ECO 550 Final Exam Part 1 (SPRING 2016) (STRAYER)

1. Which of the following is not an assumption of the linear breakeven model:

2. Theoretically, in a long-run cost function:

3. George Webb Restaurant collects on the average $5 per customer at its breakfast & lunch diner. Its variable cost per customer averages $3, and its annual fixed cost is $40,000.  If George Webb wants to make a profit of $20,000 per year at the diner, it will have to serve__________

4. In a study of banking by asset size over time, we can find which asset sizes are tending to become more prominent.  The size that is becoming more predominant is presumed to be least cost. This is called

5. In the linear breakeven model, the difference between selling price per unit and variable cost per unit is referred to as:

6. In the linear breakeven model, the breakeven sales volume (in dollars) can be found by multiplying the breakeven sales volume (in units) by:

7. Barometric price leadership exists when

8. If a cartel seeks to maximize profits, the market share (or quota) for each firm should be set at a level such that the ____ of all firms is identical.

9. “Conscious parallelism of action” among oligopolistic firms is an example of ____

10. A(n) ____ is characterized by a relatively small number of firms producing a product

11. Which of the following is an example of an oligopolistic market structure?

12. In a kinked demand market, whenever one firm decides to lower its price

13. Buyers anticipate that the temporary warehouse seller of unbranded computer equipment will

14. Under asymmetric information,

15. All of the following are mechanisms which reduce the adverse selection problem except ____.

16. The price for used cars is well below the price of new cars of the same general quality.  This is an example of:

17. A firm in pure competition would shut down when

18. If price exceeds average costs under pure competition, ____ firms will enter the industry, supply will ____, and price will be driven ____.

19. A “search good” is:

20. In natural monopoly, AC continuously declines due to economies in distribution or in production, which tends to found in industries which face increasing returns to scale.  If price were set equal to marginal cost, then:

21. When the cross elasticity of demand between one product and all other products is low, one is generally referring to a(n) ____ situation.

22. ____ as practiced by public utilities is designed to encourage greater usage and therefore spread the fixed costs of the utility’s plant over a larger number of units of output.

23. In the electric power industry, residential customers have relatively ____ demand for electricity compared with large industrial users.  But contrary to price discrimination, large industrial users generally are charged ____ rates.

24. Declining cost industries

25. The demand curve facing the firm in ____ is the same as the industry demand curve.