HI,

I have been given a practise exam with no solutions. I am wondering if someone can help me with the solutions in order for me to gain some understanding as to the areas I need to focus on. I have attached some of the questions I am having trouble with. Thank you

Mars inc. produces 100.000 boxes of Snickers bars which sell for $4 a box. "variable costs are $3 per box, and it has 3150.000 fixed operating costs. In the short run. It should shut down as xed costs are not being covered. keep producing as variable oasis are being met. keep producing as total costs are being recovered. keep producing as prots are 550.000. A rm earns a narmal prot when its total revenues jun offset both the cost and cost. accounting; opportunity explicit: accounting historical:replacemer|t accounting: replacement The "law" of demand can be best described by a fall in price will increase quantity demanded. if incomes rise. people will buy more. people will buy things that they enjoy. a rise in price will cause shortages. when the R2 or a regression equation is very high. it indicates that there is a good chance of serial correlation and so the equation must be discarded. a high proportion oi the variation in the dependent variable can be accounted {or by the variation in the Independent variables. G) the intercept term has no economic meaning, all the coefcients are statistically signicant. A rm using two inputs. X and Y. is using them in the most efcient manner when MPx: marginal product ofx MPy: marginal product of Y Px: price of X Py: price on MPxe MPy. Pit = Pyand MPx = MPy. MerMPy = erPy. MerPy = MPyi'Px. :artel agreements tend to break down All ofthe above because of price "chiseling" by one or more members. during economic downturns. when there is overcapacity in the industry. The following are possible examples of price discrimination except senior citizens pay lower fares on public transportation than younger people at the same time. subscription prices for a ptoiessional journal are higher when bought by a library than when bought by an individual. a product sells at a higher price at location A than at focation B, because transportation costs are higher from the factory to A. prices in export markets are tower than for identical products in the domestic market. In order for price discrimination to exist A demand price elasticities must be identical in all markets. B Both A and C markets must be capable of being separated. different demand price elasticities must exist in different markets. markets must be interdependent. The owner of a produce store found that when the price of a head of lettuce was raised from 50 cents to $1, the quantity sold per hour fell from 18 to 8. The price elasticity of demand for lettuce is A -1.57. .0.8. C -1.15. D -0.56. The government unit that wants to achieve "revenue enhancement" will find it considerably more favorable to enact an excise tax on goods whose demand is A unitary elastic. B highly elastic. C highly inelastic. D relatively elastic. Prices under an ideal cartel situation will be equal to A competitive prices B marginal cost. monopoly prices. prices under monopolistic competition.Mutual interdependence occurs when A all firms in an industry are affected by the same macro economic conditions, such as a recession, inflation, interest rates, exchange rates, etc. B monopolists recognize that they must face eventual competition in the long run. C the actions of firms are independent of each other. D the actions of one firm in an industry are easily recognized and perhaps copied by others. Which is a required characteristic of a perfectly competitive industry? A Barriers to entry are high. B Products are highly differentiated. C None of the above D There are few firms so that none can influence market price. In which of these markets would the firms be facing the least elastic demand curve? A pure monopoly B monopolistic competition C oligopoly D perfect competitionFor the regression equation Q = 100 - 10X 1- 0.25X3, which of the following statements is true? X2 is the more important variable because it is positive. The change in Q associated with a one unit increase in X depends on the initial level of X. When X decreases by one unit, Q decreases by 10 units. When X increases by 10 units, Q decreases by 1 unit. Assume a perfectly competitive rm's shortrun cost is TC = 100 + 16m) + W. If the market price is $196. when should it do? produce 6 units and continue operating cannot be determined from the above information produce zero units [i.e.. shut down) produce 5 units and continue operating Costs of production that change with the rate of output are Which of the following holds true? When the Marginal Product (MP) is rising. Marginal cost {MC} is rising; and when MP is faliing, MC is falling. when MP is rising, hit is constant. and when MP is falling. MI: is negative. There is no relationship between MP and MC. When MP is rising, MC is falling, and when MP is falling, MC is rising. Which of the following cost relationships is not true? AFC: average xed cost AC: average cost MC: marginal cost TVC: total variable cost TC: total cost TFC: total fixed cost Q: quantity of outputs The change in TVClthe change in Q = MC The change in Tc; the change in Q = MC Which of the following will not cause the demand curve for good X to shift? a change in the price of X an increase in average disposable real income G) a change in the price of Z. a substitute a change in the price of Y, a complement which of the following will result in a decrease in demand [or residential housing in the short run? an increase In the wages ol carpenters a decrease In the prlces of residential houslng G) a decrease in the price of lumber a decrease in real household incomes