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Eco 550 Final Exams

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1. Which of the following statements concerning the long-run average cost curve of economic theory is true? Answer

It is L-shaped

It is ∩-shaped

It is ∪-shaped

It is ∧-shaped

It is M-shaped
2.Economies of scale exist whenever long-run average costs:
Answer

Increase as output is increased

Remain constant as output is increased

Decrease as output is increased

Decline and then rise as output is increased
3.For a short-run cost function which of the following statements is (are) not true? Answer

The average fixed cost function is monotonically decreasing.

The marginal cost function intersects the average fixed cost function where the average variable cost function is a minimum.

The marginal cost function intersects the average variable cost function where the average variable cost function is a minimum.

The marginal cost function intersects the average total cost function where the average total cost function is a minimum. 4.The existence of diseconomies of scale (size) for the firm is hypothesized to result from: Answer

transportation costs

imperfections in the labor market

imperfections in the capital markets

problems of coordination and control encountered by management 5.In which of the following econometric problems do we find Durbin-Watson statistic being far away from 2.0? Answer

the identification problem

autocorrelation

multicollinearity

heteroscedasticity

agency problems
6.The method which can give some information in estimating demand of a product that hasn’t yet come to market is: Answer

the consumer survey

market experimentation

a statistical demand analysis

plotting the data

the barometric method
7.The estimated slope coefficient (b) of the regression equation (Ln Y = a + b Ln X) measures the ____ change in Y for a one ____ change in X. Answer

percentage, unit

percentage, percent

unit, unit

unit, percent

none of the above...