Exam 8: Short-Run Costs and Output Decisions

Refer to the information provided in Figure 8.9 below to answer the question(s) that follow. Figure 8.9 -Refer to Figure 8.9. If this farmer is producing the profit-maximizing level of output, her total revenue is

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 8.4. The vertical distance AB represents

Marginal cost is equal to ________ when ________ is minimized.

The ________ that a firm takes in when it increases output by one additional unit is marginal revenue.

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 two drones are produced, total variable costs are

Perfectly competitive firms are price setters.

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 one drone is produced, average variable costs are

In the short run, marginal cost is positive and decreasing at output levels where total variable cost is ________ at a(n) ________ rate.

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 no drones are produced, total variable costs are

A firm in a perfectly competitive industry is producing 50 units, its profit-maximizing quantity. Industry price is $2, total fixed costs are $25, and total variable costs are $40. The firm's economic profit is

If a profit-maximizing firm is currently producing output where MR = MC in the short run, it should

At an output level of zero, total cost is zero.

Diminishing marginal returns implies

At an output of zero, ________ is zero.

Refer to the information provided in Figure 8.3 below to answer the question(s) that follow. Figure 8.3 -Refer to Figure 8.3. The marginal cost of the ninth basketball is

A firm in a perfectly competitive market has ________ control over price because each firm's product perfectly substitutes for every other firm's product.

In a short-run production process, a diminishing marginal product of labor explains why marginal cost is

The marginal cost curve intersects the ________ at its minimum.

If a firm in a perfectly competitive industry raises its price above market price,

Refer to the information provided in Table 8.5 below to answer the question(s) that follow. Table 8.5 Number of Swords TVC MC AVC TFC TC AFC ATC 0 50 1 25 2 47.50 3 23.33 4 150 5 135 -Refer to Table 8.5. If Phoebe produces two swords, her marginal cost is