11. Which of the representations of demand for a product provides a quick analysis?

A. Table because it shows the specific values for the quantities demanded by the consumers for the given prices

B. Graph which provides a generalization of the relationship between quantity demanded and price for the product

C. Equation which shows how the quantity demanded is calculated given the prices

D. There is no quick way to analyze data, one has to look at the minute details before one can make a conclusion on the basic relationship between price and quantity demanded

12. Which of the following statements is correct with respect to profit maximization?

A. If the total revenue and the total cost functions are linear functions, and the total revenue function is above the total cost function, the firm can produce as many as it wants and there will be economic profits.

B. If the total revenue and the total cost functions are linear functions, but the total revenue function is below the total cost function, the optimal output is zero.

C. If the total cost function is linear, the total revenue function is quadratic with an inverted U shape, and there are output where the total revenue is greater than the total cost, there is a unique optimal output that maximizes profits

D. A and C are correct

E. A, B and C are correct

13. Which is the correct formula for the total cost of production?Note: TC is total Cost, AFC is average fixed cost, AVC is average variable cost, MC is marginal cost, TVC is total variable cost, TFC is total fixed cost, and Q is output

A. TC = (AFC + AVC) (Q)

B. TC = TVC + TFC

C. TC = (MC)(Q)

D. A and B are correct

E. A, B and C are correct

14. What is/are the correct formula for the marginal cost of production?

A. change in total cost given the change in output

B. change in variable cost given the change in output

C. change in fixed cost given the change in output

D. A and B are correct

E. A, B, C are correct

15. What is true with profit maximization of the firm using the Total Revenue Total Cost approach?

A. The only requirement to find the optimal output that maximizes economic profit is that the difference between the total revenue and the total cost is the highest

B. The total revenue should be lower than the total cost

C. The total revenue should be higher than the total cost

D. A and B are correct

E. A and C are correct

16. Given a demand equation: Q = 39 - 0.5 P, what is the equation for the inverted demand?

A. P = 39 - Q

B. P = 39 - 2Q

C. P = 78 - 2Q

D. P = 78 - 0.5Q

E. No correct answer

17. Given the inverted demand equation that you find in # 16, find the total revenue equation. Note the caret (^) denotes that the number next to it is an exponent. Thus Q^2 is read square of the quantity demanded

A. TR = 39Q - Q^2

B. TR = 39Q - 2Q^2

C. TR = 78Q - 0.5Q^2

D. TR = 78Q - 2Q^2

E. No correct answer

18. Given the total revenue function you found in # 17, derive the profit function if the total cost function is TC = 10 + 2Q.

A. Profit = - 2Q^2 + 78Q - 10

B. Profit = - 2Q^2 + 80Q - 10

C. Profit = - 2Q^2 + 76Q - 10

D. Profit = 20^2 + 76Q - 10

E. No correct answer

19. Given the total revenue and the total cost function in # 18, the corresponding marginal revenue is computed as MR = 78 - 4Q, while the marginal cost is MC = 2, find the optimal level of output that maximizes profits where MR = MC

A. Q = 18

B. Q = 19

C. Q = 20

D. Q = 21

E. No correct answer

20. Given the total revenue and the total cost functions in # 18, what is the total profits if the firm produces 18?

A. 708

B. 710

C. 712

D. 714

E. No correct answer

21. Given the total revenue and total cost functions in # 18, what is the total profits if the firm produces Q = 19?

A. Profit = 708

B. Profit = 710

C. Profit = 712

D. Profit = 714

E. No correct answer

22. Given the total revenue and the total cost functions in # 18, what is the total profits if the firm produces Q = 20?

A. Profit = 708

B. Profit = 710

C. Profit = 712

D. Profit = 714

E. No correct answer

23. Given the total revenue and the total cost functions in # 18, what is the total profits if the firm produces Q = 21?

A. Profit = 708

B. Profit = 710

C. Profit = 712

D. Profit = 714

E. No correct answer

24. Is the optimal output the same using the Total Revenue Total Cost approach and the Marginal Revenue Marginal Cost approach methods?

A. No

B. Yes

25. How much is the total fixed costs given the total cost function in # 18 where TC = 10 + 2Q ?

A. TFC = 2Q

B. TFC = Q

C. TFC = 10

D. TFC =100

E. No correct answer