MBA 651 - Quiz #6

The marginal cost curve

intersects the ATC and AVC at their minimum points.

In the short run, the marginal cost curve crosses the average total cost curve at

the minimum point of the average total cost curve.

The short run response of quantity demanded to a change in price is usually:

Less than the long run response.

You are the manager of a firm that sells its product in a competitive market at a price of $60. Your firm's cost function is C = 33 + 3Q2. The profit-maximizing output for your firm is

10

You are the manager of a firm that sells its product in a competitive market at a price of $60. Your firm's cost function is C = 50 + 3Q2. The profit-maximizing output for your firm is

10

You are the manager of a firm that sells its product in a competitive market at a price of $60. Your firm's cost function is C = 50 + 3Q2. Your firm's maximum profits are

250

You are the manager of a firm that sells its product in a competitive market at a price of $50. Your firm's cost function is C = 40 + 5Q2. Your firm's maximum profits are

85

In a competitive market, the market demand is Qd = 70 - 3P and the market supply is Qs = 6P. A price ceiling of $4 will result in

A shortage of 34 units.

By the property of "more is better" and transitivity, indifference curves

do not intersect one another.

In the long-run, perfectly competitive firms produce a level of output such that:

P = MC and P = minimum of AC.

A perfectly competitive firm faces:

a perfectly elastic demand function.

A study has estimated the effect of changes in interest rates and consumer confidence on the demand for money to be: lnM = 14.666 + .021 lnC - .036 lnr, where M denotes real money balances, C is an index of consumer confidence, and r is the interest rate paid on bank deposits. Based on this study, a 5% increase in interest rates will cause the demand for money to:

drop by .18%.

If an excise tax is imposed on a good, then the supply curve

shifts up by the amount of the tax.

The possibility of the endless cyclical preference is eliminated by the property of

transitivity.