TTU ECON 2305 EXAM 2
Output (balloons per hour)/Total Cost (dollars per hour) 0/$4.00 1/$7.00 2/$8.00 3/$12.50 4/$17.20 5/$22.00 6/$29.00 In the above table, the average fixed cost at 4 units of output is
$1.00
Quantity sold/Price 5/$15 6/$15 7/$15 In the above table, if the quantity sold by the firm rises from 5 to 6, its marginal revenue is
$15
An example of a variable factor of production in the short run is
an employee
In the figure above, curve A is the ________ curve
marginal cost
A perfectly competitive firm's economic profit is maximized by producing the amount of output such that
marginal revenue equals marginal cost
In a perfectly competitive market, which of the following determines the market price?
market demand and market supply
In the United States, resources are most often allocated by
market price
In the long run, a firm has
no factors of production that are fixed
In the short run, a firm will
produce and incur an economic loss if its total revenue covers its total variable cost but not its total cost
A period of time in which the quantity of at least one factor of production used by a firm is fixed is called the
short run
In the short run a perfectly competitive firm will
shut down if P < AVC
After constructing a new factory, the cost of building the factory is a
sunk cost
Marginal cost is equal to
the change in total cost divided by the change in output
A market is perfectly competitive if
there are many firms in it, each selling an identical product
Total economic profit is
total revenue minus total opportunity cost
In the above figure, if the price is $2, then the total consumer surplus is
triangle abc
A firm's total cost (TC) equals the sum of its fixed cost plus its
variable cost
The marginal revenue curve for a perfectly competitive firm is
a horizontal line
A market demand curve is constructed by
a horizontal summation of each individual demand curve
Output (pies)/Total variable cost (dollars)/Total cost (dollars) 0/0/300 100/400/- 200/1,000/- 300/1,800/- 400/2,800/- The above table gives some of the costs of the Delicious Pie Company. The marginal cost of increasing pie output from 200 to 300 pies equals ________ per pie
$8
Labor (workers)/Output (bikes)/Total fixed costs (dollars)/Total variable cost (dollars)/Total cost (dollars) 0/0/200/-/- 1/20/-/100/- 2/50/-/-/- 3/60/-/-/- 4/64/-/-/- The table above gives costs at Jan's Bike Shop. Unfortunately, Jan's record keeping has been spotty. Each worker is paid $100 a day. Labor costs are the only variable costs of production. What is the total variable cost of producing 60 bikes?
$300
The figure illustrates the market for hot dogs on Big Foot Island. The producer surplus is ________
$60 an hour
At point d in the above figure, the average product of labor equals
3.75
Labor (workers)/Total product (pizzas produced per hour) 0/0 1/5 2/9 3/12 4/14 5/15 Using the data in the above table, what is the marginal product of the second worker?
4 pizzas per hour
The marginal cost (MC) curve intersects the
ATC and AVC curves at their minimum points
A perfectly competitive firm is making an economic profit when
Both answers A and B are correct A)the price is greater than the minimum of its average total cost B) its total revenue is greater than its total cost
A price ________ is a regulated ________ that must be set below the equilibrium price to have an effect
ceiling; price
In a perfectly competitive market, if a firm finds it is producing an amount of output such that its marginal cost exceeds its price, it will
decrease its output to increase its profit
The costs incurred even when no output is produced are called
fixed costs
Imposing a minimum wage that is above the equilibrium wage rate results in
higher job search costs