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