Chapter 9 HW

quantity / TR / TC 0 / $0 / $25 1 / $10 / $34 2 / $20 / $41 3 / $30 / $46 4 / $40 / $49 5 / $50 / $51 6 / $60 / $54 7 / $70 / $60 8 / $80 / $70 9 / $90 / $95 10 / $100 / $145 What is the total profit of cleaning five driveways if the price Mr. Plow can charge is $10 per driveway?

$-1

Yesi should make an additional custom knit hat because another hat would cost her $10 in yarn and other supplies, and she could make $20 of revenue from it. Pretend that the cost of yarn has gone up, but Yesi can still charge only $20 in revenue for each hat. What is the maximum cost that yarn and materials could rise to, keeping Yesi's decision to produce as the correct choice?

$20

At a market price of $9 your artisanal pencil business maximizes profits by producing 828 pencils per day. When you produce this quantity of pencils per day, your average cost per unit is $5. What is your daily profit?

$3,312

At a market price of $9 your artisanal pencil business maximizes profits by producing 828 pencils per day. When you produce this quantity of pencils per day, your average cost per unit is $5. What is your total cost per day?

$4,140

At a market price of $9 your artisanal pencil business maximizes profits by producing 828 pencils per day. When you produce this quantity of pencils per day, your average cost per unit is $5. What is your total revenue per day? $____

$7,452

In the short run, profits when a competitive firm shuts down are -$8350, and they are -$200 when the firm continues to produce. What are the firm's fixed costs?

$8350

Suppose that Joey's Hot Dog Stand opens up outside of a baseball stadium. Given that many other small competitors sell hot dogs, this is a perfectly competitive market. What can we say about Joey's Hot Dog Stand? A. Because this is a perfectly competitive market, Joey's Hot Dog Stand has no control over the price. B. Joey's Hot Dog Stand faces a horizontal demand curve. C. Joey's Hot Dog Stand is a price taker. D. Joey's Hot Dog Stand should expect to earn zero profits in the long run.

A, B, C, D

Your instructor asks you to find an example of a competitive market nearby. Your friend suggests that you visit the food court at a nearby mall. Suppose the food court at your local mall has around a dozen different restaurants. Thinking about the food offered at these restaurants, which characteristics of competitive markets does the food court exhibit? many sellers

Exhibit

In the short run, profits when a competitive firm shuts down are -$8350, and they are -$200 when the firm continues to produce. This firm will minimize losses in the short run by _____

continuing to produce

Your instructor asks you to find an example of a competitive market nearby. Your friend suggests that you visit the food court at a nearby mall. Suppose the food court at your local mall has around a dozen different restaurants. Thinking about the food offered at these restaurants, which characteristics of competitive markets does the food court exhibit? free entry and exit

does not exhibit

Your instructor asks you to find an example of a competitive market nearby. Your friend suggests that you visit the food court at a nearby mall. Suppose the food court at your local mall has around a dozen different restaurants. Thinking about the food offered at these restaurants, which characteristics of competitive markets does the food court exhibit? price taking

does not exhibit

Your instructor asks you to find an example of a competitive market nearby. Your friend suggests that you visit the food court at a nearby mall. Suppose the food court at your local mall has around a dozen different restaurants. Thinking about the food offered at these restaurants, which characteristics of competitive markets does the food court exhibit? similar products

does not exhibit

Your instructor asks you to find an example of a competitive market nearby. Your friend suggests that you visit the food court at a nearby mall. Suppose the food court at your local mall has around a dozen different restaurants. Thinking about the food offered at these restaurants, which characteristics of competitive markets does the food court exhibit? every firm is small

exhibits

Firms producing an identical product in a competitive market are producing at an output level that maximizes profit. The current market price is $4.50 per unit, and the firms are producing at a long-run average cost of $5.00 per unit. Over the long run, one should expect

exit of firms from this market

If prices are below the average total cost of production in the long run firms will ___ the market, driving the market price ____ until the remaining firms earn _____

exit, up, zero economic profit

A firm is experiencing a loss of $5,000 per year. The firm has fixed costs of $8,000 per year. The firm should _____ in the short run.

operate

Claire's dog-walking service is a profit-maximizing, competitive firm. Claire walks dogs for $7.50 each. Her total cost each day is $45—she spends $35 a day on gas driving to different neighborhoods, and her liability insurance and other fixed costs average out to $10 per day.If Claire walks five dogs a day, she should ____ in the short run.

operate

The firms's long-run supply curve begins where

price is above the ATC curve

The firm's short-run supply curve begins where?

price is above the AVC curve

Which of the following most closely fits the definition of an almost perfectly competitive market? Assume there is no government intervention in these markets.

rice farmers

A firm is experiencing a loss of $5,000 per year. The firm has fixed costs of $8,000 per year. The firm should _____ in the long run.

shut down

# of roll / total cost ($) 1 / $8 2 / $10 3 / $13 4 / $18 5 / $25 6 / $34 7 / $45 Suppose that the price is $6. Assuming profit maximization, how many egg rolls will Katy sell?

4

Suppose you are the owner of a firm producing jelly beans. Your production costs are shown in the table. Boxes / Average cost per box 100 / $0.95 101 / $0.96 102 / $0.97 103 / $0.98 Initially, you produce 100 boxes of jelly beans per time period. Then a new customer calls and places an additional order for jelly beans, requiring you to increase your output to 101 boxes. She offers you $1.75 for the additional box. Should you produce it?

No, because $1.75 is less than the marginal cost.

Your friend Marianela owns a doughnut shop in town, which is a competitive market in your community. Marianela knows you're taking an economics course, so Marianela asks you what quantity of doughnuts to produce in order to maximize profit. Which is the best response to Marianela's question?

Produce the quantity where the marginal cost of producing the last unit equals the marginal revenue of producing that unit.

Suppose two cities are considering tearing down their stadiums to build new ones. In one city, the old stadium cost $5 million to build, while in the other city, the old stadium cost $50 million to build. If all else is equal, what can we say about how the costs of the old stadiums should affect the cities' decisions?

The cost to build the old stadium shouldn't be considered.

Consider a competitive market for a consumer product. Suppose this product gains a sudden popularity among consumers. How will this sudden popularity affect the profit of an individual firm in this market in the long run?

The profit of an individual firm stays at zero in the long run.