Deck 4: Profit Maximization

Question 1

In the short run, a firm will shut down if:

A) MR is greater than minimum AVC
B) MR is less than minimum AVC
C) MR = P_Y
D) MR is less than minimum ATC

Answer 1

B

Question 2

The output level that maximizes profit is found where:

A) the added revenue from selling an additional unit of output is equal to the additional cost of producing that unit of input
B) the slope of the total cost curve is equal to the slope of the total revenue line
C) MR=MC
D) all of the other answers

Answer 2

D

Question 3

If P_Y increases and costs of production remain unchanged, the profit-maximizing firm will:

A) decrease output because it costs more to produce each unit of output
B) will increase output until the new MR is equal to the MC
C) will use the same level of inputs
D) will produce the same amount of output since the firm is a price taker and can not affect market prices

Answer 3

B

Question 4

A profit-maximizing firm will produce where:

A) the additional value of output from using another unit of input is equal to the cost of using that unit of input
B) the difference between total revenues and total costs is largest
C) MR = MC
D) all of the other answers

Question 5

To find the profit maximizing level of input use, a firm must know:

A) MPP, P_Y, and P_X
B) MRP, TRP, and P_Y
C) P_X, MFC, and TFC
D) ARP, P_Y, and TRP

Question 6

An increase in a tax on an input will result in:

A) an increase in input use, and an increase in output
B) a decrease in input use, and a decrease in output
C) a decrease in input use, and an increase in output
D) an increase in input use, and a decrease in output

Question 7

The firm's demand curve for a factor is:

A) MRP in Stage II
B) ARP in Stage II
C) MRP in Stage III
D) TRP in Stage I

Question 8

Perfect competition is an important assumption in economics, because it is used to assume:

A) ceteris paribus
B) TC = TFC + TVC
C) the shut-down point will never be reached
D) prices are fixed

Question 9

The break-even point is:

A) always calculated from the difference between average cost and average revenue in the short run
B) always calculated from the difference between total costs and total revenues in the short run
C) always calculated from the difference between average fixed cost and average revenue in the short run
D) always greater than the shut-down point in the short run

Question 10

Profit, on a per-unit basis, is calculated as:

A) the difference between average total cost and marginal revenue
B) the difference between marginal cost and product price
C) the difference between average fixed cost and marginal revenue
D) the difference between average variable cost and marginal revenue

Question 11

Below are the costs for a pizza restaurant, the output is pizza, in units of (pizza).
$\begin{array}{ll}\mathrm{P}_{\mathrm{Y}}=\$ 20 / \text { pizza } & \text { TFC }=\$ 10 \\\underline{\mathrm{Y} \text { (pizzas })} & \underline{\mathrm{TVC}(\$)} \\0 & 0 \\1 & 20 \\2 & 30 \\3 & 35 \\4 & 42 \\5 & 50 \\6 & 70 \\7 & 100\end{array}$

-The ATC of producing 5 pizzas is equal to:

A) 7
B) 10
C) 12
D) 13

Question 12

Below are the costs for a pizza restaurant, the output is pizza, in units of (pizza).
$\begin{array}{ll}\mathrm{P}_{\mathrm{Y}}=\$ 20 / \text { pizza } & \text { TFC }=\$ 10 \\\underline{\mathrm{Y} \text { (pizzas })} & \underline{\mathrm{TVC}(\$)} \\0 & 0 \\1 & 20 \\2 & 30 \\3 & 35 \\4 & 42 \\5 & 50 \\6 & 70 \\7 & 100\end{array}$

-The MC of producing 4 pizzas is equal to:

A) 7
B) 10
C) 12
D) 13

Question 13

Below are the costs for a pizza restaurant, the output is pizza, in units of (pizza).
$\begin{array}{ll}\mathrm{P}_{\mathrm{Y}}=\$ 20 / \text { pizza } & \text { TFC }=\$ 10 \\\underline{\mathrm{Y} \text { (pizzas })} & \underline{\mathrm{TVC}(\$)} \\0 & 0 \\1 & 20 \\2 & 30 \\3 & 35 \\4 & 42 \\5 & 50 \\6 & 70 \\7 & 100\end{array}$

-The profit-maximizing number pizzas is equal to:

