MIRCO TEST TWO
Cody builds mailboxes. If he charges $20 for each mailbox, his total revenue will be
$500 if he sells 25 mailboxes
When a profit-maximizing firm is earning profits, those profits can be identified by Group of answer choices
(P-ATC)*Q
A binding minimum wage tends to
A) cause a labor surplus. B) cause unemployment. C) have the greatest impact in the market for teenage labor.
Which of the following statements is correct regarding a firm's decision-making? Group of answer choices
The decision to shut down is a short-run decision, whereas the decision to exit is a long0run decision
Which of the following goods is rival and excludable?
a congested toll road
when the government imposes a binding price ceiling on a competitive market
a shortage of the good occurs
Profit-maximizing firms enter a competitive market when existing firms in that market have
average total costs less than market price
Which of the following would not be considered a private good?
cable tv service
A tax of $0.25 is imposed on each bag of potato chips that is sold. The tax decreases producer surplus by $600 per day, generates tax revenue of $1,220 per day, and decreases the equilibrium quantity of potato chips by 120 bags per day. The tax Group of answer choices
creates a deadweight loss of $15 per day
Both private goods and club goods are
excludable
Which of the following is an example of an implicit cost?
foregone rent on office space owned and used by the firm
A certain competitive firm sells its output for $20 per unit. The 50th unit of output that the firm produces has a marginal cost of $22. Production of the 50th unit of output does not necessarily
increase the firm's average variable cost by $0.44
Corrective taxes that are imposed upon the producer of a nasty smell can be successful in reducing that smell because the tax makes the producer Group of answer choices
internalize the negative externality
A negative externality
is an adverse impact on a bystander
When a profit-maximizing firm in a competitive market has zero economic profit, accounting profit
is at least zero
Economists normally assume that the goal of a firm is to
maximize profits
An example of a price floor is
minimum wage
The things that must be forgone to acquire a good are called
opportunity costs
A good is excludable if
people can be prevented from using it
If one person's use of a good diminishes another person's enjoyment of it, the good is
rival in consumption
Some environmentalists argue that we should protect the environment as much as possible, regardless of cost. Which of the following is not a likely outcome of pursuing such a course of action?
the elimination of all pollution
If a price floor is not binding, then
the equilibrium price is above the price floor
The difference between accounting profit and economic profit relates to
the manner in which costs are defined
The business activities of Firm A confer positive externalities on Firm B, and the business activities of Firm B confer positive externalities on Firm A. If the two firms merged, then
their respective markets would move closer to the social optimum
The competitive firm's long-run supply curve is that portion of the marginal cost curve that lies above average
total cost
Profit is defined as
total revenue minus total cost
A certain firm manufactures and sells computer chips. Last year it sold 2 million chips at a price of $10 per chip. For last year, the firm's
total revenue was $20 million
A $3.50 tax per gallon of paint placed on the sellers of paint will shift the supply curve
upward by exactly $3.50
If a firm operating in a competitive industry shuts down in the short run, it can avoid paying
variable costs
Under which of the following scenarios would a park be considered a common resource?
visitors can enter the park free of charge, but frequently all of the picnic tables are in use
Under which of the following scenarios would a park be considered a club good?
visitors to the park must pay an admittance fee, but there are always plenty of empty picnic tables
Some goods can be either common resources or public goods depending on
whether the good is rival in consumption
If the profit-maximizing quantity of production for a competitive firm occurs at a point where the firm's average total cost of production is falling as production increases, then the firm
will have economic profit less than zero at the profit-maximizing quantity
In the long run, each firm in a competitive industry earns
zero economic profit
