Econ 103 Assignment 6

10.Refer to Table 14-13. What is the marginal cost of the 1st unit? a.$50 b.$75 c.$80 d.$150

A

16.Refer to Scenario 14-1. At Q = 999, the firm's total costs equal a.$10,985. b.$10,990. c.$10,995. d.$10,999.

A

19.Assume a firm in a competitive industry is producing 800 units of output, and it sells each unit for $6. Its average total cost is $4. Its profit is a.$-1,600. b.$1,600. c.$3,200. d.$8,000.

B

2.Refer to Table 14-6. What is the marginal revenue from selling the 3rd unit? a.$55 b.$120 c.$137 d.$140

B

33.Refer to Table 17-1.If Rochelle and Alec operate as a profit-maximizing monopoly in the market for water, what price will they charge? a.$25 b.$30 c.$35 d.$40

B

12.Refer to Table 14-13. What is Diana's economic profit at the profit maximizing point? a.$78 b.$243 c.$278 d.$375

C

17.Refer to Scenario 14-1. At Q = 999, the firm's profits equal a.$993. b.$997. c.$1,003. d.$1,007

C

18.Refer to Scenario 14-1. To maximize its profit, the firm should a.increase its output. b.continue to produce 1,000 units. c.decrease its output but continue to produce. d.shut down.

C

22.Refer to Figure 14-1. The firm will earn a negative economic profit but remain in business in the short run if the market price is a.above $6.30 but less than $8. b.above $6.30. c.less than $6.30 but more than $4.50. d.less than $4.50.

C

7.Refer to Table 14-8.The firm will not produce an output level beyond a.4 units. b.5 units. c.6 units. d.7 units

C

13.Profit-maximizing firms enter a competitive market when existing firms in that market have a.total revenues that exceed fixed costs. b.total revenues that exceed total variable costs. c.average total costs that exceed average revenue. d.average total costs less than market price.

D

21.Refer to Figure 14-1. The firm should shut down if the market price is a.above $8. b.above $6.30 but less than $8. c.above $4.50 but less than $6.30. d.less than $4.50.

D

29.Refer to Figure 14-7. Which segment of the supply curve represents the firm shutting down? a.ABCD b.BCD c.CD d.AB

D

14.The accountants hired by the Brookside Racquet Club have determined total fixed cost to be $75,000, total variable cost to be $130,000, and total revenue to be $125,000. Because of this information, in the short run, the Brookside Racquet Club should a.shut down because staying open would be more expensive. b.lower their prices to increase their profits. c.stay open because shutting down would be more expensive. d.stay open because the firm is making an economic profit

A

23.Refer to Figure 14-1. The firm will earn a positive economic profit in the short run if the market price is a.above $6.30. b.less than $6.30 but more than $4.50. c.less than $4.50. d.exactly $6.30

A

24.Refer to Figure 14-1. If the market price rises above $6.30, the firm will earn a.positive economic profits in the short run. b.negative economic profits in the short run but remain in business. c.negative economic profits and shut down. d.zero economic profits in the short run.

A

28.Refer to Figure 14-7. Which line segment best reflects the short-run supply curve for this firm? a.ABCF b.CD c.DF d.BCD

A

3.Suppose that a firm operating in perfectly competitive market sells 300 units of output at a price of $3 each. Which of the following statements is correct? (i)Marginal revenue equals $3. (ii)Average revenue equals $100. (iii)Total revenue equals $300. a.(i) only b.(iii) only c.(i) and (ii) only d.(i), (ii), and (iii)

A

38.Refer to Table 17-1.If this market for water were perfectly competitive instead of monopolistic, what price would be charged? a.$0 b.$30 c.$40 d.$60

A

6.Marcia is a fashion designer who runs a small clothing business in a competitive industry. Marcia specializes in making designer dresses. Marcia sells 10 dresses per month. Her monthly total revenue is $5,000. The marginal cost of making a dress is $400. In order to maximize profits, Marcia should a.make more than 10 dresses per month. b.make fewer than 10 dresses per month. c.continue to make 10 dresses per month. d.We do not have enough information with which to answer the question.

A

8.Refer to Table 14-8. The firm will produce a quantity greater than 4 because at 4 units of output, marginal cost a.is less than marginal revenue. b.equals marginal revenue c.is greater than marginal revenue. d.is minimized

A

26.Refer to Figure 14-1. If the market price is $5.00, the firm will earn a.positive economic profits in the short run. b.negative economic profits in the short run but remain in business. c.negative economic profits and shut down. d.zero economic profits in the short run.

