ECON 130 - Assignments 9-15
https://laulima.hawaii.edu/samigo-app/servlet/ShowAttachmentMedia?resourceId=%2Fattachment%2FMAN.79601.202310%2FTests+_+Quizzes%2Fc3e54e51-0416-4def-8bb9-c413e8b07d8d%2Fps11_1.png&mimeType=image/png&filename=ps11_1.png Common Grounds is the only seller of cappuccinos in town. The table below shows the market demand for cappuccinos in the town. Using this information, please answer the following questions.(P: Price, Q: Quantity Produced, TR: Total Revenue, AR: Average Revenue, MR: Marginal Revenue) What is the total revenue at Q=5? Answer = $ ___ What is the MR of increasing sales from Q=3 to Q=4? Answer = $ ___
$ 10 $ 1
https://laulima.hawaii.edu/samigo-app/servlet/ShowAttachmentMedia?resourceId=%2Fattachment%2FMAN.79601.202310%2FTests+_+Quizzes%2F7ff972e3-ee53-4fbb-ad51-037e3c79e3bd%2Fps10_1.png&mimeType=image/png&filename=ps10_1.png Referring to the information in the table below for a small company, please answer the following questions.(P: Price, Q: Quantity Produced, TR: Total Revenue, AR: Average Revenue, MR: Marginal Revenue) What is the total revenue at Q=3? Answer = $ ___ What is the MR of increasing sales from Q=3 to Q=4? Answer = $ ___
$ 30 $ 10
https://laulima.hawaii.edu/samigo-app/servlet/ShowAttachmentMedia?resourceId=%2Fattachment%2FMAN.79601.202310%2FTests+_+Quizzes%2F73ac5cf7-9931-4aa8-9685-79b15c44cd47%2Fps9_3.png&mimeType=image/png&filename=ps9_3.png Referring to the information in the table below for a small company, please answer the following questions.(Q: Quantity Produced, VC: Variable Cost, TC: Total Cost, AFC: Average Fixed Cost, AVC: Average Variable Cost, ATC: Average Total Cost, MC: Marginal Cost) What is the fixed cost of production? Answer = $ ___ What is the VC at Q=3? Answer = $ ___ What is the ATC at Q=5? Answer = $ ___ What is the AVC at Q=4? Answer = $ ___ What is the MC of increasing production from Q=3 to Q=4? Answer = $ ___
$ 50 $ 60 $ 40 $ 25 $ 40
https://laulima.hawaii.edu/samigo-app/servlet/ShowAttachmentMedia?resourceId=%2Fattachment%2FMAN.79601.202310%2FTests+_+Quizzes%2Fa3177907-a925-40f0-8727-8158a29b6a62%2Fps10_2.png&mimeType=image/png&filename=ps10_2.png Referring to the graph below for a small competitive firm in the short-run where the market price is given to be $10, please answer the following questions. (P: Price, Q: Quantity Produced, TR, MR: Marginal Revenue, MC: Marginal Cost, ATC: Average Total Cost) What is the optimal quantity produced by the firm? Answer = ___ units What is the price set by this (small, competitive) firm? Answer = $ ___ What is the firm's total profit? Answer = $ ___
50 units $ 10 $ 200
Referring to the table, what is the average revenue when 4 units are sold? A. $120 B. $125 C. $60 D. $197
A. $120
Referring to the table, what is the value of H? A. $50 B. $0 C. $270 D. $220
A. $50
Referring to the table, what is the marginal cost of the 5th unit? A. $68 B. $80 C. $55 D. $60
A. $68
Referring to the table, what is the total revenue from selling 7 units? A. $840 B. $490 C. $120 D. $562
A. $840
Referring to the table, over what range of output is marginal revenue declining? A. Marginal revenue is constant over the entire range of output. B. 1 to 6 units C. 7 to 9 units D. 3 to 7 units
A. Marginal revenue is constant over the entire range of output.
Referring to the figure, when price rises from P2 to P3, the firm finds that A. expanding output to Q4 would leave the firm with losses. B. if it produces at output level Q3 it will earn a positive profit. C. marginal cost exceeds marginal revenue at a production level of Q2. D. it could increase profits by lowering output from Q3 to Q2.
