Microecon Module 6

अब Quizwiz के साथ अपने होमवर्क और परीक्षाओं को एस करें!

Physical Capital

Machines and equipment that can be used for production.

The graph to the right shows the average total cost​ (ATC), average variable cost​ (AVC), marginal cost​ (MC), and marginal revenue​ (MR) curves for a firm in a perfectly competitive market. In order to maximize​ profits, this firm should produce approximately ___________ units of output

11

Using the same table​, what is the marginal cost of the second unit​ produced?

11

Producer surplus is

40.50

Law of diminishing returns

Increases in inputs eventually lead to less additional output.

In a perfectly competitive​ market, all of the following statements are true​ except:

Marginal revenue is equal to price times quantity.

In the long​ run, which of the following factors of production is fixed for a​ firm?

None of the above

Long run

Period of time when all of a​ firm's inputs can be varied.

Short run

Period of time when at least one of a​ firm's inputs is fixed.

Marginal product

The change in total production associated with using one more unit of input.

In a perfectly competitive​ market, all of the following are true​ except:

The market supply cannot affect the retail price

All of the following could cause an increase in producer surplus​ except:

an upward shift in the marginal cost curve

If the firm were facing MR 2​, then we know that this firm should​ __________.

keep​ producing, even though it is incurring a loss it is less than the fixed costs that must be paid if it shuts down.

If the firm were facing MR 1​, then we know that this firm should​ __________.

keep​ producing, since it is making a profit at the​ profit-maximizing output.

The aggregate difference between the average total cost ​(ATC​) and average variable cost ​(AVC​) for all units of production is​ the:

the total fixed cost

This occurs because _________.

there are many producers all selling identical​ goods, meaning no one firm can impact the market price

If it costs a firm ​$3,000 to produce 400 shirts and ​$6,500 to produce 900 ​shirts, then:

the firm is experiencing economies of scale.

In a competitive​ market, if economic profits​ exist, then:

the market supply curve will shift rightward and the price will decrease.

Using your​ graph, the slope of the industry demand curve demonstrates​ __________.

the realistic assumption that the Law of Demand holds for the good under consideration.

The production function​ is:

the relationship between the quantity of inputs used and the quantity of outputs produced.

A company pays each of its workers on a per diem basis. If another worker is​ hired, ____________ costs will increase while ________ costs will remain the same.

1. variable 2. fixed

In a perfectly competitive​ market, an increase in market price shifts the marginal revenue​ (MR) curve ____, _________ the quantity supplied.

1. up 2. increasing

For 12,500 units of​ production, total variable cost is ​$237,500. For the 12,501st unit of​ production, total variable cost increases to 237,522.50. The average variable cost per unit is _____ and the marginal cost for the 12,501st unit is ______

1. 19 2. 22.5

For a​ firm, diseconomies of scale occur when the ________ for the firm __________ as the quantity produced increases.

1. ATC 2. rises

Pizza production is mostly​ standardized, so Pizza Hut ________ take advantage of specialization and the division of​ labor, while sandwich production is more customized so Subway __________ take advantage of specialization and the division of labor.

1. can 2. cannot

If firms in a perfectly competitive market are earning profits or incurring losses in the short​ run, then in the long run these profits or losses will either cause new firms to enter or existing firms to leave the market. This will result in a shift in the ________ until profits are __________.

1. industry supply curve 2. zero

The amount of money the firm brings in from the sale of its outputs is called _________, while the change in total revenue associated with producing one more unit of output is called _________.

1. revenue 2. marginal revenue

Which of the following is not one of the three conditions that characterizes a perfectly competitive​ market?

Firms have pricing power and can set their prices freely.

Given the shape of the​ curves, we know that curve A represents​ __________, curve B represents​ __________, and curve C represents​ _________.

MC; ATC; AVC

production

The process of transforming inputs into output.

Specialization

The result of workers developing a certain skill set in order to increase total productivity.

Which of the following equations calculates the profits of a​ firm?

Total revenues - Total costs

The​ long-run average total cost curve is​ __________ and is found by using the​ ___________.

U-shaped; minimum point across all possible ATC curves for a given quantity.

When comparing the accounting profit with economic​ profit, it must be true that the accounting profit is _______ economic profit

greater than or equal to

Given the​ long-run adjustment process that takes place after a supply or demand​ shock, we know that the industry supply curve must be​ __________.

horizontal, since the supply curve shifts until price is back to its original level and profits are back to zero.

The more inelastic a supply curve is the ________ responsive the quantity supplied is to changes in the price level.

less

All of the following are factors in a​ firm's elasticity of supply​ except:

market price

The more elastic a supply curve is the _________ responsive the quantity supplied is to changes in the price level.

more

Which of the following equations measures price elasticity of​ supply?

percent change in quantity supplied/percent change in price

Using your​ graph, demand for this perfectly competitive firm is

perfectly elastic

The goal of a business in a perfectly competitive market is to​ maximize:

profits

Based on the graph to the​ right, the​ long-run supply curve is​ __________.

segment​ BC, since at prices below B the firm would shut down in the long run.

If the firm were facing MR 3​, then we know that this firm should​ __________.

shut​ down, since it is incurring a loss that is greater than the fixed costs that must be paid if it shuts down.

If the graph on the right represents the market supply and demand curves for​ pizza, what do we know about the demand curve for an individual pizza shop if the pizza market is in perfect​ competition?

the​ shop's demand curve is horizontal at exactly​ $8.


संबंधित स्टडी सेट्स

Chapter 7 Choosing a Source of Credit

View Set

Simple and Multiple Linear Regression

View Set

CH. 31 BIO II STUDY GUIDE (Ecdysozoa)

View Set

PrepU Chapter 10: Documentation and Communication in the Healthcare Team

View Set

4490 7 - Business Strategy: Innovation and Entrepreneurship

View Set