Question 1

A firm's shut-down point is the minimum value of:

Accepted Answer

A) total cost. 
B) average variable cost. 
C) average total cost. 
D) marginal cost. 
A) total cost. 
B) average variable cost. 
C) average total cost. 
D) marginal cost.

Question 2

Use the following to answer questions 55-57:  
-(Exhibit: Total Revenue and Cost)Total cost at the most profitable level of output is given by point:

Accepted Answer

A) G. 
B) H. 
C) I. 
D) J. 
A) G. 
B) H. 
C) I. 
D) J.

Question 3

Use the following to answer questions 23-28:  
-(Exhibit: The Market for Carrots)If this is a perfectly competitive market, which of the following is true?

Accepted Answer

A) The supply curve is linear and is determined by average total cost. 
B) The equilibrium price and output are determined by demand and supply. 
C) Each firm in this market is a price setter. 
D) The price is too high. 
A) The supply curve is linear and is determined by average total cost. 
B) The equilibrium price and output are determined by demand and supply. 
C) Each firm in this market is a price setter. 
D) The price is too high.

Question 4

In perfect competition, _______ profits in long-run equilibrium will be _______.

Accepted Answer

A) implicit and explicit; equal to zero 
B) accounting; negative 
C) economic; zero 
D) economic; positive 
A) implicit and explicit; equal to zero 
B) accounting; negative 
C) economic; zero 
D) economic; positive

Question 5

If a perfectly competitive firm increases production from 10 units to 11 units, and the market price is $20 per unit, total revenue for 10 units is:

Accepted Answer

A) $10. 
B) $20. 
C) $200. 
D) $210. 
A) $10. 
B) $20. 
C) $200. 
D) $210.

Question 6

Which of the following is true regarding a long-run industry supply curve that is upward sloping?

Accepted Answer

A) Average costs of production are unchanged when industry output increases. 
B) Average costs of production increase when industry output is increased. 
C) Average cost of production decrease when industry output is increased. 
D) All of the above could be true depending on the market situation. 
A) Average costs of production are unchanged when industry output increases. 
B) Average costs of production increase when industry output is increased. 
C) Average cost of production decrease when industry output is increased. 
D) All of the above could be true depending on the market situation.

Question 7

Suppose that pasta is produced under conditions of perfect competition and that the constant-cost industry is initially in long-run equilibrium.Now suppose there is an increase in the price of wheat, which is a key ingredient in producing pasta.Further assume that the price elasticity of demand for pasta is -1.8.In the short run, we would expect to see:

Accepted Answer

A) most firms in the industry earning positive economic profits. 
B) most firms in the industry earning zero economic profits. 
C) most firms in the industry earning negative economic profits. 
D) not enough information is given to answer the question. 
A) most firms in the industry earning positive economic profits. 
B) most firms in the industry earning zero economic profits. 
C) most firms in the industry earning negative economic profits. 
D) not enough information is given to answer the question.

A firm's shut-down point is the minimum value of:

Use the following to answer questions 55-57: -(Exhibit: Total Revenue and Cost)Total cost at the most profitable level of output is given by point:

Use the following to answer questions 23-28: -(Exhibit: The Market for Carrots)If this is a perfectly competitive market, which of the following is true?

In perfect competition, _ profits in long-run equilibrium will be _.

If a perfectly competitive firm increases production from 10 units to 11 units, and the market price is $20 per unit, total revenue for 10 units is:

Which of the following is true regarding a long-run industry supply curve that is upward sloping?

Economics: the Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Demand and Supply

Macroeconomics: the Big Picture

Measuring Total Output and Income

Aggregate Demand and Aggregate Supply

Economic Growth

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Inflation and Unemployment

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Macroeconomics: the Big Picture

Measuring Total Income and Output

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Consumption and the Aggregate Expenditures Model

Investment and Economic Activity

Net Exports and International Finance

Macro Inflation and Unemployment

Macro a Brief History of Macroeconomic Thought and Policy

Economic Development

Socialist Economies in Transition

Filters

Exam 9: The Nature and Creation of Money

A firm's shut-down point is the minimum value of:

Use the following to answer questions 55-57: -(Exhibit: Total Revenue and Cost)Total cost at the most profitable level of output is given by point:

Use the following to answer questions 23-28: -(Exhibit: The Market for Carrots)If this is a perfectly competitive market, which of the following is true?

In perfect competition, _______ profits in long-run equilibrium will be _______.

If a perfectly competitive firm increases production from 10 units to 11 units, and the market price is $20 per unit, total revenue for 10 units is:

Which of the following is true regarding a long-run industry supply curve that is upward sloping?

Economics: the Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Demand and Supply

Macroeconomics: the Big Picture

Measuring Total Output and Income

Aggregate Demand and Aggregate Supply

Economic Growth

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Inflation and Unemployment

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Macroeconomics: the Big Picture

Measuring Total Income and Output

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Government and Fiscal Policy

Consumption and the Aggregate Expenditures Model

Investment and Economic Activity

Net Exports and International Finance

Macro Inflation and Unemployment

Macro a Brief History of Macroeconomic Thought and Policy

Economic Development

Socialist Economies in Transition

Filters

In perfect competition, _ profits in long-run equilibrium will be _.