A. expanding output to Q4 would leave the firm with losses.
Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when no workers are hired. In addition, suppose that when four units of output are produced, the total cost is $175, and the average variable cost is $33.75. What would the average fixed cost be if ten units were produced? A. $4 B. $10 C. $135 D. $40
A. $4
https://laulima.hawaii.edu/samigo-app/servlet/ShowAttachmentMedia?resourceId=%2Fattachment%2FMAN.79601.202310%2FTests+_+Quizzes%2Fdc4aa169-4b7d-4460-8a29-2fbbd8d969c9%2Fps11_2.png&mimeType=image/png&filename=ps11_2.png A. $420. B. $600. C. $240. D. $480.
A. $420.
Trevor's Tire Company produced and sold 500 tires. The average cost of production per tire was $50. Each tire sold for a price of $65. Trevor's Tire Company's total profits are A. $7,500. B. $32,500. C. $25,000. D. $67,500.
A. $7,500.
Suppose that a monopolist can sell 5 units of output at a price of $5 or 6 units of output at a price of $4. What is the marginal revenue of the sixth unit? A. -$1 B. $10 C. $24 D. $49
A. -$1
In the long-run equilibrium in a competitive market, the marginal firm has A. All of the choices are correct. B. economic profit equal to zero. C. price equal to average total cost. D. total revenue equal to total cost.
A. All of the choices are correct.
Which of the following is not a characteristic of a perfectly competitive market? A. Firms have difficulty entering the market. B. Goods offered for sale are largely the same. C. Firms are price takers. D. There are many sellers in the market.
A. Firms have difficulty entering the market.
An uncongested non-toll road is which of the four kinds of goods? A. Public good B. Club good C. Common resource D. Private good
A. Public good
Whenever marginal cost is greater than average total cost, A. average total cost is rising. B. marginal cost is falling. C. average total cost is falling. D. Both b and c are correct.
A. average total cost is rising.
Bob owns 5 acres of land. Bob sells the land to a real estate developer who builds a subdivision with 10 houses. The land is an example of a good that is A. both rival in consumption and excludable. B. excludable, but not rival in consumption. C. neither rival in consumption nor excludable. D. rival in consumption, but not excludable.
A. both rival in consumption and excludable.
Tom produces commemorative t-shirts in a competitive market. If Tom decides to decrease his output, this will A. decrease his revenue, since his output has decreased and the price remains the same. B. increase his revenue, since Tom's competitors will also decrease their output, so that price rises to offset the drop in Tom's output. C. decrease his revenue, since the price does not rise sufficiently when output drops to offset the drop in Tom's output. D. increase his revenue, since the output decrease leads to a higher market price.
A. decrease his revenue, since his output has decreased and the price remains the same.
If the total cost curve gets steeper as output increases, the firm is experiencing A. diminishing marginal product. B. increasing marginal product. C. economies of scale. D. diseconomies of scale.
A. diminishing marginal product.
If a firm in a perfectly competitive market triples the quantity of output sold, then total revenue will A. exactly triple. B. Any of the choices may be true depending on the firm's labor productivity. C. more than triple. D. less than triple.
A. exactly triple.
Competitive markets are characterized by A. free entry and exit by firms. B. a small number of buyers and sellers. C. the interdependence of firms. D. unique products.
A. free entry and exit by firms.
The government provides public goods because A. free-riders make it difficult for private markets to supply the socially optimal quantity. B. private markets are incapable of producing these types of goods. C. markets are always better off with some government oversight. D. external benefits will accrue to private producers.
