Question 1(5 points)
Competitive markets are characterized by
Question 1 options:
| | a) | a small number of buyers and sellers. | |
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| | c) | the interdependence of firms | |
| | d) | gratis entry and go out by firms. | |
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Question two(five points)
Suppose that a firm in a competitive market is currently maximizing its short-run turn a profit at an output of 50 units. If the current price is $9, the marginal cost of the 50th unit is $9, and the average total price of producing fifty units is $4, what is the firm'south profit?
Question two options:
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Question 3(five points)
The accountants hired by the Brookside Racquet Club take determined full fixed toll to be $75,000, total variable cost to be $130,000, and total acquirement to be $145,000. Because of this data, in the short run, the Brookside Racquet Club should
Question three options:
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| | c) | stay open up because shutting down would be more expensive. | |
| | d) | stay open up considering the firm is making an economic profit. | |
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Question 4(five points)
Table xiv-9 Suppose that a firm in a competitive market faces the following revenues and costs:
| Quantity | Total Acquirement | Total Cost |
| 0 | $0 | $10 |
| 1 | $9 | $14 |
| ii | $18 | $19 |
| 3 | $27 | $25 |
| 4 | $36 | $32 |
| 5 | $45 | $forty |
| six | $54 | $49 |
| seven | $63 | $59 |
| 8 | $72 | $70 |
| nine | $81 | $82 |
Refer to Table 14-ix. If the firm'due south marginal cost is $xi, it should
Question iv options:
| | a) | increase production to maximize turn a profit. | |
| | b) | increase the price of the product to maximize turn a profit. | |
| | c) | advertise to attract additional buyers to maximize profit. | |
| | d) | reduce production to increment turn a profit. | |
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Question 5(5 points)
If a competitive firm is currently producing a level of output at which marginal acquirement exceeds marginal cost, and so
Question 5 options:
| | a) | a ane-unit increment in output will increase the firm's profit. | |
| | b) | a ane-unit decrease in output will increase the house'south turn a profit. | |
| | c) | total revenue exceeds total cost. | |
| | d) | total revenue exceeds total cost. | |
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Question half-dozen(v points)
For a firm in a competitive market, an increase in the quantity produced by the business firm will result in
Question 6 options:
| | a) | a decrease in the product'southward marketplace price. | |
| | b) | an increase in the product's market place price. | |
| | c) | no change in the product's market price. | |
| | d) | either an increase or no change in the product's market cost depending on the number of firms in the market place. | |
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Question seven(5 points)
Which of the following industries is about likely to showroom the characteristic of free entry?
Question 7 options:
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| | b) | municipal water and sewer | |
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Question viii(5 points)
Competitive firms that earn a loss in the short run should
Question 8 options:
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| | d) | All of the in a higher place are correct. | |
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Question ix(v points)
Which of the following statements best expresses a firm's profit-maximizing conclusion rule?
Question ix options:
| | a) | If marginal acquirement is greater than marginal price, the firm should increase its output. | |
| | b) | If marginal acquirement is less than marginal cost, the firm should decrease its output. | |
| | c) | If marginal acquirement equals marginal price, the firm should continue producing its current level of output. | |
| | d) | All of the above are correct. | |
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Question x(five points)
Table 14-three
| Quantity | Total Acquirement |
| 0 | $0 |
| 1 | $7 |
| 2 | $fourteen |
| 3 | $21 |
| 4 | $28 |
Refer to Table fourteen-3. For a firm operating in a competitive market, the marginal acquirement is
Question ten options:
Salve
Question 11(5 points)
Comparing marginal acquirement to marginal toll
(i) reveals the contribution of the last unit of measurement of production to total profit. (two) is helpful in making profit-maximizing product decisions. (iii) tells a firm whether its fixed costs are besides high.
Question xi options:
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Question 12(5 points)
Suppose a firm in a competitive market produces and sells 150 units of output and earns $1,800 in full revenue from the sales. If the firm increases its output to 200 units, the boilerplate acquirement of the 200th unit will be
Question 12 options:
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| | d) | Any of the above may be correct depending on the cost elasticity of need for the product. | |
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Question 13(five points)
Which of the following statements all-time reflects a price-taking house?
