Econ HW 6? maybe 7 idk

If Marjory goes from painting 6 to 8 paintings each month, her total costs increase from $620 to $720 per month. This implies that the marginal cost of one additional painting is:

$50

Which of the following are characteristics of perfectly competitive markets?

All firms sell the same standardized product. Firms can easily enter and exit the market.

Which of the following capture the conditions under which firms will shutdown?

If price is less than average variable cost even when the firm produces at the level of output that minimizes average variable cost. If the firm's revenue is less than the firm's variable cost at all levels of output.

The marginal cost curve passes through the minimum of the:

average total cost curve average variable cost curve

If marginal cost equals average total cost, then:

average total cost is at its minimum

Variable cost divided by total output is called ______.

average variable cost

The law of diminishing returns implies that, when some of a firm's factors of production are fixed, as the firm hires additional workers, output eventually will increase at a(n) _____ rate.

decreasing

If a firm's total revenue is greater than its total cost, then the firm _____.

is profitable

Suppose the Sandy makes bracelets that she sells on Etsy.com. If her fixed cost increases, then her profit maximizing number of bracelets will _____.

not change

When the owners of a local brewery increase their output from 4 to 6 kegs of beer per day, their total cost increases from $310 to $360 per day. This implies that the marginal cost of producing an additional keg of beer is _____.

$25

When Cathy goes from hiring 10 to 11 workers in her bakery, her total output increases from 100 to 120 loaves of bread per day. If Cathy's production process exhibits diminishing marginal returns, then when she hires 12 workers, we know her total output will be less than

140

A firm is profitable if its total revenue exceeds its _____.

total cost

A _____ factor of production is an input whose quantity can be altered in the short run.

variable

Suppose an artist can easily change the number of hours she spends working each month. In deciding how many paintings to paint each month, the opportunity cost of the artist's time is considered a _____.

variable cost

Suppose the owners of a local brewery can easily change the number of workers they hire each day to help brew beer. In deciding how much beer to produce each day, the daily cost of hiring their workers is a _____.

variable cost

The figure to the right shows the supply curve for The Apple of My Pie Baking Company. If there are 100 pie baking companies in the market (including The Apple of My Pie Baking Company), each with a supply curve like that of The Apple of My Pie Baking Company, then when the price of a pie is $17, what's the total market supply of pies each day?

1700

Consider the table on the right, which shows the total cost of producing wedding cakes at Crumby Bakery. If the market price for a wedding cake is $250, and Crumby Bakery is a price-taker, how many wedding cakes should the bakery make each day?

3

If Mitch's Surf Shop has $30,000 in revenue each month and if the total cost of operating the shop is $26,000 each month, then the monthly profit for Mitch's Surf Shop is

4000

If Wahoo's Fish Tacos earns $75,000 revenue and incurs a total cost of $68,000 per month, then the monthly profit for Wahoo's Fish Tacos is ____ dollars

7000

Suppose that when the price of apples is 25 cents each, there are 10 farmers who each supply 600 apples per day, and 2 farmers who each supply 1,000 apples per day. Thus, when the price of apples is 25 cents, the market supply of apples is

8000

The figure to the right shows the supply curve for The Apple of My Pie Baking Company. If there are 100 pie baking companies in the market (including The Apple of My Pie Baking Company), each with a supply curve like that of The Apple of My Pie Baking Company, then when the price of a pie is $10, what's the total market supply of pies each day?

900

If output can be varied continuously, then firms in a perfectly competitive market maximize their profits by choosing the level of output such that _____.

P=MC

Which of the following are characteristics of perfectly competitive markets?

The market has many sellers, each of which sells only a small fraction of the total quantity sold in the market. Buyers are well informed about the prices different firms charge.

Average variable costs is:

a firm's variable cost divided by total output

An input whose quantity cannot be altered in the short run is ______.

a fixed factor of production

The demand curve facing a firm in a perfectly competitive market is

a horizontal line at the equilibrium price.

A market in which no individual seller has significant influence over the market price of a product is known as _____.

a perfectly competitive market

A fixed factor of production is ______.

an input whose quantity cannot be changed in the short run

Marginal cost eventually increases because of _____.

diminishing returns

A firm's profit-maximizing level of output will not change when the firm's ___cost changes

fixed

A firm's profit-maximizing level of output will not change when the firm's __ cost changes

fixed

Suppose an artist has a year-long lease on the studio where she works. When deciding how many paintings to make in a given month, the rent the artist pays for her studio is considered a _____.

fixed cost

Suppose the owners of a local brewery carry property insurance that is paid for on an annual basis. In deciding how much beer to produce on any given day, the annual cost of the property insurance is considered a ____.

fixed cost

The law of diminishing returns explains why marginal costs eventually _____.

increase

If the marginal cost of producing an additional unit of a good is less than price of that good, then the firm should

increase production.

If a firm is profitable, then at its profit maximizing level of output, its total revenue:

is greater than its total cost

In a perfectly competitive market, the supply curve for a firm

is the portion of the marginal cost curve that lies above the average variable cost curve.

The period of time of sufficient length that all of the firm's factors of production are variable is known as the _____.

long run

Suppose a professional artist decides to paint one additional painting, the resulting increase in her total cost is the _____ of producing an additional painting.

marginal cost

Suppose the owners of a local brewery decide to produce one additional keg of beer, the resulting increase in their total cost is the _____ of producing an additional keg.

marginal cost

At each point along a market supply curve, price measures each seller's _____.

marginal cost of production

If a firm in a perfectly competitive market chooses the level of output such that price equals marginal cost, then the firm is ______.

maximizing its profits

A perfectly competitive market is a market in which

no individual seller has a significant influence over the market price of a product.

If the marginal cost of producing the 500th unit of a good is greater than price of that good, then the firm should

not produce the 500th unit.

Firms in perfectly competitive markets face demand curves that are _____.

perfectly elastic

At each point along a market supply curve, ___ measures each seller's marginal cost of production.

price

Producer surplus is the amount by which:

price exceeds the seller's reservation price

If a firm is profitable, then at its profit maximizing level of output:

price is greater than average total cost (P>ATC).

A firm cannot be profitable unless:

price is greater than average total cost for some level of output

The amount by which price exceeds the seller's reservation price is _____.

producer surplus

The difference between the total revenue of a firm and all costs (explicit and implicit) incurred by the firm is called _____.

profit

As prices _____, individual suppliers already in the market will be willing to turn to more costly production techniques to supply more of the product.

rise

The period of time sufficiently short that at least some of the firm's factors of production are fixed is known as the _____.

short run

In a perfectly competitive market, the portion of the marginal cost curve that lies above the average variable cost curve is the firm's:

supply curve

In the short run, a profit-maximizing firm will not produce anything if

the firm's revenue is less than its variable cost at all levels of production.

A variable factor of production is

an input whose quantity can be changed in the short run.

A price-taking, profit-maximizing firm will always produce a level of output where ______.

Price = MC