A. free-riders make it difficult for private markets to supply the socially optimal quantity.
A firm has market power if it can A. influence the market price of the good it sells. B. minimize costs. C. hire as many workers as it needs at the prevailing wage rate. D. maximize profits.
A. influence the market price of the good it sells.
The monopolist's profit-maximizing quantity of output is determined by the intersection of which of the following two curves? A. marginal cost and marginal revenue B. average total cost and marginal revenue C. average variable cost and average revenue D. marginal cost and demand
A. marginal cost and marginal revenue
Each of the following would be considered a common resource except a A. streetlight. B. a congested road. C. water reservoir. D. book from a public library.
A. streetlight.
If a firm produces nothing, which of the following costs will be zero? A. variable cost B. opportunity cost C. total cost D. fixed cost
A. variable cost
Referring to the figure, if the market price is $10 in this perfectly competitive market, what is the firm's short-run economic profit? A. $30 B. $15 C. $50 D. $9
B. $15
Referring to the table, what is the value of G? A. $30 B. $270 C. $220 D. $120
B. $270
Referring to the table, what is the marginal revenue from selling the 5th unit? A. $480 B. $80 C. $68 D. $12
B. $80
If Kevin's children run a lemonade stand for a day and sell 200 glasses of lemonade at $0.50 each, their total revenues are A. $200. B. $100. C. $400. D. $199.50.
B. $100.
Suppose a firm in a competitive market produces and sells 8 units of output and has a marginal revenue of $8. What would be the firm's total revenue if it instead produced and sold 4 units of output? A. $64 B. $32 C. $4 D. $8
B. $32
In the long run, a firm that produces and sells textbooks gets to choose A. how many workers to hire. B. All of the choices are correct. C. which short-run average-total-cost curve to use. D. the size of its factories.
B. All of the choices are correct.
Which of the following is a characteristic of a natural monopoly? A. Fixed costs are typically a small portion of total costs. B. Average total cost declines over large regions of output. C. The product sold is a natural resource such as diamonds or water. D. All of the above are correct.
B. Average total cost declines over large regions of output.
An uncongested toll road is which of the four kinds of goods? A. Public good B. Club good C. Common resource D. Private good
B. Club good
The equilibrium rent on office space has just increased by $500/month. Determine the effects on accounting profit and economic profit if you own your office space. A. Accounting profit falls by $500/month. B. Economic profit falls by $500/month. C. Both a and b. D. None of the above.
B. Economic profit falls by $500/month.
The rise of the Internet and file sharing has turned media such as movies and music into public goods. How? A. It has made those goods nonrival. B. It has made those goods nonexcludable. C. It has made those goods excludable. D. It has made those goods rival.
B. It has made those goods nonexcludable.
https://laulima.hawaii.edu/samigo-app/servlet/ShowAttachmentMedia?resourceId=%2Fattachment%2FMAN.79601.202310%2FTests+_+Quizzes%2Fe16a7404-92be-4a67-b083-ff7039b2284c%2Fps11_2.png&mimeType=image/png&filename=ps11_2.png A. P = $6.00; Q = 40 B. P = $16.50; Q = 40 C. P = $3.00; Q = 40 D. P = $6.00; Q = 80
B. P = $16.50; Q = 40
A congested toll road is which of the four kinds of goods? A. Common resource B. Private good C. Public good D. Club good
B. Private good
Which of the following is not a reason why government agencies subsidize basic research? A. The social benefit of additional knowledge is perceived to be greater than the cost of the subsidies. B. The government wants to attract the brightest researchers away from private research firms. C. The private market devotes too few resources to basic research. D. The general knowledge developed through basic research can be used without charge.
B. The government wants to attract the brightest researchers away from private research firms.
Under which of the following scenarios would a park be considered a common resource? A. Visitors can enter the park free of charge and there are always plenty of empty picnic tables. B. Visitors can enter the park free of charge, but frequently all of the picnic tables are in use. C. Visitors to the park must pay an admittance fee and frequently all of the picnic tables are in use. D. Visitors to the park must pay an admittance fee, but there are always plenty of empty picnic tables.
