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If 5 percent decrease in the price results in 7 percent increase in the quantity demanded the price elasticity of demand is a) 0

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If 5 percent decrease in the price results in 7 percent increase in the quantity demanded the price elasticity of demand is a) 0.83 b) 0.30. c) 0.70. d) 1.20. 2) Price elasticity of demand of Good A is 0.7. If the firm increases price, its revenue will most possibly a) Decrease b) Stay unchanged c) Increase d) Will equal to zero 3) If you know that with 7 units of output, average fixed cost is $16.53 and average variable cost is $81.25, then total cost at this output level is: a) 893.75. b) $97.78. c) $750. d) $880. 4) Marginal cost is calculated by dividing the change in total cost over change in: a) Quantity of labor b) Amount of rent c) Quantity of output d) Quantity of materials 5) Formula for average variable cost is : a) VCQ b) TC/Q c) AVC - AFC d) ATC X AFC 6) At which level a firm can minimize the cost of output? a) At minimum AFC b) At minimum ATC c) At Minimum AVC d) At minimum MC
7) According to the optimal output rule, at which level a firm can maximize its profit? a) MCMR b) MC=MR c) MCMR d) TC=TR 8) Average fixed cost is equal to a) average total cost - average variable cost. b) total cost - total quantity of output. c) average variable cost + total fixed cost. d) average variable cost x total quantity of output. 9) The additional cost incurred for the additional unit produced is called: a) average cost. b) marginal cost c) net cost. d) total cost 10) Spreading effect means that as firm produces greater output, this leads to a. lower average variable cost b. lower average fixed cost c. higher average fixed cost d. lower average total cost