Week 9 ch 7&8

34. Average fixed cost at 20 units of total product is A. 400 B. 20 C. 2.67 D. 3.45

B

6. When a business adopts a strategy of reducing and/or discontinuing production in the long run in response to a sustained pattern of losses, it is A. considering opportunity costs. B. preparing to exit operations. C. preparing to reach its shutdown point. D.considering capital investments

B

8. Economic profit can be derived from calculating total revenues minus all of the firm's total costs, A. excluding its opportunity costs. B. including its opportunity costs. C. including its marginal revenue. D. excluding its marginal revenue

B

9. Perfect competition requires which of these conditions? A. Zero opportunity costs B. Many sellers C. Control over the price D. Differentiated products

B

39. Average total cost at 92 units of total product is A. 400 B. 20 C. 6.96 D. 24

C

4. In economics, the term "shutdown point" refers to the point where the A. marginal cost curve crosses the total revenue curve. B. average variable cost curve crosses the total revenue curve. C. average variable cost curve crosses the marginal cost curve. D. marginal cost curve crosses the average variable cost curve

C

40. Total revenue at 92 units of total product is A. 400 B. 1200 C. 1840 D. 2160

C

5. A manufacturer would likely make an ___________________ in a market following the long-run process of beginning and expanding production in response to ____________ A. accounting profit; a strategy to grow profits B. accounting profit; an incentive for profit C. entry; a sustained pattern of profits D. entry; an incentive to add to profits

C

1. The term _______________ refers to a firm operating in a perfectly competitive market that must take the prevailing market price for its product. A. price setter B. business entity C. price taker D. trend setter

C

16. Marginal product of labor for 5 units of labor is A. 20 B. 40 C. 8 D. 32

C

20. Variable cost at 6 units of labor is A. 80 B. 480 C. 320 D. 160

C

21. Fixed cost at 2 units of labor is A. 80 B. 480 C. 400 D. 160

C

22. Fixed cost at 0 units of labor is A. 0 B. 480 C. 400 D. 160

C

23. Fixed cost at 6 units of labor is A. 80 B. 480 C. 400 D. 160

C

24. Total cost at 2 units of labor is A. 400 B. 480 C. 560 D. 880

C

36. Average fixed cost at 120 units of total product is A. 4 B. 20 C. 3.33 D. 3.45

C

For the questions that follow consider this short-run case-study: Capital is fixed at 1 unit and labor can vary from 0 to 6 units. Each capital unit costs $400 and each labor unit costs $80. Price of the product is $20/unit. Total product is respectively, 0 20 60 92 108 116 120 15. Marginal product of labor for 3 units of labor is A. 20 B. 40 C. 8 D. 32

D

37. Average total cost at 20 units of total product is A. 400 B. 20 C. 2.67 D. 24

D

10. Perfect competition requires which of these conditions? A. Perfect information B. Few sellers C. Control over the price D. Differentiated products

A

11. In the case study of the fishing industry in India discussed in class, the major condition of perfect competition missing was A. Perfect information B. Few sellers C. Control over the price D. Differentiated products

A

2. ____________ refers to the additional revenue gained from selling one more unit. A. Marginal revenue B. Total revenue C. Economic profit D. Accounting profit

A

27. Total cost at 0 units of labor is A. 400 B. 480 C. 560 D. 880

A

30. Marginal cost at 1 unit of labor is A. 4 B. 20 C. 2.5 D. 2

A

31. Average variable cost at 20 units of total product is A. 4 B. 20 C. 2.67 D. 3.45

A

32. Average variable cost at 120 units of total product is A. 4 B. 20 C. 2.67 D. 3.45

A

38. Average total cost at 116 units of total product is A. 6.9 B. 20 C. 2.67 D. 24.33

A

7. An _________________ is calculated by subtracting the firm's total costs from its total revenues, _______________________. A. accounting profit; excluding opportunity cost B. accounting profit; including opportunity cost C. economic profit; excluding opportunity cost D. opportunity cost; including economic profit

A

13. Perfect competition requires which of these conditions? A. Zero opportunity costs B. Perfect entry and exit C. Control over the price D. Differentiated products

B

17. Marginal product of labor for 6 units of labor is A. 2 B. 4 C. 8 D. 3

B

29. Marginal cost at 6 units of labor is A. 4 B. 20 C. 2.5 D. 2

B

3. If a firm's price does not cover its average variable costs, then that firm has reached its ________________. A. price taking point B. shutdown point C. marginal point D. opportunity margin

B

12. Perfect competition requires which of these conditions? A. Zero opportunity costs B. Zero sellers C. Control over the price D. Nondifferentiated products

D

14. While the market demand under perfect competition will be _____________ , the individual seller will face a demand curve that is ____________ A. Upward sloping, perfectly inelastic B. Perfect for entry, perfect for exit C. Controlled, out of control D. Downward sloping, perfectly elastic

D

18. Variable cost at 2 units of labor is A. 80 B. 480 C. 320 D. 160

D

25. Total cost at 6 units of labor is A. 400 B. 480 C. 560 D. 880

D

26. Total cost at 4 units of labor is A. 400 B. 640 C. 800 D. 720

D

28. Marginal cost at 2 units of labor is A. 4 B. 20 C. 2.5 D. 2

D

33. Average variable cost at 108 units of total product is A. 4 B. 20 C. 2.67 D. 2.96

D

35. Average fixed cost at 116 units of total product is A. 400 B. 20 C. 2.67 D. 3.45

D

41. Total revenue at 108 units of total product is A. 400 B. 1200 C. 1840 D. 2160

D

42. Marginal revenue at 120 units of total product is A. 40 B. 12 C. 10 D. 20

D

43. Marginal revenue at 60 units of total product is A. 40 B. 12 C. 10 D. 20

D

44. Total cost at 120 units of total product is A. 400 B. 480 C. 800 D. 880

D