Ag Econ test #2
Suppose the market price of outpost is $25 per unit, in order for this firm to receive maximum profit, it must produce:
340 units
What is the value of t?
5
If the income elasticity of demand is negative, this means that the good is
an inferior good
Total cost is
fixed cost plus variable cost
Which of the following statements is NOT a characteristic of perfect competition?
limited entry to markets
True or False: A price elasticity of demand of -2 for a specific cola means that if the price increases 10 percent, the quantity demanded of the cola will decrease by 2 percent.
False
What is the equilibrium quantity of input used and what is the price paid per unit under the condition of perfect competition?
Qinput=1600 Pinput=5
If own price elasticity is -5, then price flexibility is
-0.2
If the firm produces 250 units, total costs are:
$5,500
What is the shutdown price of this firm?
$10 per percent
What is the value of x?
$1200
What is the value of y?
$1700
What is the value of w?
$200
If the price elasticity of demand for Cheer detergent is 3.0, then a
12 percent drop in price leads to a 36 percent rise in the quantity demanded
What is the value of z?
2
In order for this firm to break even, it must produce:
320 units
Law of Diminishing Marginal Returns states that
As successive units of a variable input are added to a production process with the other inputs held constant, the marginal physical product eventually declines
Price Elasticity formula
Ep=change in Q / change in P
The supply curve for this firm is given by:
BF
Which of the following statements is true?
MIC refers to the change in total cost when using one more unit of input
Suppose a local bookstore notices that a 2 percent increase in book prices leads to a 2 percent decrease in the number of books sold. Which of the following is true?
The store's sales revenue did not change.
True or False: The own-price elasticity of demand measures the responsiveness of quantity demanded to change in price
True
A substitute good is one that
can be used in place of another good, fulfilling the same basic purpose
