microecon test 3

c

Archibald's tattoos is a perfectly competitive firm. the firm's costs are shown in the table above. if the market price of a tattoo is $17.50 what is the firm's economic profit? a) -$10 an hour b) $12.50 an hour c) $2.50 an hour d) 0

a

Giuseppe's pizza is a perfectly competitive firm. the firm's costs are shown in the table above. if the market price is $15, how much economic profit does the firm make? a) $0 b) $-15 c) $-10 d) $30

b

Giuseppe's pizza is a perfectly competitive firm. the firm's costs are shown in the table above. if the market price is $20, how much economic profit does the firm make? a) $-20 b) $12 c) $0 d) $-10

b

if a firm shuts down in the short run, a) its total revenue is not large enough to cover its fixed cost b) its loss equals its fixed cost c) its loss equals zero d) it makes zero economic profit

d

if a perfectly competitive apple farm's marginal revenue exceeds the marginal cost of the last bushel of apples sold, what should the farm do to maximize its profit? a) decrease output b) lower its price to sell more c) determine what the total revenue and total cost of production are d) increase output

d

refer to figure 11-4. if the market price is $30 and if the firm is producing output, what is the amount of its total variable cost? a) $7,200 b) $6,480 c) $5,400 d) $3,960

c

refer to figure 11-4. if the market price is $30, the firm's profit maximizing output level is a) 0 b) 130 c) 180 d) 240

c

refer to figure 11-4. what is the amount of its total fixed cost? a) $1,080 b) $1,440 c) $2,520 d) cannot be determined

c

refer to table 8.5. assume that fruit baskets are sold in a perfectly competitive market. the market price of a fruit basket is $15. to maximize profits, exotic fruit should sell ____ fruit baskets. a) two b) three c) five d) zero

c

refer to table 8.5. assume that fruit baskets are sold in a perfectly competitive market. the market price of a fruit basket is $22. to maximize profits, exotic fruit should sell _______ fruit baskets. a) five b) three c) six d) four

a

table 11-1 shows the short run cost data of a perfectly competitive firm that produces plastic camera cases. assume that output can only be increased in batches of 100 units. refer to table 11-1. if the market price of each camera case is $8 and the firm maximizes profit, what is the amount of the firm's profit or loss? a) profit of $440 b) lost of $1,000 c) lost of $440 d) $0 (it breaks even)

b

the above table shows the per day total cost for Kiley's baseball glove company. each glove is priced at $50 and Kiley's baseball glove company is a perfectly competitive firm. at which of the following amounts of output is the economic profit maximized for Kiley's baseball glove company? a) 2 b) 5 c) 0 d) 8

a

the above table shows the per day total cost for Kiley's baseball glove company. each glove is priced at $50 and Kiley's baseball glove company is a perfectly competitive firm. between which two amounts of output does Kiley's baseball glove company earn an economic profit? a) 3 and 6 b) 0 and 8 c) 1 and 8 d) 2 and 7

c

the marginal revenue curve for a perfectly competitive firm a) is downward sloping b) is the same as its marginal cost curve c) is the same as its demand curve d) is perfectly inelastic

d

the short-run supply curve of a competitive firm is the portion of a) marginal cost curve that lies above its average total cost curve b) the average variable cost curve that lies above its marginal cost curve c) its average total cost curve that lies above its marginal cost curve d) its marginal cost curve that lies above its average variable cost curve

c

a perfectly competitive firm earns a profit when price is a) equal to minimum average fixed cost b) equal to minimum average variable cost c) above minimum average total cost d) equal to minimum average total cost

b

a perfectly competitive firm's marginal revenue a) is greater than price b) is equal to price c) may be either greater or less than, price depending on the quantity sold d) is less than price because a firm must lower its price to sell more

d

at the profit maximizing level of output for a perfectly competitive firm, a) price equals average revenue and marginal cost equals average variable cost b) marginal revenue equals marginal cost and average total cost equals average fixed cost c) average revenue equals average variable cost and price equals marginal cost d) price equals marginal cost

c

at the profit maximizing level of output for a perfectly competitive firm, price equals marginal cost. which of the following is also true? a) total revenue equals total cost b) average revenue equals average total cost c) the difference between total revenue and total cost is the greatest d) marginal profit equals marginal cost

b

firms that are price takers a) can raise their prices as a result of a successful advertising campaign b) are able to sell all their output at the market price c) must lower their prices to increase sales d) are able to sell a fixed quantity of output at the market price

b

firms in perfect competition are price takers because a) firms accept the price determined by the government b) each firm is too small relative to the market to be able to influence the price c) consumers have enough market power to set up prices d) one firm determines the price that all other firms in the industry will charge

c

if a typical firm in a perfectly competitive industry is incurring losses, then a) some firms will exit in the long run causing the market supply to decrease and market price to fall increasing losses for the remaining firms b) some firms will enter in the long run causing market supply to increase and market price to rise increasing profit for all firms c) some firms will exit in the long run causing market supply to decrease and market price to rise increasing profits for the remaining firms d) all firms will continue to lose money

d

if the market price is $40 is a perfectly competitive market, the marginal revenue from selling the fifth unit is a) $200 b) $8 c) $20 d) $40

d

if the market price is $40, the average revenue of selling five units is a) $8 b) $200 c) $20 d) $40

d

if total revenue exceeds fixed cost, a firm a) has covered its variable cost b) is making short-run profits c) should produce in the short run d) may or may not produce in the short run, depending on whether total revenue covers variable cost

a

if, for the last bushel of apples produced and sold by an apple farm marginal revenue exceeds marginal cost, then in producing that bushel the farm a) added more to total revenue than it added to total cost b) added an equal amount to both total revenue and total cost c) added more to total cost than it added to total revenue d) maximized its profits or minimized its losses

a

if, in a perfectly competitive industry, the market price facing a firm is above its average total cost at the output where marginal revenue equals marginal cost then a) new firms are attracted to the industry b) firms are breaking even c) existing firms will exit the industry d) market supply will remain constant