B. Visitors can enter the park free of charge, but frequently all of the picnic tables are in use.
The idea that "externalities arise because something of value has no price attached to it" is associated with A. public goods, but not with common resources. B. both public goods and common resources. C. neither public goods nor common resources. D. common resources, but not with public goods.
B. both public goods and common resources.
When the marginal product of an input declines as the quantity of that input increases, the production function exhibits A. increasing marginal product. B. diminishing marginal product. C. diminishing total product. D. Both b and c are correct.
B. diminishing marginal product.
Four friends decide to meet at a Chinese restaurant for dinner. They decide that each person will order an item off the menu, and they will share all dishes. They will split the cost of the final bill evenly among each of the people at the table. A Tragedy of the Commons problem is likely for each of the following reasons except A. when one person eats, he may not take into account how his choice affects his friends. B. each dish would be both excludable and rival in consumption. C. each person has an incentive to eat as fast as possible since their individual rate of consumption will not affect their individual cost. D. there is an externality associated with eating the food on the table.
B. each dish would be both excludable and rival in consumption.
In the long run a company that produces and sells candy bars incurs total costs of $1,200 when output is 2,400 candy bars and $1,400 when output is 2,900 candy bars. The candy bar company exhibits A. diseconomies of scale because total cost is rising as output rises. B. economies of scale because average total cost is falling as output rises. C. diseconomies of scale because average total cost is rising as output rises. D. economies of scale because total cost is rising as output rises.
B. economies of scale because average total cost is falling as output rises.
In a competitive market with identical firms, A. firms can earn positive economic profit in the long run if the long-run market supply curve is upward sloping. B. free entry and exit into the market requires that firms earn zero economic profit in the long run even though they may be able to earn positive economic profit in the short run. C. an increase in demand in the short run will result in a new price above the minimum of average total cost, allowing firms to earn a positive economic profit in both the short run and the long run. D. firms cannot earn positive economic profit in either the short run or long run.
B. free entry and exit into the market requires that firms earn zero economic profit in the long run even though they may be able to earn positive economic profit in the short run.
Bubba is a shrimp fisherman who could earn $5,000 as a fishing tour guide. Instead, he is a full-time shrimp fisherman. In calculating the economic profit of his shrimp business, the $5,000 that Bubba gave up is counted as part of the shrimp business's A. explicit costs. B. implicit costs. C. marginal costs. D. total revenue.
B. implicit costs.
An example of an explicit cost of production would be the A. lost opportunity to invest in capital markets when the money is invested in one's business. B. lease payments for the land on which a firm's factory stands. C. cost of forgone labor earnings for an entrepreneur. D. None of the choices are correct.
B. lease payments for the land on which a firm's factory stands.
When a firm's only variable input is labor, then the slope of the production function measures the A. quantity of output. B. marginal product of labor. C. total cost. D. quantity of labor.
B. marginal product of labor.
Roger owns a small health store that sells vitamins in a perfectly competitive market. If vitamins sell for $12 per bottle and the average total cost per bottle is $11.50 at the profit-maximizing output level, then in the long run A. the equilibrium price per bottle will rise. B. more firms will enter the market. C. some firms will exit from the market. D. average total costs will rise.
B. more firms will enter the market.
At the local park there is a playground that anyone may use. There is rarely anyone using the playground, so children who use the playground receive full enjoyment from its use. The playground is A. rival in consumption, but is not excludable. B. not rival in consumption nor is it excludable. C. rival in consumption and is excludable. D. not rival in consumption, but is excludable.
