Question 1

When marginal cost is positive, total cost must be rising.

Accepted Answer

A) True 
 B)False

Question 2

The total cost curve

Accepted Answer

A) has a positive slope throughout. 
B) has a negative slope throughout. 
C) is vertical. 
D) is horizontal. 
E) can have a positive or negative slope throughout. 
A) has a positive slope throughout. 
B) has a negative slope throughout. 
C) is vertical. 
D) is horizontal. 
E) can have a positive or negative slope throughout.

Question 3

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 4

The table below shows the cost schedule for Walworth Baker.

Accepted Answer

The answer of The table below shows the cost schedule...

Question 5

Profit maximization is the assumption for all types of corporations, but not for sole proprietorships.

Accepted Answer

A) True 
 B)False

Question 6

A market that includes only a single firm is called a(n)

Accepted Answer

A) monopsony. 
B) monopoly. 
C) single-firm market. 
D) competitive market. 
E) oligopoly. 
A) monopsony. 
B) monopoly. 
C) single-firm market. 
D) competitive market. 
E) oligopoly.

Question 7

In a competitive market, no single consumer or producer can set the market price.

Accepted Answer

A) True 
 B)False

Question 8

The difference between producer surplus and profits for a single firm is fixed costs.

Accepted Answer

A) True 
 B)False

Question 9

Marginal cost increases with output because

Accepted Answer

A) capital becomes increasingly difficult to work with as more units of labor utilize it. 
B) marginal product increases with output. 
C) increasing amounts of input must be used to produce one more unit of output. 
D) total costs increase with output. 
E) more input must be used to produce more output. 
A) capital becomes increasingly difficult to work with as more units of labor utilize it. 
B) marginal product increases with output. 
C) increasing amounts of input must be used to produce one more unit of output. 
D) total costs increase with output. 
E) more input must be used to produce more output.

Question 10

Explain, in words, the relationship between marginal product and marginal cost.

Accepted Answer

Marginal product is the change in output

Question 11

In 2016, a firm produced 100 units of good X at $1. In 2017, the firm produced 200 units of good X at $0.5. Between 2016 and 2017, the total revenue of producing good X

Accepted Answer

A) stayed constant 
B) increased. 
C) might increase, decrease, or stay constant. 
D) decreased. 
E) was equal to zero. 
A) stayed constant 
B) increased. 
C) might increase, decrease, or stay constant. 
D) decreased. 
E) was equal to zero.

Question 12

A competitive firm's supply curve is

Accepted Answer

A) output price. 
B) its marginal cost curve. 
C) its total revenue curve. 
D) its total cost curve. 
E) its marginal revenue curve. 
A) output price. 
B) its marginal cost curve. 
C) its total revenue curve. 
D) its total cost curve. 
E) its marginal revenue curve.

Question 13

Diminishing returns occur when the

Accepted Answer

A) marginal product of an input is positive. 
B) marginal product of an input is zero. 
C) marginal product of an input is decreasing. 
D) total product of an input is zero. 
E) total product of an input is negative. 
A) marginal product of an input is positive. 
B) marginal product of an input is zero. 
C) marginal product of an input is decreasing. 
D) total product of an input is zero. 
E) total product of an input is negative.

Question 14

Suppose a price-taking firm has the following total cost schedule:

Accepted Answer

The answer of Suppose a price-taking firm has the following...

Question 15

The owner of a sole proprietorship

Accepted Answer

A) has unlimited liability and is responsible for all debts of the firm. 
B) assumes no responsibility for any debt of the firm and enjoys only limited profits. 
C) assumes no responsibility for any debt of the firm but also receives no profits 
D) has limited liability and shares the responsibility of all debts of the firm with others. 
E) has limited liability up to the total value of her or his own personal property. 
A) has unlimited liability and is responsible for all debts of the firm. 
B) assumes no responsibility for any debt of the firm and enjoys only limited profits. 
C) assumes no responsibility for any debt of the firm but also receives no profits 
D) has limited liability and shares the responsibility of all debts of the firm with others. 
E) has limited liability up to the total value of her or his own personal property.

Question 16

Variable costs are those that

Accepted Answer

A) vary with output. 
B) are fixed when output changes. 
C) decrease when output increases. 
D) vary with input. 
E) can change even when output is constant. 
A) vary with output. 
B) are fixed when output changes. 
C) decrease when output increases. 
D) vary with input. 
E) can change even when output is constant.

Question 17

Which of the following is typically a variable factor of production?

Accepted Answer

A) Land 
B) Equipment 
C) Plant 
D) Labor 
E) Money 
A) Land 
B) Equipment 
C) Plant 
D) Labor 
E) Money

Question 18

Producer surplus equals profits

Accepted Answer

A) plus the sum of marginal costs. 
B) minus the sum of marginal costs. 
C) plus total fixed costs. 
D) minus total fixed costs. 
E) minus total costs. 
A) plus the sum of marginal costs. 
B) minus the sum of marginal costs. 
C) plus total fixed costs. 
D) minus total fixed costs. 
E) minus total costs.

Question 19

When more producers enter a competitive market, the market supply curve

Accepted Answer

A) shifts to the right. 
B) shifts to the left. 
C) does not shift. 
D) always becomes steeper. 
E) always becomes flatter. 
A) shifts to the right. 
B) shifts to the left. 
C) does not shift. 
D) always becomes steeper. 
E) always becomes flatter.

Question 20

Because marginal cost increases as output increases,

Accepted Answer

A) marginal product increases at an increasing rate. 
B) the total cost curve gets steeper as output increases. 
C) the fixed cost curve gets steeper as output increases. 
D) the total product curve gets steeper as output increases. 
E) the total cost curve becomes horizontal. 
A) marginal product increases at an increasing rate. 
B) the total cost curve gets steeper as output increases. 
C) the fixed cost curve gets steeper as output increases. 
D) the total product curve gets steeper as output increases. 
E) the total cost curve becomes horizontal.

Exam 6: The Supply Curve and the Behavior of Firms

When marginal cost is positive, total cost must be rising.

The total cost curve

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

The table below shows the cost schedule for Walworth Baker.

Profit maximization is the assumption for all types of corporations, but not for sole proprietorships.

A market that includes only a single firm is called a(n)

In a competitive market, no single consumer or producer can set the market price.

The difference between producer surplus and profits for a single firm is fixed costs.

Marginal cost increases with output because

Explain, in words, the relationship between marginal product and marginal cost.

In 2016, a firm produced 100 units of good X at $1. In 2017, the firm produced 200 units of good X at $0.5. Between 2016 and 2017, the total revenue of producing good X

A competitive firm's supply curve is

Diminishing returns occur when the

Suppose a price-taking firm has the following total cost schedule:

The owner of a sole proprietorship

Variable costs are those that

Which of the following is typically a variable factor of production?

Producer surplus equals profits

When more producers enter a competitive market, the market supply curve

Because marginal cost increases as output increases,

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model

The Demand Curve and the Behavior of Consumers

The Efficiency of 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

Macroeconomics: the Big Picture

Measuring the Production, Income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Productivity and Economic Growth

Money and Inflation

The Nature and Causes of Economic Fluctuations

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Economic Growth Around the World

International Trade

International Finance

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