Unit 3 Exam
The average total cost of producing 3 units of output is?
$16
If the average variable cost of producing 4 burritos is $20 and the average variable cost of producing 5 burritos is $25, than the marginal cost of increasing output from 4 to 5 burritos is
$45
The marginal cost of producing the 4th output is?
$6
The chart shows the number of workers and the quantity of burgers produced in one hour. The marginal product of the sixth worker is?
15
The Law of Diminishing Marginal Returns first occurs with which worker?
3rd
At the point of price 0A, economic profits are
ABKH
Farmer John is a profit-maximizing firm currently experiencing short-run losses. Under which of the following conditions should Farmer John shut down production?
AR is less than AVC
In the short run, the firm will stop production when the price falls below
D
In a perfectly competitive market, the price is equal to
MRDARP (marginal revenue, demand, average revenue, price)
In the short run, a perfectly competitive firm will make an economic profit if
P>ATC
Fixed costs are
any cost which do not change when the firm changes its output
Marginal revenue is the
change in total revenue associated with the sale of one more unit of output
At the profit-maximizing output, the firm will realize
economic profit of HJEF
The short-run supply curve for a firm in a perfectly competitive industry is
its marginal cost curve above the minimum point of its average variable cost curve
If a firm's average total cost decreases as the firm increases its output, the firm's marginal cost must be
less than the average total cost
Marginal product
may initially increase, then diminish, and ultimately becomes negative
If the MR is greater than MC for a firm operating in a perfectly competitive market, then the firm should
produce more of the good to maximize profit
A constant-cost, perfectly competitive widget industry is in long-run equilibrium. A decrease in the price of gadgets, a substitute for widgets, will most likely result in
short-run losses for widget producers, followed by the exit of some firms
The vertical distance between ATC and AVC reflects
the average fixed cost at each level of output (AFC)
Marginal product is
the increase in total output attributable to the employment of one more worker