Question thirteen options:
| | a) | If the firm were to charge more than the going cost, information technology would sell none of its goods. | |
| | b) | The house has an incentive to accuse less than the market toll to earn higher revenue. | |
| | c) | The house can sell just a limited corporeality of output at the market price before the market price will fall. | |
| | d) | Cost-taking firms maximize profits by charging a price above marginal cost. | |
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Question fourteen(5 points)
Effigy 14-3
Suppose a business firm operating in a competitive market has the following toll curves:
Refer to Figure 14-three . If the market price is $x, what is the firm's full revenue?
Question 14 options:
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Question 15(5 points)
Consider a house operating in a competitive market. The firm is producing 40 units of output, has an average total cost of production equal to $v, and is earning $240 economical profit in the short run. What is the electric current market cost?
Question 15 options:
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Question 16(5 points)
Cold Duck Airlines flies betwixt Tacoma and Portland. The company leases planes on a year-long contract at a cost that averages $600 per flight. Other costs (fuel, flying attendants, etc.) amount to $550 per flying. Currently, Cold Duck's revenues are $i,000 per flying. All prices and costs are expected to keep at their nowadays levels. If it wants to maximize profit, Cold Duck Airlines should
Question 16 options:
| | a) | drop the flight immediately. | |
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| | c) | continue flying until the charter expires and so drop the run. | |
| | d) | driblet the flight now but renew the charter if conditions improve. | |
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Question 17(5 points)
Which of the following firms is the closest to being a perfectly competitive firm?
Question 17 options:
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| | c) | DeBeers diamond wholesalers | |
| | d) | a wheat farmer in Kansas | |
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Question eighteen(5 points)
Mrs. Smith operates a business in a competitive market. The current market price is $eight.l. At her profit-maximizing level of production, the average variable price is $viii.00, and the average full toll is $8.25. Mrs. Smith should
Question 18 options:
| | a) | shut down her business in the short run merely continue to operate in the long run. | |
| | b) | go along to operate in the short run simply shut down in the long run. | |
| | c) | keep to operate in both the short run and long run. | |
| | d) | shut down in both the curt run and long run. | |
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Question 19(5 points)
Figure 14-2
Suppose a firm operating in a competitive marketplace has the following price curves:
Refer to Figure fourteen-ii . Which of the four prices corresponds to a house earning positive economic profits in the short run?
Question 19 options:
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Question 20(5 points)
Table fourteen-x Suppose that a firm in a competitive market faces the following revenues and costs:
| Quantity | Total Revenue | Total Cost |
| 0 | $0 | $iii |
| ane | $seven | $v |
| 2 | $14 | $ix |
| 3 | $21 | $xv |
| 4 | $28 | $23 |
| 5 | $35 | $33 |
| 6 | $42 | $45 |
| 7 | $49 | $59 |
Refer to Table 14-10. Which level of production in the tabular array has the lowest average variable cost?
Question 20 options:
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Question 21(5 points)
Whenever a perfectly competitive firm chooses to change its level of output, its marginal acquirement
Question 21 options:
| | a) | increases if MR < ATC and decreases if MR > ATC. | |
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Question 22(5 points)
Figure 14-1 Suppose that a firm in a competitive market has the following cost curves:
Refer to Figure 14-i. If the market toll is $six.30, the business firm volition earn
Question 22 options:
| | a) | positive economic profits in the short run. | |
| | b) | negative economical profits in the short run but remain in business. | |
| | c) | negative economic profits and shut down. | |
| | d) | null economic profits in the brusk run. | |
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Question 23(5 points)
Profit-maximizing firms enter a competitive market when existing firms in that marketplace have
Question 23 options:
| | a) | total revenues that exceed stock-still costs. | |
| | b) | total revenues that exceed total variable costs. | |
| | c) | average total costs that exceed average revenue. | |
| | d) | boilerplate full costs less than market toll. | |
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Question 24(5 points)
Figure 14-1 Suppose that a business firm in a competitive market place has the following price curves:
Refer to Figure xiv-1. If the market place price falls below $iv.50, the house volition earn
Question 24 options:
| | a) | positive economical profits in the short run. | |
| | b) | negative economic profits in the brusk run merely remain in business. | |
| | c) | negative economic profits in the short run and shut down. | |
| | d) | zero economic profits in the brusque run. | |
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Question 25(five points)
Suppose a house in each of the two markets listed beneath were to increase its toll by 30 pct. In which pair would the business firm in the offset market listed experience a dramatic refuse in sales, simply the firm in the 2nd mar-ket listed would not?
