Question 1

Exhibit 6-9  
-Refer to Exhibit 6-9. Calculate the producer surplus.

Accepted Answer

$810
Produ

Question 2

Revenue is the only factor that affects profits.

Accepted Answer

A) True 
 B)False

Question 3

Holding everything else equal, total revenue increases

Accepted Answer

A)  only when quantity increases. 
B)  only when price increases. 
C)  whenever total costs increase. 
D)  when either price or quantity increase. 
E)  only when both price and quantity increase. 
A)  only when quantity increases. 
B)  only when price increases. 
C)  whenever total costs increase. 
D)  when either price or quantity increase. 
E)  only when both price and quantity increase.

Question 4

Total costs are

Accepted Answer

A)  variable costs plus average cost. 
B)  marginal cost plus average cost. 
C)  fixed costs plus variable costs. 
D)  marginal cost minus average cost. 
E)  fixed costs minus variable costs. 
A)  variable costs plus average cost. 
B)  marginal cost plus average cost. 
C)  fixed costs plus variable costs. 
D)  marginal cost minus average cost. 
E)  fixed costs minus variable costs.

Question 5

Exhibit 6-7  
-Refer to Exhibit 6-7. If market price increases from $18 to $20, then producer surplus for the profit-maximizing firm

Accepted Answer

A)  increases by $2. 
B)  decreases by $2. 
C)  increases by $7. 
D)  decreases by $1. 
E)  does not change. 
A)  increases by $2. 
B)  decreases by $2. 
C)  increases by $7. 
D)  decreases by $1. 
E)  does not change.

Question 6

When total product is rising, marginal product

Accepted Answer

A)  must be negative. 
B)  must be zero. 
C)  must be positive. 
D)  can be either negative or positive. 
E)  must be rising as well. 
A)  must be negative. 
B)  must be zero. 
C)  must be positive. 
D)  can be either negative or positive. 
E)  must be rising as well.

Question 7

If a firm leaves an industry, all else held equal, the market supply curve shifts left.

Accepted Answer

A) True 
 B)False

Question 8

The reason the firm's supply curve slopes upward is because its

Accepted Answer

A)  total cost curve slopes upward. 
B)  market supply curve slopes upward. 
C)  total revenue curve slopes upward. 
D)  marginal cost curve slopes upward. 
E)  marginal product curve slopes upward. 
A)  total cost curve slopes upward. 
B)  market supply curve slopes upward. 
C)  total revenue curve slopes upward. 
D)  marginal cost curve slopes upward. 
E)  marginal product curve slopes upward.

Question 9

A corporation differs from other forms of businesses because it

Accepted Answer

A)  is required to own a seat on a stock exchange. 
B)  has a lower debt ratio. 
C)  has no tax liability. 
D)  is characterized by limited profits. 
E)  is owned by people who enjoy limited liability. 
A)  is required to own a seat on a stock exchange. 
B)  has a lower debt ratio. 
C)  has no tax liability. 
D)  is characterized by limited profits. 
E)  is owned by people who enjoy limited liability.

Question 10

Marginal cost is

Accepted Answer

A)  the change in total cost that results from hiring one more unit of labor. 
B)  total cost divided by total output. 
C)  the change in total variable cost that results from hiring one more unit of capital. 
D)  the change in total cost that results from hiring one more unit of capital. 
E)  the change in total cost that results from increasing output by one unit. 
A)  the change in total cost that results from hiring one more unit of labor. 
B)  total cost divided by total output. 
C)  the change in total variable cost that results from hiring one more unit of capital. 
D)  the change in total cost that results from hiring one more unit of capital. 
E)  the change in total cost that results from increasing output by one unit.

Question 11

Suppose each firm in a market with 200 identical firms has a supply curve given by the following equation: q = -3 + .25P. How much will each firm produce when price is $25? What will be the market output at that price?

Accepted Answer

3.25; 650
Firm produ

Question 12

The change in total output that occurs with a one-unit change in labor is called the

Accepted Answer

A)  average productivity of labor. 
B)  marginal product of labor. 
C)  total product of labor. 
D)  marginal benefit of labor. 
E)  marginal cost of labor. 
A)  average productivity of labor. 
B)  marginal product of labor. 
C)  total product of labor. 
D)  marginal benefit of labor. 
E)  marginal cost of labor.

Question 13

Compute the total revenue, total costs, and profits when the price of a crate of grapes is $80. How many crates of grapes will maximize profits? How does the answer compare to the price equals marginal cost condition?

Accepted Answer

In this example, profit is being maximiz

Question 14

If the marginal cost curves of all the firms in an industry are horizontally summed, one obtains

Accepted Answer

A)  market demand. 
B)  total industry cost. 
C)  nothing of value. 
D)  market supply. 
E)  total fixed costs. 
A)  market demand. 
B)  total industry cost. 
C)  nothing of value. 
D)  market supply. 
E)  total fixed costs.

Question 15

Profit is usually ____ producer surplus for a firm.

