Economic

Temple University

Department of Economics

Economics 52: Principles of Microeconomics

Name ________________________________________

Directions: This is a closed book exam and it is to be your own work. You may neither give nor receive help on this exam. You must complete all parts and questions. You have 50 minutes to complete the exam.

Multiple Choice (40 points)

1. A profit maximizing perfectly competitive firm must decide

A) both what price to charge and how much to produce.

B) only on how much revenue it wishes to collect.

C) only on which industry to join, taking price and output as fixed.

D) only on what price to charge, taking output as fixed.

E) only on how much to produce, taking price as fixed.

2. The efficient-markets hypothesis states that

A) all markets produce an efficient outcome.

B) it is efficient to buy low and sell high.

C) most of the relevant information about a company's current and future earnings prospects is embodied in its stock price.

D) production is always technically efficient.

E) all relevant information about a company's current and future earnings prospects is embodied in its stock price.

3. Marginal utility is defined as the

A) total utility gained by consuming an extra unit of a good.

B) change in quantity divided by the change in utility.

C) average utility gained by consuming an average amount of the good.

D) total utility from all units consumed of a good.

E) extra utility gained by consuming an extra unit of a good.

4. Profit is the

A) difference between total revenues and total explicit and implicit costs.

B) ratio of total revenues to total costs.

C) goal of only large firms.

D) difference between total revenues and total explicit costs.

E) difference...