Econ 201 Chapters- 7,8,9, 10

For economists, the short run is a period of time in which, all inputs are fixed. no inputs are fixed. at least one input is fixed. nothing can be produced.

at least one input is fixed

refer to exhibit. Curve B is a(n)_ cost curve

average total

in microeconomics, the term_ is synonymous with economies of scale diminishing marginal returns increasing returns to scale decreasing returns to scale constant returns to scale

increasing returns to scale

In economic terms, a practical approach to maximizing profits requires an examination of how changes in production affect __________ and __________. total revenue; total cost marginal revenue; marginal cost total revenue; marginal cost marginal revenue; total cost

marginal revenue; marginal cost

In economics, a firm that faces no competitors is referred to as _. an oligopoly a monopoly a perfect competitor an oligopolizor

monopoly

if a firm is a price taker, its demand curve is downward sloping upward sloping perfectly inelastic perfectly elastic

perfectly elastic

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

preparing to exit operations.

The term __________ refers to a firm operating in a perfectly competitive market that must take the prevailing market price for its product. price setter business entity price taker trend setter

price taker

In the __________, the perfectly competitive firm will seek out __________. long run; the quantity of output where profits are highest short run; profits by ignoring the concept of total cost analysis short run; the quantity of output where profits are highest long run; methods to reduce production and shut down

short run; the quantity of output where profits are highest

If a firm's revenues do not cover its average variable costs, then that firm has reached its __________. price taking point shutdown point marginal point opportunity margin

shutdown point

Which of the following should typically be ignored because spending has already been made and cannot be changed? variable costs sunk costs marginal costs average marginal costs

sunk costs

Whatever the firm's quantity of production, _____________ must exceed total costs if it is to earn a profit. marginal costs average costs total revenue variable costs

total revenue

n a free market economy, firms operating in a perfectly competitive industry are said to have only one major choice to make. Which of the following correctly sets out that choice? what quantity to produce what price to charge what quantity of labor is needed what quality to produce

what quantity to produce

Profits are positive if at the profit maximizing quantity, P = ATC P > ATC P < ATC all of the above

P> ATC

___ help to explain why every economy, as it develops, has an increasing proportion of its population living in urban areas. economies of scale constant returns to scale agglomeration factors diseconomies of scale

agglomeration factors

An __________ is calculated by subtracting the firm's costs from its total revenues, __________. accounting profit; excluding opportunity cost accounting profit; including opportunity cost economic profit; excluding opportunity cost opportunity cost; including economic profit

accounting profit; excluding opportunity cost

A fixed input is an input whose quantity -can be changed as output changes in the short run. - cannot be changed as output changes in the short run - cannot be changed as output changes in the long run. a and b

cannot be changed as output changes in the short run.

According to the definition of profit, if a profit-maximizing firm will always attempt to produce its desired level of output at the lowest possible cost, then it will: - do so regardless of what type of competition exists in a market. - take a long-run perspective on costs, when such costs cannot be adjusted. - take a short-run perspective on labor costs which cannot be immediately changed. - breakdown its cost structure according to short-run adjustments.

do so regardless pf what type of competition exists in a market

The market demand curve in a perfectly competitive market is Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. downward sloping. upward sloping. perfectly horizontal. perfectly vertical. downward or upward sloping depending upon the type of product offered for sale.

downward sloping

The term __ describes a situation where the quantity of output rises, but the average cost of production falls. diminishing marginal returns marginal cost output economies of scale diseconomies of scale

economies of scale

In order to calculate marginal cost, the change in ______________ is divided by the amount of change in quantity. either total cost or average cost increasing marginal returns either total cost or variable cost decreasing marginal returns

either total cost or variable cost

If a firm earns normal profit, then it has generated revenues - equal to the sum of implicit costs greater than total opportunity costs - sufficient to cover explicit, but not implicit - sufficient to cover implicit costs, but not explicit costs.

equal to the sum of explicit and implicit costs

Accounting profits and economic profits measure the same thing and are always equal. True or false

false

The term _ is used to describe the additional cost of producing one more unit. average cost fixed cost variable cost marginal cost

marginal cost

___refers to the additional revenue gained from selling one more unit. marginal revenue total revenue economic profit accounting profit

marginal revenue

the price charged by a perfectly competitive firm is determined by: the firm's demand curve alone. the firm's cost curves alone. market demand and market supply, together. market demand alone. market supply alone.

market demand and market supply, together.

Perfect competition is a market structure in which many firms provide an identical product. true or false

true

the marginal cost curve is generally __, because diminishing marginal returns implies that additional units are ____. - downward-sloping; more costly to produce - upward-sloping; more costly to produce - downward-sloping; less costly to produce - upward-sloping; less costly to produce

upward- sloping, more costly to produce