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11. Economies of scale:
a. means that per unit costs decrease as output increases in the long run.
b. are caused by loss of team spirit as a firm expands in size.
c. is the result of mismeasurement of opportunity costs.
d. occur when per unit costs increase as one input is added to production.

12. Kellogg's, the breakfast food people, comprise one of four corporations that control about 92 percent of its market for breakfast food. Kellogg's would be considered:
a. a perfect competitor.
b. a monopolist.
c. an oligopolist.
d. to be engaged in monopolistic competition.

13. Ruby's Beauty College of Grand Forks, Nebraska, is one of many local beauty colleges each specializing in different haircutting techniques. Ruby's Beauty College would be considered:
a. a perfect competitor.
b. a monopolist.
c. an oligopolist.
d. a monopolistic competitor.

14. Monopolistic competition is characterized by:
a. interdependent pricing and output decisions.
b. significant barriers to entry.
c. many firms producing differentiated products.
d. firms facing a perfectly elastic demand curve.

15. A major difference between a monopolistically competitive firm and a:
a. perfectly competitive firm is that the competitive firm faces a downward sloping demand curve while the monopolistically competitive firm sells a standardized product.
b. perfectly competitive firm is that the competitive firm sells a differentiated product, whereas the monopolistically competitive firm sells a standardized product.
c. monopolist is the monopolist produces where marginal revenue equals marginal cost, and the monopolistically competitive firm where price equals marginal cost.
d. monopolist in long-run equilibrium is that the monopolist's average total cost curve can lie below its price, whereas the monopolistically competitive firm's average total cost curve will be tangent to its demand curve.

16. Which of the following firms would most likely be operating within an oligopolistic industry?
a. A farm.
b. A public utility company.
c. A tire manufacturer.
d. A restaurant.

17. Regarding MC and MR:
a. If MR > MC, the monopolist gains profit by decreasing output.
b. If MR < MC, the monopolist gains profit by increasing output.
c. If MR = MC, the monopolist is breaking even.
d. If MR = MC, the monopolist is maximizing profit.

18. Patents:
a. serve the public interest in that it is more efficient for a single supplier to supply the market than for many suppliers to do so.
b. are illegal if the owner of the patent charges the public a high price.
c. create monopolies.
d. discourage inventors from thinking up new products.

19. In order to maximize profits (or minimize losses) a firm should produce at the output level which:
a. maximizes per unit profit.
b. maximizes total revenue.
c. minimizes total cost.
d. marginal revenue equals marginal cost.

20. The shutdown point:
a. is when the firm will be better off if it shuts down than it will be if it stays in business.
b. always means bankruptcy.
c. is when price< ATC.
d. is when price = fixed cost.

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Regression problem

Thompson Machine Works purchased several new, highly sophisticated machines. The production department needed some guidance with respect to qualifications needed by an operator. Is age a factor? Is the length of service as a machine operator important? In order to explore further the factors needed to estimate performance on the new machines, four variables were listed:
X1 _ Length of time employee was a machinist. X3 _ Prior on-the-job rating.
X2 _ Mechanical aptitude test score. X4 _ Age.
Performance on the new machine is designated Y.Thirty machinists were selected at
random. Data were collected for each, and their performances on the new machines
were recorded. A few results are listed in the attached file.

The equation is: Y _ 11.6 _ 0.4X1 _ 0.286X2 _ 0.112X3 _ 0.002X4
a. What is the full designation of the equation?
b. How many dependent variables are there? Independent variables?
c. What is the number 0.286 called?
d. As age increases by one year, how much does estimated performance on the new machine increase?
e. Carl Knox applied for a job on a new machine. He has been a machinist for six years, and scored 280 on the mechanical aptitude test. Carl's prior on-the-job performance rating is 97, and he is 35 years old. Estimate Carl's performance on the new machine.

See attached file for full problem description.

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