Problem 1) Suppose you know the average total cost and the average variable cost for a given level of output, Q. Which of the following costs can you NOT determine given this information?
a) Total cost
b) Average fixed cost
c) Fixed cost
d) Variable cost
e) You can determine all of the above costs given the information provided
Problem 2) If a firm experiences diminishing marginal returns to a factor, it must mean:
a) The factor is of poor quality
b) The firm has some fixed factors
c) The factor is wearing out
d) The firm has decreasing returns to scale
Problem 3) If the yen appreciates against the dollar, then which is NOT likely to occur:
a) US exports become relatively cheap in Japan
b) Japanese investors flock to US dollar assets
c) Japanese firms engage in incomplete exchange rate pass-through
d) Japanese exports become relatively more expensive in the US