B. not rival in consumption nor is it excludable.
Which categories of goods are excludable? A. private goods and common resources B. private goods and club goods C. public goods and club goods D. public goods and common resources
B. private goods and club goods
A competitive firm has been selling its output for $10 per unit and has been maximizing its profit. Then, the price rises to $14, and the firm makes whatever adjustments are necessary to maximize its profit at the now-higher price. Once the firm has adjusted, its A. marginal cost is lower than it was previously. B. quantity of output is higher than it was previously. C. marginal revenue is lower than it was previously. D. All of the choices are correct.
B. quantity of output is higher than it was previously.
The Tragedy of the Commons for sheep grazing on common land can be eliminated by the government doing each of the following except A. assigning land property rights. B. subsidizing sheep flocks. C. taxing sheep flocks. D. auctioning off sheep-grazing permits.
B. subsidizing sheep flocks.
In a market with 1,000 identical firms, the short-run market supply is the A. quantity supplied by the typical firm in the market at each price. B. sum of the quantities supplied by each of the 1,000 individual firms at each price. C. marginal cost curve above average variable cost for a typical firm in the market. D. sum of the prices charged by each of the 1,000 individual firms at each quantity.
B. sum of the quantities supplied by each of the 1,000 individual firms at each price.
Governments can grant private property rights over resources that were previously viewed as public, such as fish or elephants. Why would governments want to do so? A. to increase consumption B. to prevent overuse C. to fight poverty D. to decrease taxes
B. to prevent overuse
Which of the following can be added to profit to obtain total revenue? A. capital profit B. total cost C. operational profit D. net profit
B. total cost
Referring to the table, what is the value of M? A. $50 B. $140 C. $410 D. $360
C. $410
Which of the following is a point on the long-run supply curve? A. P=$5, Q=500. B. P=$6, Q=1,000. C. P=$5, Q=1,500. D. P=$10, Q=500.
C. P=$5, Q=1,500.
Referring to the figure, as the number of workers increases, A. marginal product increases at an increasing rate. B. total output decreases. C. total output increases but at a decreasing rate. D. marginal product increases but at a decreasing rate.
C. total output increases but at a decreasing rate.
Cindy's Car Wash has average variable costs of $2 and average fixed costs of $3 when it produces 100 units of output (car washes). The firm's total cost is A. $300. B. $100. C. $500. D. $200.
C. $500.
Suppose that a firm has only one variable input, labor, and firm output is zero when labor is zero. When the firm hires 6 workers it produces 90 units of output. Fixed cost of production are $6 and the variable cost per unit of labor is $10. The marginal product of the seventh unit of labor is 4. Given this information, what is the total cost of production when the firm hires 7 workers? A. $906 B. $66 C. $76 D. $946
C. $76
Kate is a florist. Kate can arrange 20 bouquets per day. She is considering hiring her husband William to work for her. Together Kate and William can arrange 35 bouquets per day. What is William's marginal product? A. 22.5 bouquets B. 35 bouquets C. 15 bouquets D. 55 bouquets
C. 15 bouquets
The equilibrium rent on office space has just increased by $500/month. Determine the effects on accounting profit and economic profit if you rent your office space. A. Accounting profit falls by $500/month. B. Economic profit falls by $500/month. C. Both a and b. D. None of the above.
C. Both a and b.
A congested non-toll road is which of the four kinds of goods? A. Club good B. Private good C. Common resource D. Public good
C. Common resource
Who probably has more elastic demand for a Hertz rental car? Person A reserves a car online weeks before a trip; person B walks up to a Hertz counter after he walks off an airplane after a four-hour flight? Who probably gets charged more? A. Person B a more elastic demand and will be charged less. B. Person A has a more elastic demand and will be charged more. C. Person A has a more elastic demand and will be charged less. D. Person B has a more elastic demand and will be charged more.
C. Person A has a more elastic demand and will be charged less.
For a firm operating in a competitive industry, which of the following statements is not correct? A. Marginal revenue is constant. B. Price equals marginal revenue. C. Total revenue is constant. D. Price equals average revenue.
