QUESTION 11

What is the average fixed cost when output is 5?

	A.	190
	B.	150
	C.	100
	D.	83

QUESTION 12

Which of the following statements about costs are true?

	A.	The MC curve intersects the ATC at the minimum point along the curve.
	B.	The MC curve intersects the AVC at the minimum point along the curve.
	C.	When the ATC is downward sloping, the MC is below the ATC.
	D.	All of them are true

QUESTION 13

Amtrak's service from Miami to Charlotte costs $125. The route usually sells about 500 seats which is only 50% of full capacity. The average fixed cost of the route is $25 per passenger. If the profit is $25,000, what is the average variable cost?

	A.	100
	B.	25
	C.	50
	D.	75

QUESTION 14

Where does the diminishing product of labor begin?

	A.	with the 3rd worker
	B.	With the 4th worker
	C.	With the 5th worker
	D.	With the 6th worker

QUESTION 15

If average total cost is $100 when Q = 1, and average variable cost is $100 when Q = 1, what is the fixed cost?

	A.	75
	B.	0
	C.	50
	D.	25

QUESTION 16

Which of the following does not belong?

TC =total cost;FC = fixed cost;VC = variable cost;AFC = average fixed cost;AVC = average variable cost

	A.	AVC+AFC
	B.	(FC/Q)+(VC/Q)
	C.	TC/Q
	D.	(TC+VC)Q

QUESTION 2

The cash fare of Raleigh's GoRaleigh bus is currently at $1.25 per ride. Suppose the city council is thinking about raising the fare to $2.50 to generate more revenue. The council has asked for your advice as a student of economics. What needs to be true in terms of price effect and output effect for the revenue to increase?

	A.	Price effect = output effect
	B.	Price effect
	C.	None of the above
	D.	Price effect > output effect

QUESTION 3

Suppose that AMC Movies & Coca Cola are monopolies in Raleigh NC. That is, AMC Movies is the only provider of movies and Coca Cola is the only provider of Coke in our city. If AMC Movies can perfectly price discriminate and Coca Cola cannot, which of the following is true about profits? (You can assume that the demand and supply curve are exactly the same, as well as costs).

	A.	AMC Movies's profits are larger than Coca Cola's
	B.	The two companies' profits are the same
	C.	Coca Cola's profits are larger than AMC Movies's