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
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Measure the rate at which a consumer is willing to trade one good for another.
Represent the quantity of each good that could be purchased if all of the budget were allocated to that good.

1. 8. 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. 9. The difference between the economic and accounting costs of a firm are: The accountant’s fees.
The corporate taxes on profits.
The opportunity costs of the factors of production that the firm owns.
The sunk costs incurred by the firm. 10. Plastic and steel are substitutes in the production of body panels for certain automobiles. If the price of plastic increases, with other things remaining the same, we would expect:

The price of steel to fall.
The demand curve for steel to shift to the right.
The demand curve for plastic to shift to the left.
The demand curve for steel to shift to the left.

11. Cost-output elasticity can be written and calculated as: MC/AC.
AC/MC
(AC)(MC)
(AC)2(MC)

12. Fixed costs are fixed with respect to changes in: Output.
Capital expenditure.
Wages.
Time.

13. The presence of a learning curve may induce a decision maker in a startup firm to choose: Low levels of

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