Académique Documents
Professionnel Documents
Culture Documents
(BUS700)
TRIMESTER
2,
2015
BUS700
MICROECONOMICS,
TUTORIAL
SEMINAR
3
1.
2.
3.
4.
The
monthly
payment
that
a
business
makes
on
a
building
it
has
leased
for
the
next
five
years:
a)
b)
c)
d)
e)
Is
variable
cost
is
a
fixed
cost.
Is
a
sunk
cost
that
need
not
be
paid
if
the
business
produces
nothing.
is
a
long-run
cost
since
the
building
has
been
leased
for
five
years.
all
of
the
above.
The
total
cost
of
producing
three
units
of
output
is
________
and
the
marginal
cost
is
________
a) $12;
$76
b) $36;
$48
c) $106;
$18
d) $108;
48
BUS700 Economics
Page 1
Economics
(BUS700)
5.
6.
In
a
perfectly
competitive
market,
a
firm
maximises
its
profit
by
producing
the
quantity
of
output
at
which:
a) Market
price
equals
average
fixed
cost.
b) Market
price
equals
marginal
cost.
c) Market
price
is
greater
than
marginal
cost.
d) Market
price
equals
minimum
average
variable
cost.
If
a
firm
faces
a
perfectly
elastic
demand
for
its
product,
then:
a) It
will
always
make
zero
profit.
b) Its
marginal
revenue
curve
is
horizontal
at
the
market
price.
c) It
will
want
to
raise
its
price
to
increase
total
revenue.
d) It
will
want
to
lower
its
price
to
increase
sales.
7.
Explain
the
following
economic
terms
in
relation
to
production
of
output
in
the
short
run:
(a)
sunk
cost
(b)
Shut
down
point
and
its
relationship
with
the
firm
and
market
supply
curve
8.
The
firm
would
continue
to
experience
economies
of
scale
and,
overtime,
end
up
as
the
only
firm
in
the
industry.
Other
producers
would
have
had
higher
average
costs
and,
therefore,
would
not
have
been
able
to
match
firm
As.
BUS700 Economics
Page 2