A) 4
B) 5
C) 6
D) 7

Question 14

Below are the costs for a pizza restaurant, the output is pizza, in units of (pizza).
$\begin{array}{ll}\mathrm{P}_{\mathrm{Y}}=\$ 20 / \text { pizza } & \text { TFC }=\$ 10 \\\underline{\mathrm{Y} \text { (pizzas })} & \underline{\mathrm{TVC}(\$)} \\0 & 0 \\1 & 20 \\2 & 30 \\3 & 35 \\4 & 42 \\5 & 50 \\6 & 70 \\7 & 100\end{array}$

-The pizza restaurant should stay in business as long as:

A) it can cover all of its variable costs, and at least some of the fixed costs
B) it can cover all of its fixed costs, and at least some of the variable costs
C) it can pay the total costs
D) price is greater than ATC

Question 15

Below are the costs for a pizza restaurant, the output is pizza, in units of (pizza).
$\begin{array}{ll}\mathrm{P}_{\mathrm{Y}}=\$ 20 / \text { pizza } & \text { TFC }=\$ 10 \\\underline{\mathrm{Y} \text { (pizzas })} & \underline{\mathrm{TVC}(\$)} \\0 & 0 \\1 & 20 \\2 & 30 \\3 & 35 \\4 & 42 \\5 & 50 \\6 & 70 \\7 & 100\end{array}$

-The AVC of producing 5 pizzas is equal to:

A) 7
B) 10
C) 12
D) 13

Question 16

Below are the costs for a pizza restaurant, the output is pizza, in units of (pizza).
$\begin{array}{ll}\mathrm{P}_{\mathrm{Y}}=\$ 20 / \text { pizza } & \text { TFC }=\$ 10 \\\underline{\mathrm{Y} \text { (pizzas })} & \underline{\mathrm{TVC}(\$)} \\0 & 0 \\1 & 20 \\2 & 30 \\3 & 35 \\4 & 42 \\5 & 50 \\6 & 70 \\7 & 100\end{array}$

-16 The maximum profits earned is equal to:

A) 10
B) 20
C) 30
D) 40

Question 17

Below are the costs for a pizza restaurant, the output is pizza, in units of (pizza).
$\begin{array}{ll}\mathrm{P}_{\mathrm{Y}}=\$ 20 / \text { pizza } & \text { TFC }=\$ 10 \\\underline{\mathrm{Y} \text { (pizzas })} & \underline{\mathrm{TVC}(\$)} \\0 & 0 \\1 & 20 \\2 & 30 \\3 & 35 \\4 & 42 \\5 & 50 \\6 & 70 \\7 & 100\end{array}$

-The shut-down point is found at a price equal to:

A) 7
B) 10
C) 12
D) 13

Question 18

Below are the costs for a pizza restaurant, the output is pizza, in units of (pizza).
$\begin{array}{ll}\mathrm{P}_{\mathrm{Y}}=\$ 20 / \text { pizza } & \text { TFC }=\$ 10 \\\underline{\mathrm{Y} \text { (pizzas })} & \underline{\mathrm{TVC}(\$)} \\0 & 0 \\1 & 20 \\2 & 30 \\3 & 35 \\4 & 42 \\5 & 50 \\6 & 70 \\7 & 100\end{array}$

-If the price of pizza is equal to $11/pizza, then the pizza restaurant should:

A) shut down
B) stay open, produce 5 pizzas
C) pay for all of the fixed costs
D) hire fewer workers

Question 19

Below are the costs for a pizza restaurant, the output is pizza, in units of (pizza).
$\begin{array}{ll}\mathrm{P}_{\mathrm{Y}}=\$ 20 / \text { pizza } & \text { TFC }=\$ 10 \\\underline{\mathrm{Y} \text { (pizzas })} & \underline{\mathrm{TVC}(\$)} \\0 & 0 \\1 & 20 \\2 & 30 \\3 & 35 \\4 & 42 \\5 & 50 \\6 & 70 \\7 & 100\end{array}$

-The break-even point is found at a price equal to:

