Exam Ch. 7 ECO
In pure competition, the marginal revenue of a firm always equals: A. product price B. total revenue C. average total cost D. marginal cost
A
Refer to the above graph for a firm in pure competition. Line A represents: A. total revenue B. average revenue C. average total cost D. average fixed cost
A
Refer to the above graph. The level output at which this firm will shut down is: A. 0A B. 0B C. 0C D. 0K
A
Refer to the above table. At the profit-maximizing output, the firm's total revenue is: A. $48 B. $38 C. $80 D. $64
A
Refer to the above table. The equilibrium price of the product is: A. $40 B. $50 C. $120 D. $160
A
Refer to the above table. When the firm produces three units of output, it makes an economic: A. profit of $3 B. loss of $3 C. profit $9 D. loss of $9
A
Refer to the above table. When the firm produces three units of output, it makes an economic: A. profit of $3 B. loss of $3 C. profit of $9 D. loss of $9
A
Which is a reason why there is no advertising by individual firms under pure competition? A. firms produce a homogenous product B. The quantity of the product demanded is very large C. The market demand curve cannot be increased D. Firms do not make long-run profits
A
A firm sells a product in a purely competitive market. The marginal cost of A. continue producing 500 units B. produce less than 500 units C. produce more than 500 units D. shut down
B
A purely competitive firm does not try to sell more of its product by lowering its price below the market price because: A. its competitors would not permit ti B. it can sell all it wants to at the market price C. this would be considered unethical price chiseling D. its demand curve is inelastic, so total revenue will decline
B
Refer to the above data. If the firm's minimum average variable cost is $10, the firm's profit-maximizing level of output would be: A. 2. B. 3 C. 4 D. 5
B
Which characteristic would best be associated with pure competition? A. few sellers B. price taker C. non-price competition D. product differentiation
B
A firm sells a product in a purely competitive market. The marginal cost of the product at the current output is $4.00 and the market price is $4.50. What should the firm do? A. shut down if the minimum possible average variable cost is $3.00 B. Decrease output if the minimum possible average variable cost is $3.00 C. Increase output if the minimum possible average cost is $3.75 D. Decrease output if the minimum possible average variable cost is $3.75
C
A purely competitive firm's output is currently such that its marginal cost is $4 and marginal revenue is $5. Assuming profit maximization, the firm should: A. cut its price and raise its output B. raise its price and cut output C. leave price unchanged and raise output D. leave price unchanged and cut output
C
Assume the price of a product sold by a purely competitive firm is $5. Given the date in the accompanying table, at what output is total profit highest in the short run? A. 20 B. 30 C. 40 D. 50
C
Given the table below, what is the short-run profit-maximizing level of output for the firm? A. 2 units B. 3 units C. 4 units D. 5 units
C
In pure competition, the average revenue of a firm always equals: A. marginal cost B. average total cost C. marginal revenue D. total revenue
C
Let us suppose Harry's, a local supplier of chili and pizza, has the following revenue and cost structure A. harry's should stay open in the long B. Harry's should shut down in the short run C. Harry's stay open in the short run D. Harry's should shut down in the short run but reopen in the long run
C
Price is constant or "given" to the individual firm selling in a purely competitive market because: A. the firm's demand curve is downward sloping B. there are no good substitutes for the firm's product C. each seller supplies a negligible fraction of total supply D. product differentiation is reinforced by extensive advertising
C
Refer to the above cost chart. If the marginal revenue is $6, what output should the firm produce? A. 10 B. 12 C. 14 D. 20
C
Refer to the above graph. The level of output at which this firm is maximizing an economic profit is: A. 0A B. 0B C. 0C D. 0K
C
Refer to the above graph. The level of output at which this firm will product is: A. 0A B. 0B C. 0C D. 0K
C
The market model with the largest number of firms is: A. oligopoly B. pure monopoly C. pure competition D. monopolistic competition
C
A profit-maximizing firm in the short run will expand output: A. until marginal costs begin to rise B. until total revenue equals total cost C. until marginal cost equals average variable cost D. as long as marginal revenue is greater than marginal cost
D
Total revenue for producing eight units of output is $48. Total revenue for producing nine units of output is $63. Given this information, the: A. average revenue for producing nine units is $1 B. average revenue for producing nine units is $15 C. marginal revenue for producing the ninth unit is $1 D. marginal revenue for producing the ninth unit is $15
D