C. Total revenue is constant.
A firm produces 400 units of output at a total cost of $1,200. If total variable costs are $1,000 at 400 units of output, A. average total cost is $2.50. B. average total cost is 50 cents. C. average fixed cost is 50 cents. D. average variable cost is $2.
C. average fixed cost is 50 cents.
When a firm is operating at an efficient scale, A. average variable cost is minimized. B. marginal cost is minimized. C. average total cost is minimized. D. average fixed cost is minimized.
C. average total cost is minimized.
When adding another unit of labor leads to an increase in output that is smaller than the increases in output that resulted from adding previous units of labor, the firm is experiencing A. diminishing output. B. negative marginal product. C. diminishing marginal product. D. diminishing labor.
C. diminishing marginal product.
In the long run a company that produces and sells organic tofu incurs total costs of $1,200 when output is 1,200 units and $1,650 when output is 1,400 units. The tofu company exhibits A. diseconomies of scale because total cost is rising as output rises. B. economies of scale because average total cost is falling as output rises. C. diseconomies of scale because average total cost is rising as output rises. D. economies of scale because total cost is rising as output rises.
C. diseconomies of scale because average total cost is rising as output rises.
A monopolist's average revenue is always A. equal to marginal revenue. B. greater than the price of its product. C. equal to the price of its product. D. less than the price of its product.
C. equal to the price of its product.
Some costs do not vary with the quantity of output produced. Those costs are called A. marginal costs. B. average costs. C. fixed costs. D. explicit costs.
C. fixed costs.
In the short run, a firm that produces and sells house paint can adjust A. All of the choices are correct. B. where to produce along its long-run average-total-cost curve. C. how many workers to hire. D. the size of its factories.
C. how many workers to hire.
Because monopoly firms do not have to compete with other firms, the outcome in a market with a monopoly A. maximizes total economic well-being. B. is efficient. C. is often not in the best interest of society. D. benefits consumers more so than the producer.
C. is often not in the best interest of society.
In order to sell more of its product, a monopolist must A. sell to the government. B. use its market power to force up the price of complementary products. C. lower its price. D. sell in international markets.
C. lower its price.
In the short-run, a firm's supply curve is equal to the A. marginal cost curve above its average total cost curve. B. average variable cost curve above its marginal cost curve. C. marginal cost curve above its average variable cost curve. D. average total cost curve above its marginal cost curve.
C. marginal cost curve above its average variable cost curve.
When profit-maximizing firms in competitive markets are earning profits, A. market demand must exceed market supply at the market equilibrium price. B. the most inefficient firms will be encouraged to leave the market. C. new firms will enter the market. D. market supply must exceed market demand at the market equilibrium price.
C. new firms will enter the market.
For a firm, the production function represents the relationship between A. quantity of output and total cost. B. quantity of inputs and total cost. C. quantity of inputs and quantity of output. D. implicit costs and explicit costs.
C. quantity of inputs and quantity of output.
Farmer McDonald sells wheat to a broker in Kansas City, Missouri. Because the market for wheat is generally considered to be competitive, Mr. McDonald maximizes his profit by choosing A. to produce the quantity at which average variable cost is minimized. B. to produce the quantity at which average fixed cost is minimized. C. the quantity at which market price is equal to Mr. McDonald's marginal cost of production. D. the quantity at which market price exceeds Mr. McDonald's marginal cost of production by the greatest amount.
C. the quantity at which market price is equal to Mr. McDonald's marginal cost of production.
Without government intervention, public goods tend to be A. overproduced and common resources tend to be overconsumed. B. underproduced and common resources tend to be underconsumed. C. underproduced and common resources tend to be overconsumed. D. overproduced and common resources tend to be underconsumed.
