# Economics Test Questions

**Topics:**Petroleum, Total cost, Economic order quantity

**Pages:**6 (1261 words)

**Published:**June 15, 2015

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Final Exam

BUSN 603 Multiple Choice Questions Set Part 2-8

Jane wants to set up a photo shop. The cost to rent is $150 per week. The variable cost of making one photo is $20 and she can sell it for $50. 1. Jane has to sell ______ photos per week to break even

2. If Jane sells 10 units ,her profits would be ______ dollars Paul wants to choose one of the two investments opportunities over three possible scenarios. Investment 1 will yield a return of $10000 in scenario1, $2000 in scenario 2 and a negative return of $5000 in scenario 3. Investment 2 will yield a return of $6000 in scenario 1,$4000 in scenario 2 and zero in scenario 3. The probability 1 is 0.2,for scenario 2 is 0.3 and for scenario 3 is 0.5 1/If you were to choose the investment that maximizes Paul's Expected Money Value(EMV),then you should choose______ 1. Investment 1

b.Investment 2

c.Indifferent

2/If Paul is uncertain about the return for investment 1,then this return has to be ____dollars in order to make Paul indifferent between these two investments(i.e two investments would have the same EMV). Sam has a cleaning service. To better allocate his resources, he would like to forecast his weekly order based on the order number he received in the past 13 weeks as shown in the following table. WEEK DEMAND

week 1 11

week 2 14

week 3 16

week 4 10

week 5 15

week 6 17

week 7 11

week 8 14

week 9 17

week 10 12

wekk 11 14

week 12 16

week 13 15

1/ Using a three week moving average , Sam's forecast for his week 14 order number is ________ 2/ Using a three week weighted moving average with weights 3,2,and 1 given to the most recent ,second most recent and third most recent week, respectively, Sam's forecast for week 14 is __________. 3/ If the MAD for moving average is 4.17 and the MAD for weighted moving average is 2.38, then which forecast is more accurate? A/ Moving average

b/ Weighted moving average

c/ The same

d/Not enough information o evaluate

The Low Knock oil company produces two grades of cut-rate gasoline for industrial distribution. The grades ,regular and economy are produced by refining a blend of two types of crude oil type X type 100 and type X220 . Each crude oil differs not only in cost per barrel ,but in composition as well. The following table indicate the percentage of crucial ingredients found in each of the crude oil and the cost per barrel for each. CRUDE OIL TYPE INGREDIENT A (%) INGREDIENT B (%) COST/BARELL X100 35 55 30.00 X220 60 25 34.80 Weekly demand for the regular grade of low knock gasoline is at least 25,000 barrels and demand for the economy is at least 32,000 barrel per week.At least 45% of each barrel of regular must be ingredient A. At most 50% of each barrel of economy should contain ingredient B,while the gasoline yield from one barrel of crude depends on the type of crude and the type of processing used. We assume for the sake of this example that one barrel of crude oil will yield 0.46 barrel of gasoline. 1/At the optimal production ,does the company just make enough regular gasoline to meet the demand?. Does the company just make enough economy gasoline to meet the demand? A/Yes, yes

b/Yes,no

c/No,yes

d/No,no

2/ To minimize the production cost , the optimal amount of X100 crude oil used in producing regular gasoline is...

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