Test Paper: Principles of Microeconomics
PEPERIKSAAN AKHIR SEMESTER I
SESI 2011/2012 (PRINCIPLES OF MICROECONOMICS)
1. Which of the following is the best example of a variable cost? A. Monthly payments for hired labour. B. Property tax payments. C. Monthly rent payments for a warehouse. D. Pension payments to retired workers.
2. Malik wants to start his own business. The business he wants to start will require that he purchase a factory that costs $400 000. Malik currently has $500 000 in the bank earning 3 percent interest per year. If Malik purchases the factory with his own money, what is the annual implicit opportunity cost of purchasing the factory? A. $0 B. $3 000 C. $12 000 D. $15 000
3. When a firm is operating at an efficient scale, A. average variable cost is minimized. B. average fixed cost is minimized. C. average total cost is minimized. D. marginal cost is minimized.
4. Suppose that a firm’s total cost is given by the equation TC = 100 + 15Q – 5Q2 + 2Q3, where Q represents total output. If Q = 10, then average variable cost is A. $10. B. $165. C. $175. D. $1 650.
5. Consider the following statements when answering this question: I. Suppose a semiconductor chip factory uses a technology where the average product of labour is constant for all employment levels. This technology obeys the law of diminishing returns. II. Suppose a semiconductor chip factory uses a technology where the marginal product of labour rises, then is constant and finally falls as employment increases. The technology obeys the law of diminishing returns. A. I is true and II is false. B. I is false and II is true. C. Both I and II are true. D. Both I and II are false.
6. Suppose the marginal product of labour is 12 and the marginal product of capital is 3. If the wage rate is $9 and the price of capital is $3, then in
SESI 2011/2012 (PRINCIPLES OF MICROECONOMICS)
1. Which of the following is the best example of a variable cost? A. Monthly payments for hired labour. B. Property tax payments. C. Monthly rent payments for a warehouse. D. Pension payments to retired workers.
2. Malik wants to start his own business. The business he wants to start will require that he purchase a factory that costs $400 000. Malik currently has $500 000 in the bank earning 3 percent interest per year. If Malik purchases the factory with his own money, what is the annual implicit opportunity cost of purchasing the factory? A. $0 B. $3 000 C. $12 000 D. $15 000
3. When a firm is operating at an efficient scale, A. average variable cost is minimized. B. average fixed cost is minimized. C. average total cost is minimized. D. marginal cost is minimized.
4. Suppose that a firm’s total cost is given by the equation TC = 100 + 15Q – 5Q2 + 2Q3, where Q represents total output. If Q = 10, then average variable cost is A. $10. B. $165. C. $175. D. $1 650.
5. Consider the following statements when answering this question: I. Suppose a semiconductor chip factory uses a technology where the average product of labour is constant for all employment levels. This technology obeys the law of diminishing returns. II. Suppose a semiconductor chip factory uses a technology where the marginal product of labour rises, then is constant and finally falls as employment increases. The technology obeys the law of diminishing returns. A. I is true and II is false. B. I is false and II is true. C. Both I and II are true. D. Both I and II are false.
6. Suppose the marginal product of labour is 12 and the marginal product of capital is 3. If the wage rate is $9 and the price of capital is $3, then in