Question 1

Firms can make decisions using marginal analysis even if they do not know the shape of a demand curve.

Accepted Answer

A) True 
 B)False

Question 2

Figure 8-3  
-A company draws its total cost curve and total revenue curve on the same graph.If the firm wishes to maximize profits, it will select the output at which the

Accepted Answer

A) vertical distance between the two curves is greatest. 
B) total cost curve cuts the total revenue curve. 
C) horizontal distance between the two curves is greatest. 
D) slope of the total revenue curve is greatest. 
A) vertical distance between the two curves is greatest. 
B) total cost curve cuts the total revenue curve. 
C) horizontal distance between the two curves is greatest. 
D) slope of the total revenue curve is greatest.

Question 3

A separate average revenue curve is not required when you have the demand curve for a firm.Explain.

Accepted Answer

Demand curve itself is the average reven

Question 4

Total profit

Accepted Answer

A) is the difference between sales revenue and costs. 
B) maximization is always the goal of every firm. 
C) is always defined the same by both economists and accountants. 
D) is maximized when sales are maximized. 
A) is the difference between sales revenue and costs. 
B) maximization is always the goal of every firm. 
C) is always defined the same by both economists and accountants. 
D) is maximized when sales are maximized.

Question 5

To find its profit-maximizing output level, a firm should operate where

Accepted Answer

A) AVC = MC. 
B) MC = MR. 
C) TFC = TVC. 
D) AFC = AVC. 
A) AVC = MC. 
B) MC = MR. 
C) TFC = TVC. 
D) AFC = AVC.

Question 6

​  
-At optimal output, the firm described in Table 8-1 earns a profit of

Accepted Answer

A) $1 per unit of output. 
B) $2 per unit of output. 
C) $1 total. 
D) $2 total. 
A) $1 per unit of output. 
B) $2 per unit of output. 
C) $1 total. 
D) $2 total.

Question 7

The typical total profit graphical presentation is shown as

Accepted Answer

A) a square. 
B) a rectangle. 
C) a hill, or mound. 
D) an S curve. 
A) a square. 
B) a rectangle. 
C) a hill, or mound. 
D) an S curve.

Question 8

Whenever marginal cost is positive, average cost curves are upward sloping.

Accepted Answer

A) True 
 B)False

Question 9

Most consumers in stores use marginal analysis to make their buying decisions.

Accepted Answer

A) True 
 B)False

Question 10

If marginal cost is rising, then average cost must be rising.

Accepted Answer

A) True 
 B)False

Question 11

Marginal cost for a firm can be derived from its demand curve.

Accepted Answer

A) True 
 B)False

Question 12

By definition, a firm that practices satisficing

Accepted Answer

A) maximizes its sales, not its profits. 
B) makes acceptable decisions, though not necessarily optimal ones. 
C) satisfies government guidelines instead of consumer demands. 
D) minimizes the cost of gathering enough information to make an optimal decision. 
A) maximizes its sales, not its profits. 
B) makes acceptable decisions, though not necessarily optimal ones. 
C) satisfies government guidelines instead of consumer demands. 
D) minimizes the cost of gathering enough information to make an optimal decision.

Exam 8: Output, Price, and Profit: the Importance of Marginal Analysis

Firms can make decisions using marginal analysis even if they do not know the shape of a demand curve.

Figure 8-3 -A company draws its total cost curve and total revenue curve on the same graph.If the firm wishes to maximize profits, it will select the output at which the

A separate average revenue curve is not required when you have the demand curve for a firm.Explain.

Total profit

To find its profit-maximizing output level, a firm should operate where

​ -At optimal output, the firm described in Table 8-1 earns a profit of

The typical total profit graphical presentation is shown as

Whenever marginal cost is positive, average cost curves are upward sloping.

Most consumers in stores use marginal analysis to make their buying decisions.

If marginal cost is rising, then average cost must be rising.

Marginal cost for a firm can be derived from its demand curve.

By definition, a firm that practices satisficing

What Is Economics

The Economony: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

The Economics of the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Contemporary Issues in the Useconomy

Filters

-At optimal output, the firm described in Table 8-1 earns a profit of