M3 Microeconomics

Product PriceUnit CostUnits SoldUnits ProducedOpportunity Cost$40.00$10.002001100$850 Given the information in the table shown above, the accounting profit is which of the following?

-$3,000

If the variable costs for a firm are $40,000, the fixed costs are $20,000, and the firm sells 100 units, what are the firm's average total costs?

$600

Product PriceUnit CostUnits SoldUnits ProducedOpportunity Costs$35.00$5.001001000$750 Given the information in the table shown here, the economic profit is which of the following?

-$2,250

Number of EmployeesTotal ProductionMarginal Product of LaborMarginal Revenue Product00011919250313752549621511115 Based on the data in this table, how many employees should the company hire in order to maximize their profit if the price of product is $5 and cost of each worker is $100?

Four employees

Select the statement that is true about perfect competition.

Perfect competition is a simplified view of a market.

If the firm is decreasing production from Q1 to Q2, how is the firm doing?

Poorly; it is at the shutdown point.

Diseconomies of scale are seen when __________.

the long run average cost curve is rising

A variable input is one that __________.

will change as a result of changes in production

In which type of market structure might we see firms attempting to collude with one another to set prices?

Oligopoly

Given the information on this graph, this firm needs to produce which of the following number of units to start making a profit?

14

Based on this graph, what amount should the company choose to produce to maximize profit?

71

Using the data provided, what production quantity would represent output optimization for this firm?

80

Which of the following is NOT a trait of monopolistic competition?

Barriers to entry

The additional income a company generates from selling one more unit due to this is called which of the following?

Output effect

Given the following production function for a train engine manufacturing company, at what point (or points) should the firm produce?

D

Which of the following is true about marginal cost?

Marginal cost is the change in total cost that results from a single unit increase in the quantity produced.

Which of the following market structures has only one seller, who acts as a price maker?

Monopoly

Based on the descriptions below of different jobs Nancy has held, which would qualify as an oligopoly?

Nancy was an administrative assistant for an oil company with very few other sellers. Other companies had trouble getting into the fossil fuel market. All the fossil fuel companies had the same information, but they had an information advantage over the buyers.

Which of the following describes an industry that experiences economies of scale, even at high levels of output?

Natural monopoly

Which statement below is NOT true about the long run average supply curve?

The long run supply curve consists of MC from the shutdown point onward.

When a firm uses four machines, it can produce 300 units daily. A fifth machine allows the firm to product 440 units.Which of the following is true regarding production?

The marginal product for the fifth machine is 140 units and the average product is 88 units.