Question 1

Exhibit 6-3  
-Refer to Exhibit 6-3.Calculate the marginal cost for each of these units of output: third,fifth,and eighth.

Accepted Answer

Third unit: $53 - $4

Question 2

A firm in a competitive market can control the price it charges its buyers.

Accepted Answer

A) True 
 B)False

Question 3

The term diminishing returns to labor means that

Accepted Answer

A) the wage rate falls as a person takes on more jobs. 
B) total output decreases as one more unit of labor is applied to production. 
C) the market value of labor decreases as more labor is supplied. 
D) increases in output decline as additional units of labor are used in production. 
E) the production of labor is becoming less profitable with decreasing real wages. 
A) the wage rate falls as a person takes on more jobs. 
B) total output decreases as one more unit of labor is applied to production. 
C) the market value of labor decreases as more labor is supplied. 
D) increases in output decline as additional units of labor are used in production. 
E) the production of labor is becoming less profitable with decreasing real wages.

Question 4

What is the assumption of a competitive market and what are the implications of this assumption? Provide one example of this type of market.

Accepted Answer

In a competitive market,there are many f

Question 5

Which of the following statements is true?

Accepted Answer

A) Price-taking behavior by competitive firms does not have an analogy in the theory of the consumer. 
B) The more competitive a market,the more prices are expected to vary between firms in the market. 
C) Buyers and sellers individually set prices. 
D) A competitive firm is a price-taker. 
E) A competitive firm is a price-maker. 
A) Price-taking behavior by competitive firms does not have an analogy in the theory of the consumer. 
B) The more competitive a market,the more prices are expected to vary between firms in the market. 
C) Buyers and sellers individually set prices. 
D) A competitive firm is a price-taker. 
E) A competitive firm is a price-maker.

Question 6

Exhibit 6-3  
-Refer to Exhibit 6-3.If output is 6 units,what must the output price be in order for the firm to break even? Round to the nearest penny.

Accepted Answer

The answer of Exhibit 6-3  
-Refer to Exhibit 6-3.If...

Question 7

If supply is perfectly elastic,

Accepted Answer

A) producer surplus is equal to zero. 
B) an increase in demand decreases producer surplus. 
C) an upward shift of supply decreases producer surplus. 
D) a downward shift of supply decreases producer surplus. 
E) no output is produced. 
A) producer surplus is equal to zero. 
B) an increase in demand decreases producer surplus. 
C) an upward shift of supply decreases producer surplus. 
D) a downward shift of supply decreases producer surplus. 
E) no output is produced.

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

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 10

The market supply curve tends to get steeper as output increases.

Accepted Answer

A) True 
 B)False

Question 11

How much a firm changes its output in response to a price change is captured by the firm's

Accepted Answer

A) production function. 
B) cost function. 
C) function of diminishing returns. 
D) supply curve. 
E) demand curve. 
A) production function. 
B) cost function. 
C) function of diminishing returns. 
D) supply curve. 
E) demand curve.

Question 12

Producer surplus is the difference between the marginal cost of an item and the price received for it.

Accepted Answer

A) True 
 B)False

Question 13

The three basic types of businesses in the United States are

Accepted Answer

A) enterprises,partnerships,and corporations. 
B) partnerships,multinationals,and corporations. 
C) partnerships,firms,and sole proprietorships. 
D) corporations,households,and sole proprietorships. 
E) corporations,sole proprietorships,and partnerships. 
A) enterprises,partnerships,and corporations. 
B) partnerships,multinationals,and corporations. 
C) partnerships,firms,and sole proprietorships. 
D) corporations,households,and sole proprietorships. 
E) corporations,sole proprietorships,and partnerships.

Question 14

Total costs are the ____ variable and fixed costs.

Accepted Answer

A) quotient of 
B) difference between 
C) product of 
D) sum of 
E) difference between total revenue and the total of 
A) quotient of 
B) difference between 
C) product of 
D) sum of 
E) difference between total revenue and the total of

Question 15

Total revenue always increases if price increases.

Accepted Answer

A) True 
 B)False

Question 16

The main advantage of a corporation over other types of firms is that owners also manage the firm.

Accepted Answer

A) True 
 B)False

Question 17

Because marginal product decreases as input is increased,

Accepted Answer

A) nothing is implied about how much input is required to produce one more unit of output. 
B) it takes decreasing amounts of input to produce one more unit of output. 
C) it takes increasing amounts of input to produce one more unit of output. 
D) the amount of input it takes to produce one more unit of output does not change. 
E) it takes zero input to produce one more unit of output. 
A) nothing is implied about how much input is required to produce one more unit of output. 
B) it takes decreasing amounts of input to produce one more unit of output. 
C) it takes increasing amounts of input to produce one more unit of output. 
D) the amount of input it takes to produce one more unit of output does not change. 
E) it takes zero input to produce one more unit of output.

Question 18

A firm maximizes losses when its output level is where marginal product equals marginal cost.

Accepted Answer

A) True 
 B)False

Question 19

A production function shows the relationship between

Accepted Answer

A) variable costs and total costs. 
B) a fixed input and output. 
C) total output and total costs. 
D) fixed costs and total costs. 
E) a variable input and output. 
A) variable costs and total costs. 
B) a fixed input and output. 
C) total output and total costs. 
D) fixed costs and total costs. 
E) a variable input and output.

Question 20

In a market diagram,producer surplus is shaped like a triangle bounded by the vertical axis,the demand curve,and the supply curve.

Accepted Answer

A) True 
 B)False

Exam 6: The Supply Curve and the Behavior of Firms

Exhibit 6-3 -Refer to Exhibit 6-3.Calculate the marginal cost for each of these units of output: third,fifth,and eighth.

A firm in a competitive market can control the price it charges its buyers.

The term diminishing returns to labor means that

What is the assumption of a competitive market and what are the implications of this assumption? Provide one example of this type of market.

Which of the following statements is true?

Exhibit 6-3 -Refer to Exhibit 6-3.If output is 6 units,what must the output price be in order for the firm to break even? Round to the nearest penny.

If supply is perfectly elastic,

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

Producer surplus equals profits

The market supply curve tends to get steeper as output increases.

How much a firm changes its output in response to a price change is captured by the firm's

Producer surplus is the difference between the marginal cost of an item and the price received for it.

The three basic types of businesses in the United States are

Total costs are the ____ variable and fixed costs.

Total revenue always increases if price increases.

The main advantage of a corporation over other types of firms is that owners also manage the firm.

Because marginal product decreases as input is increased,

A firm maximizes losses when its output level is where marginal product equals marginal cost.

A production function shows the relationship between

In a market diagram,producer surplus is shaped like a triangle bounded by the vertical axis,the demand curve,and the supply curve.

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model: Price Floors,price Ceilings,and Elasticity

The Demand Curve and the Behavior of Consumers

The Interaction of People in 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 and Globalization

International Trade

International Finance

Reading,understanding,and Creating Graphs

Consumer Theory With Indifference Curves

Producer Theory With Isoquants

Present Discounted Value

The Miracle of Compound Growth

Deriving the Growth Accounting Formula

Deriving the Formula for the Keynesian Multiplier and the Forward-Looking Consumption Model

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