C. underproduced and common resources tend to be overconsumed.
Referring to the table, what is the value of K? A. $220 B. $50 C. $25 D. $110
D. $110
Referring to the table, what is Bill's economic profit at the profit-maximizing output level? A. $225 B. $25 C. $75 D. $115
D. $115
Referring to the table, what is the marginal revenue from selling the 3rd unit? A. $137 B. $55 C. $140 D. $120
D. $120
Referring to the table, at what quantity does Bill maximize profits? A. 8 B. 3 C. 7 D. 6
D. 6
Referring to the table, over which range of output is average revenue equal to price? A. 5 to 9 units B. 3 to 7 units C. 1 to 5 units D. Average revenue is equal to price over the entire range of output.
D. Average revenue is equal to price over the entire range of output.
Referring to the table, if the firm doubles its output from 3 to 6 units, total revenue will A. increase by less than $15. B. Total revenue cannot be determined from the information provided. C. increase by more than $15. D. increase by exactly $15.
D. increase by exactly $15.
Larry's Lunchcart is a small street vendor business. If Larry makes 15 pretzels in his first hour of business and incurs a total cost of $16.50, his average total cost per pretzel is A. $6.50. B. $16.50. C. $1.10. D. $15.00.
D. $15.00.
If your local gasoline station raised its price by 20 percent, its sales of gasoline would decrease substantially because your local gas station A. has little or no market power. B. is small relative to the size of the gasoline market. C. is a competitive firm. D. All of the choices are correct.
D. All of the choices are correct.
London started charging a fee to drive in certain parts of the city during peak traffic times. This fee was imposed to address the problem of traffic congestion. It has reduced congestion where it has been applied. This fee has: A. encouraged consumers to drive less than they otherwise would. B. encouraged consumers to drive at times when traffic congestion is less of a problem. C. made a common resource excludable: those who pay for the right to drive can drive, and those unwilling to pay must forgo driving. D. Answers (a), (b), and (c) are true.
D. Answers (a), (b), and (c) are true.
Which of the following statements is correct? A. Assuming that implicit costs are positive, economic profit is positive. B. Assuming that explicit costs are positive, economic profit is greater than accounting profit. C. Assuming that explicit costs are positive, accounting profit is equal to economic profit. D. Assuming that implicit costs are positive, accounting profit is greater than economic profit.
D. Assuming that implicit costs are positive, accounting profit is greater than economic profit.
On a 100-acre farm, a farmer is able to produce 3,000 bushels of wheat when he hires 2 workers. He is able to produce 4,400 bushels of wheat when he hires 3 workers. Which of the following possibilities is consistent with the property of diminishing marginal product? A. The farmer is able to produce 5,800 bushels of wheat when he hires 4 workers. B. The farmer is able to produce 6,000 bushels of wheat when he hires 4 workers. C. Any of the choices could be correct. D. The farmer is able to produce 5,600 bushels of wheat when he hires 4 workers.
D. The farmer is able to produce 5,600 bushels of wheat when he hires 4 workers.
In the transition from the short run to the long run, the number of firms in a competitive industry is A. decreasing. B. fixed. C. increasing at a constant rate. D. able to adjust to market conditions.
D. able to adjust to market conditions.
If a competitive firm is currently producing a level of output at which marginal cost exceeds marginal revenue, then A. the firm is earning a positive profit. B. All of the choices are correct. C. average revenue exceeds marginal cost. D. decreasing output would increase the firm's profit.
D. decreasing output would increase the firm's profit.
Which categories of goods are rival in consumption? A. public goods and club goods B. private goods and club goods C. public goods and common resources D. private goods and common resources
D. private goods and common resources
Which of the following represents the firm's short-run condition for shutting down? A. shut down if TR < TC B. shut down if TR < FC C. shut down if P < ATC D. shut down if TR < VC
D. shut down if TR < VC
Entry into a market by new firms will increase the A. profits of existing firms. B. price of the good. C. marginal cost of producing the good. D. supply of the good.
D. supply of the good.
Which of the following is not a way for the government to solve the problem of excessive use of common resources? A. regulation B. taxes C. turning the common resource into a private good D. turning the common resource into a public good
D. turning the common resource into a public good
