Busi – 1023 final exam questions
BUSI – 1023 Final Exam Questions
· Worth 35% of final grade
ANSWER ALL 4 QUESTIONS
Question 1
Use the following table for this question.
Number of Workers
Marginal Product
Total Product
Average Product
1
12
2
16
3
14
4
13
5
10
a. Fill out the columns of the Table.
b. With which worker do diminishing returns occur?
c. Graph the marginal and average product curves.
Question 2
Examine the following information about XYZ Incorporated.
Number of Workers
Output
MP
VC
FC
TC
AVC
AFC
ATC
MC
0
0
0
110
1
12
30
2
31
60
3
41
90
4
50
120
5
58
150
6
64
180
7
67
210
a. Fill out the columns of the Table.
b. The firm is operating in the short run. How can you tell?
c. What is happening to marginal product? Why? At which output level is marginal product greatest?
d. Compare the MP with the MC. What is your observation?
Question 3
The below graph shows a monopolist that faces a market demand according to his cost functions. Answer all following questions:
a. Define Monopoly and explain the barriers of entry to such market.
b. What is the production level that will maximize profit (or minimize loss) for the monopolist. Explain.
c. Calculate the monopolist’s total revenue (TR) at the production level that will maximize profit (or minimize loss).
d. Calculate the monopolist’s total cost (TC) at the production level that will maximize profit (or minimize loss).
Question 4
The Following table shows total cost (TC) of a kid selling lemonade, where the lemonade market is considered “Competitive” market. Answer all following questions:
Quantity of Output
Total Cost $
0
5
1
8.5
2
15
3
22
4
30.5
5
45.5
a. What are the conditions of Perfect Competition?
b. What does “Price Taker” mean?
c. If the market price is $8.50, what is the profit-maximizing output? Explain.
d. If the market price is $8.50, calculate the economic profit (loss)?
