ECS2601 ASSESSMENT
4 SEM 1 OF 2023
EXPECTED QUESTIONS
AND ANSWERS
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Question 1
Complete
Mark 2.00 out of 2.00
business
Perfect competition …
a. is competition in that every producer must be operating at maximum efficiency or they will not be making a normal return on their money.
b. has assumptions that are true in the real world even though they seem to be false at first glance.
c. would tend to please producers more than consumers.
d. is not competition at all because one producer cannot affect any other individual producer by price cutting practices in the long run.
Question 2
Complete
Mark 2.00 out of 2.00
When economic profit exists for a firm, it is very feeble because …
a. price will fall because market supply will increase.
b. costs will inevitably increase and eliminate profit.
c. firms are driven to reduce output until average total cost equals price.
d. firms are driven to increase output to the point where average total cost will equal price.
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Question 3
Complete
Mark 2.00 out of 2.00
If accounting profits are positive and economic profits are negative in the long run, the proper strategy is to ...
a. feel satisfied because, in the long run, accounting profits will average zero.
b. close down the business and shift the resources to more profitable ventures.
c. monitor the situation closely and leave the business the minute accounting profits
start to decline.
d. go back and recalculate figures, because accounting profits can never be more
than economic profits.
Question 4
Complete
Mark 2.00 out of 2.00
James knows the average total cost and the average variable cost for a given level of output. Which of the following costs can he not determine given this
information?
a. total cost
b. James can determine all of the above costs given the information provided.
c. average fixed cost
d. fixed cost
Question 5
Complete
Mark 2.00 out of 2.00
Assume that the average product for six workers is 15. If the marginal product of the seventh worker is 18, then the …
a. marginal product is rising.
b. marginal product is falling.
c. average product is falling.
d. average product is rising.
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Question 6
Complete
Mark 2.00 out of 2.00
Which of the following best explains why we cannot consider the returns to scale of a production function in the short run?
a. We cannot change all of the production inputs in the short run.
b. Returns to scale determine the diminishing marginal returns of the inputs.
c. Returns to scale is a property of the consumerʹs utility function in the short run.
d. Production functions exhibit negative returns to scale in the short run.
OSCAR THE TUTOR
Question 7 +27844708483
fac,ecs,mac,tax,fin inv,bnu,qmi,dsc,sta
Complete
tutorials
Mark 0.00 out of 2.00
Fin Accounting, management Accounting ,
taxation, investment
management , financial mathematics,
business
Price ceilings are only effective if the black market is prevented.
statistics, quantitative decision making fo r
business
Select one:
True
False
Question 8
Complete
Mark 2.00 out of 2.00
A sales tax of R1 per unit of output is placed on a particular firm whose product sells for R5 in a competitive industry with many firms.
What will happen to the firm’s price?
a. Increase
b. More information is needed to determine what will happen to the price.
c. Remain the same
d. Decrease.
Downloaded by: LesaSmith | Want to earn
Distribution of this document is illegal R13,625 per year?
4 SEM 1 OF 2023
EXPECTED QUESTIONS
AND ANSWERS
Downloaded by: LesaSmith | Want to earn
Distribution of this document is illegal R13,625 per year?
, Stuvia.com - The study-notes marketplace
Question 1
Complete
Mark 2.00 out of 2.00
business
Perfect competition …
a. is competition in that every producer must be operating at maximum efficiency or they will not be making a normal return on their money.
b. has assumptions that are true in the real world even though they seem to be false at first glance.
c. would tend to please producers more than consumers.
d. is not competition at all because one producer cannot affect any other individual producer by price cutting practices in the long run.
Question 2
Complete
Mark 2.00 out of 2.00
When economic profit exists for a firm, it is very feeble because …
a. price will fall because market supply will increase.
b. costs will inevitably increase and eliminate profit.
c. firms are driven to reduce output until average total cost equals price.
d. firms are driven to increase output to the point where average total cost will equal price.
Downloaded by: LesaSmith | Want to earn
Distribution of this document is illegal R13,625 per year?
, Stuvia.com - The study-notes marketplace
Question 3
Complete
Mark 2.00 out of 2.00
If accounting profits are positive and economic profits are negative in the long run, the proper strategy is to ...
a. feel satisfied because, in the long run, accounting profits will average zero.
b. close down the business and shift the resources to more profitable ventures.
c. monitor the situation closely and leave the business the minute accounting profits
start to decline.
d. go back and recalculate figures, because accounting profits can never be more
than economic profits.
Question 4
Complete
Mark 2.00 out of 2.00
James knows the average total cost and the average variable cost for a given level of output. Which of the following costs can he not determine given this
information?
a. total cost
b. James can determine all of the above costs given the information provided.
c. average fixed cost
d. fixed cost
Question 5
Complete
Mark 2.00 out of 2.00
Assume that the average product for six workers is 15. If the marginal product of the seventh worker is 18, then the …
a. marginal product is rising.
b. marginal product is falling.
c. average product is falling.
d. average product is rising.
Downloaded by: LesaSmith | Want to earn
Distribution of this document is illegal R13,625 per year?
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Question 6
Complete
Mark 2.00 out of 2.00
Which of the following best explains why we cannot consider the returns to scale of a production function in the short run?
a. We cannot change all of the production inputs in the short run.
b. Returns to scale determine the diminishing marginal returns of the inputs.
c. Returns to scale is a property of the consumerʹs utility function in the short run.
d. Production functions exhibit negative returns to scale in the short run.
OSCAR THE TUTOR
Question 7 +27844708483
fac,ecs,mac,tax,fin inv,bnu,qmi,dsc,sta
Complete
tutorials
Mark 0.00 out of 2.00
Fin Accounting, management Accounting ,
taxation, investment
management , financial mathematics,
business
Price ceilings are only effective if the black market is prevented.
statistics, quantitative decision making fo r
business
Select one:
True
False
Question 8
Complete
Mark 2.00 out of 2.00
A sales tax of R1 per unit of output is placed on a particular firm whose product sells for R5 in a competitive industry with many firms.
What will happen to the firm’s price?
a. Increase
b. More information is needed to determine what will happen to the price.
c. Remain the same
d. Decrease.
Downloaded by: LesaSmith | Want to earn
Distribution of this document is illegal R13,625 per year?