Accepted Answer

A)  less than 
B)  double 
C)  greater than 
D)  half of 
E)  the same as 
A)  less than 
B)  double 
C)  greater than 
D)  half of 
E)  the same as

Question 16

When production increases, total costs

Accepted Answer

A)  can increase or decrease in the long run. 
B)  always increase in the short run. 
C)  are constant in the long run. 
D)  can increase or decrease in the short run. 
E)  become zero. 
A)  can increase or decrease in the long run. 
B)  always increase in the short run. 
C)  are constant in the long run. 
D)  can increase or decrease in the short run. 
E)  become zero.

Question 17

For a competitive firm, which of the following is false?

Accepted Answer

A)  Marginal cost is constant as output changes. 
B)  Marginal revenue equals price. 
C)  Profit is maximized when price equals marginal cost. 
D)  Profit is maximized when marginal revenue equals marginal cost. 
E)  Producer surplus is zero. 
A)  Marginal cost is constant as output changes. 
B)  Marginal revenue equals price. 
C)  Profit is maximized when price equals marginal cost. 
D)  Profit is maximized when marginal revenue equals marginal cost. 
E)  Producer surplus is zero.

Question 18

Variable costs are generally associated with the cost of

Accepted Answer

A)  machinery. 
B)  loan payments. 
C)  capital. 
D)  labor. 
E)  rental income forgone by not renting facilities to someone else. 
A)  machinery. 
B)  loan payments. 
C)  capital. 
D)  labor. 
E)  rental income forgone by not renting facilities to someone else.

Question 19

A firm is one of the terms for a business organization.

Accepted Answer

A) True 
 B)False

Question 20

In moving down along a demand curve, total revenue

Accepted Answer

A)  stays constant. 
B)  increases. 
C)  may increase, decrease, or stay constant. 
D)  decreases. 
E)  is always equal to zero. 
A)  stays constant. 
B)  increases. 
C)  may increase, decrease, or stay constant. 
D)  decreases. 
E)  is always equal to zero.

Exhibit 6-9 -Refer to Exhibit 6-9. Calculate the producer surplus.

Revenue is the only factor that affects profits.

Holding everything else equal, total revenue increases

Total costs are

Exhibit 6-7 -Refer to Exhibit 6-7. If market price increases from $18 to $20, then producer surplus for the profit-maximizing firm

When total product is rising, marginal product

If a firm leaves an industry, all else held equal, the market supply curve shifts left.

The reason the firm's supply curve slopes upward is because its

A corporation differs from other forms of businesses because it

Marginal cost is

Suppose each firm in a market with 200 identical firms has a supply curve given by the following equation: q = -3 + .25P. How much will each firm produce when price is $25? What will be the market output at that price?

The change in total output that occurs with a one-unit change in labor is called the

Compute the total revenue, total costs, and profits when the price of a crate of grapes is $80. How many crates of grapes will maximize profits? How does the answer compare to the price equals marginal cost condition?

If the marginal cost curves of all the firms in an industry are horizontally summed, one obtains

Profit is usually ____ producer surplus for a firm.

When production increases, total costs

For a competitive firm, which of the following is false?

Variable costs are generally associated with the cost of

A firm is one of the terms for a business organization.

In moving down along a demand curve, total revenue

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model: Price Floors, Price Ceilings, and Elasticity

The Demand Curve and the Behavior of Consumers

The Interaction of People in Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, Monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Capital and Financial Markets

Reading, Understanding, and Creating Graphs

Consumer Theory With Indifference Curves

Producer Theory With Isoquants

Filters

Exam 6: The Supply Curve and the Behavior of Firms

Exhibit 6-9 -Refer to Exhibit 6-9. Calculate the producer surplus.

Revenue is the only factor that affects profits.

Holding everything else equal, total revenue increases

Total costs are

Exhibit 6-7 -Refer to Exhibit 6-7. If market price increases from $18 to $20, then producer surplus for the profit-maximizing firm

When total product is rising, marginal product

If a firm leaves an industry, all else held equal, the market supply curve shifts left.

The reason the firm's supply curve slopes upward is because its

A corporation differs from other forms of businesses because it

Marginal cost is

Suppose each firm in a market with 200 identical firms has a supply curve given by the following equation: q = -3 + .25P. How much will each firm produce when price is $25? What will be the market output at that price?

The change in total output that occurs with a one-unit change in labor is called the

Compute the total revenue, total costs, and profits when the price of a crate of grapes is $80. How many crates of grapes will maximize profits? How does the answer compare to the price equals marginal cost condition?

If the marginal cost curves of all the firms in an industry are horizontally summed, one obtains

Profit is usually ____ producer surplus for a firm.

When production increases, total costs

For a competitive firm, which of the following is false?

Variable costs are generally associated with the cost of

A firm is one of the terms for a business organization.

In moving down along a demand curve, total revenue

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model: Price Floors, Price Ceilings, and Elasticity

The Demand Curve and the Behavior of Consumers

The Interaction of People in Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, Monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Capital and Financial Markets

Reading, Understanding, and Creating Graphs

Consumer Theory With Indifference Curves

Producer Theory With Isoquants

Filters