Question 25 options:
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| | c) | restaurants and MP3 players | |
| | d) | moving picture theaters and ballpoint pens | |
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Question 26(five points)
If a firm in a perfectly competitive market triples the quantity of output sold, so total revenue volition
Question 26 options:
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| | d) | Any of the above may be true depending on the house'south labor productivity. | |
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Question 27(5 points)
When firms are said to exist cost takers, it implies that if a firm raises its toll,
Question 27 options:
| | a) | buyers will go elsewhere. | |
| | b) | buyers volition pay the higher toll in the short run. | |
| | c) | competitors will as well raise their prices. | |
| | d) | firms in the industry will exercise market power. | |
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Question 28(five points)
Figure 14-1 Suppose that a business firm in a competitive market has the following cost curves:
Refer to Figure 14-1. The firm's short-run supply curve is its marginal toll curve above
Question 28 options:
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Question 29(5 points)
Effigy 14-ane Suppose that a business firm in a competitive market has the following price curves:
Refer to Figure 14-1. The firm should shut down if the market price is
Question 29 options:
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| | b) | above $6.30 merely less than $8. | |
| | c) | above $four.50 simply less than $half-dozen.30. | |
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Question 30(5 points)
When a profit-maximizing house is earning profits, those profits can be identified by
Question 30 options:
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Question 31(five points)
Table 14-9 Suppose that a business firm in a competitive market faces the post-obit revenues and costs:
| Quantity | Full Revenue | Full Price |
| 0 | $0 | $ten |
| 1 | $ix | $14 |
| ii | $18 | $19 |
| three | $27 | $25 |
| 4 | $36 | $32 |
| v | $45 | $40 |
| 6 | $54 | $49 |
| 7 | $63 | $59 |
| 8 | $72 | $70 |
| 9 | $81 | $82 |
Refer to Table fourteen-ix. In lodge to maximize profit, the firm will produce a level of output where marginal reve-nue is equal to
Question 31 options:
Relieve
Question 32(5 points)
Table xiv-4
| Quantity | Full Revenue |
| 0 | $0 |
| 1 | $15 |
| 2 | $thirty |
| three | $45 |
| 4 | $lx |
Refer to Table 14-4. For a firm operating in a competitive market, the boilerplate acquirement is
Question 32 options:
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Question 33(five points)
Figure 14-2 Suppose a firm operating in a competitive market has the following price curves:
Refer to Figure fourteen-ii. Which of the 4 prices corresponds to a firm earning negative economic profits in the short run but trying to remain open?
Question 33 options:
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Question 34(5 points)
Figure 14-one Suppose that a business firm in a competitive market has the following toll curves:
Refer to Effigy 14-1. If the market cost rises in a higher place $vi.30, the firm will earn
Question 34 options:
| | a) | positive economic profits in the brusk run. | |
| | b) | negative economical profits in the short run simply remain in business organization. | |
| | c) | negative economic profits and shut down. | |
| | d) | zilch economic profits in the brusque run. | |
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Question 35(5 points)
Suppose yous value a special spotter at $100. Y'all purchase it for $75. On your way home from class i solar day, you lose the watch. The store is yet selling the aforementioned watch, just the price has risen to $85. Presume that losing the lookout has not contradistinct how yous value it. What should you lot do?
Question 35 options:
| | a) | Pay the $85 to purchase the spotter. | |
| | b) | Wait to run across if the watch goes on sale. If the price drops to $75 or less, purchase the watch. | |
| | c) | Wait to come across if the watch goes on auction. If the price drops to $25 or less, purchase the picket. | |
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Question 36(5 points)
Scenario 14-3 Suppose a certain competitive business firm is producing Q=500 units of output. The marginal cost of the 500th unit of measurement is $17, and the average total cost of producing 500 units is $12. The business firm sells its output for $20.