B

35.Refer to Table 17-1.If Rochelle and Alec operate as a profit-maximizing monopoly in the market for water, how much profit will each of them earn? a.$8,750 b.$9,000 c.$12,000 d.$18,000

B

39.Refer to Table 17-1.Suppose the town enacts new antitrust laws that prohibit Rochelle and Alec from operating as a monopoly. What will be the price of water once Rochelle and Alec reach a Nash equilibrium? a.$15 b.$20 c.$25 d.$30

B

Assume a certain firm in a competitive market is producing Q = 1,000 units of output. At Q = 1,000, the firm's marginal cost equals $15 and its average total cost equals $11. The firm sells its output for $12 per unit. 15.Refer to Scenario 14-1. At Q = 1,000, the firm's profits equal a.$-200. b.$1,000. c.$3,000. d.$4,000.

B

20.Refer to Figure 14-1. The firm's short-run supply curve is its marginal cost curve above a.$1. b.$3. c.$4.50. d.$6.30.

C

27.Refer to Figure 14-1. If the market price is $4.00, the firm will earn a.positive economic profits in the short run. b.negative economic profits in the short run but remain in business. c.negative economic profits and shut down. d.zero economic profits in the short run

C

31.Refer to Table 17-7.Suppose the market for this product is served by two firms who have formed a cartel and are colluding to set the price and quantity in this market. If the marginal cost to produce this product is constant at $2 per unit, then what price will the cartel set in this market? a.$4 b.$5 c.$6 d.$7

C

32.Refer to Table 17-7.Suppose the market for this product is served by two firms who have formed a cartel and are colluding to set the price and quantity in this market. If the marginal cost to produce this product is constant at $2 per unit and there is no fixed cost, then what will the combined profit of the cartel be? a.$40 b.$60 c.$80 d.$120

C

34.Refer to Table 17-1.If Rochelle and Alec operate as a profit-maximizing monopoly in the market for water, how many gallons of water will be produced and sold? a.0 b.500 c.600 d.1,200

C

4.Suppose a firm in a competitive market produces and sells 8 units of output and has a marginal revenue of $8.00. What would be the firm's total revenue if it instead produced and sold 4 units of output? a.$4 b.$8 c.$32 d.$64

C

40.Refer to Table 17-1.Suppose the town enacts new antitrust laws that prohibit Rochelle and Alec from operating as a monopoly. How many gallons of water will be produced and sold once Rochelle and Alec reach a Nash equilibrium? a.600 b.700 c.800 d.900

C

5.For a certain firm, the 100th unit of output that the firm produces has a. marginal revenue of $10 and a marginal cost of $11. It follows that the a.production of the 100th unit of output increases the firm's profit by $1. b.production of the 100th unit of output increases the firm's average total cost by $1. c.firm's profit-maximizing level of output is less than 100 units. d.production of the 110th unit of output must increase the firm's profit but by less than $1

C

9.Refer to Table 14-8.In order to maximize profits, the firm will produce a.1 unit of output because marginal cost is minimized b.4 units of output because marginal revenue exceeds marginal cost. c.6 units of output because marginal revenue equals marginal cost. d.8 units of output because total revenue is maximized.

C

1.Refer to Table 14-6. What is the total revenue from selling 4 units? a.$120 b.$257 c.$317 d.$480

D

11.Refer to Table 14-13. In order to maximize profits, how many units should Diana's Dress Emporium produce? a.5 b.6 c.7 d.8

D

25.Refer to Figure 14-1. If the market price is $6.30, the firm will earn a.positive economic profits in the short run. b.negative economic profits in the short run but remain in business. c.negative economic profits and shut down. d.zero economic profits in the short run

D

30.Refer to Table 17-7.If this market is perfectly competitive and the marginal cost is constant at $2 per unit, then how much output will be produced? a.20 b.30 c.35 d.40

D

36.Refer to Table 17-1.If the market for water were perfectly competitive instead of monopolistic, how many gallons of water would be produced and sold? a.0 b.600 c.900 d.1,200

D

37.Refer to Table 17-1.What is the socially efficient quantity of water? a.0 gallons b.600 gallons c.900 gallons d.1,200 gallons

D