Question 1

At the point where marginal cost equals average total cost, average total cost will be

Accepted Answer

A)  at its maximum. 
B)  decreasing. 
C)  increasing. 
D)  at its minimum. 
A)  at its maximum. 
B)  decreasing. 
C)  increasing. 
D)  at its minimum.

Question 2

Marginal cost is equal to average variable cost when average variable cost is

Accepted Answer

A)  zero. 
B)  at its minimum. 
C)  at its maximum. 
D)  equal to total variable cost. 
A)  zero. 
B)  at its minimum. 
C)  at its maximum. 
D)  equal to total variable cost.

Question 3

If a perfectly competitive firm is currently producing where ________, then the firm will earn zero profits.

Accepted Answer

A)  P > MC and MC = ATC 
B)  P = MC and MC = ATC 
C)  P = MC and MC  ATC 
A)  P > MC and MC = ATC 
B)  P = MC and MC = ATC 
C)  P = MC and MC  ATC

Question 4

Related to the Economics in Practice on page 172: When there are a few unsold seats in an arena for a rock concert, the marginal cost of filling those seats

Accepted Answer

A)  is probably close to zero. 
B)  will be negative. 
C)  is generally quite high. 
D)  will primarily depend on the number of people waiting to get the seats. 
A)  is probably close to zero. 
B)  will be negative. 
C)  is generally quite high. 
D)  will primarily depend on the number of people waiting to get the seats.

Question 5

Refer to the short-run information provided in Figure 8.5 below to answer the question(s) that follow.   Figure 8.5
-Refer to Figure 8.5. If four drones are produced, average variable costs are

Accepted Answer

A)  $5. 
B)  $10. 
C)  $17.50. 
D)  $25. 
A)  $5. 
B)  $10. 
C)  $17.50. 
D)  $25.

Question 6

Average total cost and average variable cost are minimized at the same level of output.

Accepted Answer

A) True 
 B)False

Question 7

For a firm in a perfectly competitive industry, price equals marginal revenue.

Accepted Answer

A) True 
 B)False

Exam 8: Short-Run Costs and Output Decisions

At the point where marginal cost equals average total cost, average total cost will be

Marginal cost is equal to average variable cost when average variable cost is

If a perfectly competitive firm is currently producing where ________, then the firm will earn zero profits.

Related to the Economics in Practice on page 172: When there are a few unsold seats in an arena for a rock concert, the marginal cost of filling those seats

Refer to the short-run information provided in Figure 8.5 below to answer the question(s) that follow. Figure 8.5 -Refer to Figure 8.5. If four drones are produced, average variable costs are

Average total cost and average variable cost are minimized at the same level of output.

For a firm in a perfectly competitive industry, price equals marginal revenue.

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Elasticity

Household Behavior and Consumer Choice

The Production Process: the Behavior of Profit-Maximizing Firms

Long-Run Costs and Output Decisions

Input Demand: The Labor and Land Markets

Input Demand: The Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Common Resources

Uncertainty and Asymmetric Information

Income Distribution and Poverty

Public Finance: The Economics of Taxation

Introduction to Macroeconomics

Measuring National Output and National Income

Unemployment, Inflation, and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

Money, the Federal Reserve, and the Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Cost Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, Stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade, Comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing Economies

Critical Thinking About Research

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