Refer to Scenario 14-3. At Q=499, the firm's total costs equal
Question 36 options:
Relieve
Question 37(5 points)
Table 14-xiii Diana's Dress Emporium
| COSTS | REVENUES |
Quantity
Produced | Total
Toll | Marginal
Toll | Quantity
Demanded | Price | Full
Revenue | Marginal
Revenue |
| 0 | $100 | — | 0 | $120 | | — |
| 1 | $150 | | i | $120 | | |
| 2 | $202 | | 2 | $120 | | |
| 3 | $257 | | 3 | $120 | | |
| four | $317 | | 4 | $120 | | |
| 5 | $385 | | 5 | $120 | | |
| 6 | $465 | | half-dozen | $120 | | |
| 7 | $562 | | 7 | $120 | | |
| eight | $682 | | 8 | $120 | | |
Refer to Table 14-13. What is the marginal cost of the 1st unit?
Question 37 options:
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Question 38(5 points)
When a eating house stays open up for lunch service fifty-fifty though few customers patronize the restaurant for lunch, which of the post-obit principles is (are) best demonstrated? (i) Fixed costs are sunk in the brusk run. (2) In the short run, just fixed costs are important to the conclusion to stay open for lunch. (iii) If revenue exceeds variable cost, the restaurant owner is making a smart decision to remain open for tiffin.
Question 38 options:
Relieve
Question 39(5 points)
Tabular array fourteen-11 Suppose that a firm in a competitive market faces the following prices and costs:
| Price | Quantity | Total
Cost |
| $5 | 0 | $iii |
| $v | one | $5 |
| $v | 2 | $8 |
| $5 | 3 | $12 |
| $five | four | $17 |
| $5 | 5 | $23 |
Refer to Table 14-xi. The marginal revenue from producing the 3rd unit equals (i) $5. (ii) the price. (iii) the marginal toll.
Question 39 options:
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Question forty(v points)
In a competitive market, no single producer tin can influence the market cost because
Question 40 options:
| | a) | many other sellers are offer a product that is essentially identical. | |
| | b) | consumers have more than influence over the market toll than producers do. | |
| | c) | regime intervention prevents firms from influencing price. | |
| | d) | producers concord not to modify the price. | |
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Question 41(5 points)
The firm will brand the almost profits if it produces the quantity of output at which
Question 41 options:
| | a) | marginal toll equals average toll. | |
| | b) | turn a profit per unit is greatest. | |
| | c) | marginal revenue equals total revenue. | |
| | d) | marginal revenue equals marginal cost | |
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Question 42(5 points)
Table 14-9 Suppose that a house in a competitive market place faces the following revenues and costs:
| Quantity | Full Acquirement | Full Price |
| 0 | $0 | $10 |
| 1 | $9 | $14 |
| ii | $xviii | $19 |
| 3 | $27 | $25 |
| four | $36 | $32 |
| five | $45 | $xl |
| half-dozen | $54 | $49 |
| seven | $63 | $59 |
| 8 | $72 | $70 |
| nine | $81 | $82 |
Refer to Table 14-ix At which quantity of output is marginal revenue equal to marginal toll?
Question 42 options:
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Question 43(5 points)
A firm that has little power to influence market prices operates in a
Question 43 options:
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Question 44(five points)
Table xiv-10 Suppose that a house in a competitive market faces the following revenues and costs:
| Quantity | Total Acquirement | Total Cost |
| 0 | $0 | $three |
| one | $vii | $5 |
| 2 | $xiv | $9 |
| three | $21 | $15 |
| 4 | $28 | $23 |
| v | $35 | $33 |
| 6 | $42 | $45 |
| 7 | $49 | $59 |
Refer to Table xiv-10. If the firm produces the profit-maximizing level of product, how much profit volition the firm earn?
Question 44 options:
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Question 45(5 points)
In the long run, a firm volition go out a competitive industry if
Question 45 options:
| | a) | total revenue exceeds total cost. | |
| | b) | the price exceeds average total toll. | |
| | c) | boilerplate total cost exceeds the price. | |
| | d) | Both a and b are correct. | |
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