Multiple choice

1) Sensitivity analysis is rarely done because the data used in most studies is very accurate. 

a)  True

b)  False

2) Process A has fixed costs of $10,000 and unit costs of $4.50 each, process B has fixed costs of $25,000 and unit costs of $1.50 each.  At what production would the two processes have the same total costs?

a)  50 units

b)  500 units

c)  5,000 units

d)  50,000 units

3) For a certain commodity, prices increase by 50% the first year and 30% the second year.

Determine the average inflation rate for this commodity over this two-year period.

a) 80.0%

b)  40.5%

c) 39.6%

d) 40.0%

4) In 2010, Trucking Inc. had $1,250,000 in revenues and $1,013,000 in expenses. What are the Average and Marginal Tax rates respectively? (round to nearest whole percent)

a)  29% Average, 25% Marginal

b)  39% Average, 31% Marginal 

c) 32% Average, 39% Marginal 

d)  34% Average, 39% Marginal