ACE 100 Exam 3
Refer to Table 13-7. What is the value of E?
$100
At the equilibrium price, consumer surplus is
100
Total surplus
A. Can be used to measure a market's efficiency B. Is the value to buyers minus the cost to sellers C. Is the sum of consumer and producer surplus D. all the above
Which of the following represents the firm's long run condition for exiting a market?
Exit if P<ATC
Caroline sharpens knives in her spare time for extra income. Buyers of her service are willing to pay $2.95 per knife for as many knives as Caroline is willing to sharpen. On a particular day, she is willing to sharpen the first knife for $2, the second knife for $2.25, the third knife for $2.75, and the fourth knife for $3.50. Assume Caroline is rational in deciding how many knives to sharpen. Her producer surplus is
$1.85
Refer to Table 13-7. What is the value of F?
$150
refer to figure 7-19. At the equilibrium price, producer surplus is
$150
Refer to Table 13-7. What is the value of D?
$50
refer to table 13-7. What is the value of A?
$50
Refer to table 13-7. what is the value of B?
$100
refer to table 13-7. what is the value of C?
$100
Refer to table 14-5. for this firm, the price of the product is
$11
Refer to table 14-12. What is Bill's economic profit-maximizing output level?
$115
refer to table 13-1. What is the total output when 4 workers are hired?
185
Refer to Table 13-3. At which number of workers does diminishing marginal product begin?
2
Refer to table 13-2. What is the marginal product of the second worker
200 units
Refer to figure 13-5. Which of the curves is most likely to represent average fixed cost?
A
Willingness to sell
A measures the cost a seller incurs when producing a good
Producer surplus equals the
Amount received by sellers minus the cost to sellers
Refer to figure 7-19. At the equilibrium price, total surplus is
$250
Refer to figure 7-4. When the price falls from p1 to p2, which area represents the increase in consumer surplus to existing buyers
BCGD
Which of the following statements best expresses a firm's profit maximizing decision rule?
D. All the above
If the market price is $1000, the producer surplus in the market is
$300
If the price of the product is $122, then the total consumer surplus is
$41
Jacqui decides to open her own business and earns $50,000 in accounting profit the first year. When deciding to open her own business, she turned down a job offer with an annual salary of $45,000. What is Jacqui's economic profit from running her own business?
$5000
Refer to table 14-8. In order to maximize profit, the firm will produce a level of output where marginal cost is equal to
$6
Refer to table 14-8. if the firm produces the profit maximizing level of production, how much profit will the firm earn?
$7
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?
15 bouquets
Refer to table 14-8. in order to maximize profits, the firm will produce
5 Units of output because marginal revenue equals marginal cost
In the long run,
A competitive firms' economic profits are zero
If a competitive firm is currently producing a level of output at which marginal revenue exceeds marginal cost, then
A one unit increase in output will increase the firm's profit
Refer to figure 13-8. Which of the following statements is correct?
A. Average total cost is rising for quantities higher than D because marginal cost is higher than average total cost B. Average variable cost is minimized at B because at that quantity, marginal cost equals average variable cost C. Average variable cost is declining for quantities less than B because marginal cost is lower than average variable cost. D. All the above
When the price falls from p1 to p2, which area represents the increase in consumer surplus to new buyers entering the market
ABC
Refer to figure 7-21. Which area represents producer surplus when the price is p1
C
If the price of the product is $130, then who would be willing to purchase the product?
Calvin and Sam
On a graph, the area below a demand curve and above the price measures
Consumer Surplus
When new firms have an incentive to enter a competitive market, their entry will
Drive down profits of existing firms in the market
Refer to figure 14-13. if the price is $2 in the short run, what will happen in the long run?
Individual firms will earn negative economic profits in the short run, which will cause some firms to exit the industry
Refer to figure 14-13. If the price is $6 in the short run, what will happen in the long run?
Individual firms will earn positive economic profits in the short run, which will entice other firms to enter the industry.
Refer to figure 13-2. as the number of workers increases,
Marginal product decreases
At the profit-maximizing level of output,
Marginal revenue equals marginal cost
Willingness to pay
Measures the value that a buyer places on a good
Refer to figure 14-13. If the price is $4.50 in the short run, what will happen in the long run?
Nothing. the price is consistent with zero economic profits, so there is no incentive for firms to enter or exit the industry.
Refer to figure 7-21. When the price is p1, area C represents
Producer surplus
Which of the following represents the firm's short run condition for shutting down?
Shut down if P<AVC
the competitive firm's long run supply curve is that portion of the marginal cost curve that lies above average
Total cost
A seller's opportunity cost measures the
Value of everything she must give to produce a good
Consumer surplus equals the
Value to buyers minus the amount paid by buyers
a production function describes
how a firm turns inputs into output
In the long run,
inputs that were fixed in the short run become variable