A) 7
B) 10
C) 12
D) 13

Question 20

Below are the costs for a pizza restaurant, the output is pizza, in units of (pizza).
$\begin{array}{ll}\mathrm{P}_{\mathrm{Y}}=\$ 20 / \text { pizza } & \text { TFC }=\$ 10 \\\underline{\mathrm{Y} \text { (pizzas })} & \underline{\mathrm{TVC}(\$)} \\0 & 0 \\1 & 20 \\2 & 30 \\3 & 35 \\4 & 42 \\5 & 50 \\6 & 70 \\7 & 100\end{array}$

-The profit maximizing level of pizza is found where:

A) MR=MC, and MC cuts MR from below
B) MR=MC, and MR cuts MC from below
C) MR=MC, and MC cuts MR from above
D) MR=MC, and MR cuts MC from above

Question 21

Below are the input costs for a Vet Clinic.
Suppose that labor (hrs) is used to produce vet services (appts) at the Vet Clinic.
The wage rate, or price of labor is PX=$20/hr, and the price of an appointment is P<sub>Y<\sub>=$10/appt.
$$ $$ $\quad$

$\begin{array}{lccccc}\underline{\mathrm{X}} & \underline{\mathrm{Y}} & \underline{\text { TRP }} & \underline{\text {TFC}} & \underline{\pi} &\underline{\text {MRP}} &\underline{\text { MFC }} \\\text {UNITS: }& &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 5 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 15 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 30 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 40 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 47 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\7 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-The units for X are:</sub>

A) hrs
B) appts
C) hrs/apt
D) appts/hr

Question 22

Below are the input costs for a Vet Clinic.
Suppose that labor (hrs) is used to produce vet services (appts) at the Vet Clinic.
The wage rate, or price of labor is PX=$20/hr, and the price of an appointment is P<sub>Y<\sub>=$10/appt.
$$ $$ $\quad$

$\begin{array}{lccccc}\underline{\mathrm{X}} & \underline{\mathrm{Y}} & \underline{\text { TRP }} & \underline{\text {TFC}} & \underline{\pi} &\underline{\text {MRP}} &\underline{\text { MFC }} \\\text {UNITS: }& &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 5 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 15 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 30 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 40 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 47 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\7 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-The units for TRP are:</sub>

A) hrs
B) appts
C) hrs/appt
D) $

Question 23

Below are the input costs for a Vet Clinic.
Suppose that labor (hrs) is used to produce vet services (appts) at the Vet Clinic.
The wage rate, or price of labor is PX=$20/hr, and the price of an appointment is P<sub>Y<\sub>=$10/appt.
$$ $$ $\quad$

$\begin{array}{lccccc}\underline{\mathrm{X}} & \underline{\mathrm{Y}} & \underline{\text { TRP }} & \underline{\text {TFC}} & \underline{\pi} &\underline{\text {MRP}} &\underline{\text { MFC }} \\\text {UNITS: }& &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 5 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 15 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 30 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 40 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 47 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\7 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-The units for MRP are:</sub>

A) hrs
B) $/hr
C) $/appt
D) $

Question 24

Below are the input costs for a Vet Clinic.
Suppose that labor (hrs) is used to produce vet services (appts) at the Vet Clinic.
The wage rate, or price of labor is PX=$20/hr, and the price of an appointment is P<sub>Y<\sub>=$10/appt.
$$ $$ $\quad$

$\begin{array}{lccccc}\underline{\mathrm{X}} & \underline{\mathrm{Y}} & \underline{\text { TRP }} & \underline{\text {TFC}} & \underline{\pi} &\underline{\text {MRP}} &\underline{\text { MFC }} \\\text {UNITS: }& &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 5 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 15 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 30 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 40 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 47 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\7 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-The units for MFC are:</sub>

A) hrs
B) $/hr
C) $/appt
D) $

Question 25

Below are the input costs for a Vet Clinic.
Suppose that labor (hrs) is used to produce vet services (appts) at the Vet Clinic.
The wage rate, or price of labor is PX=$20/hr, and the price of an appointment is P<sub>Y<\sub>=$10/appt.
$$ $$ $\quad$

$\begin{array}{lccccc}\underline{\mathrm{X}} & \underline{\mathrm{Y}} & \underline{\text { TRP }} & \underline{\text {TFC}} & \underline{\pi} &\underline{\text {MRP}} &\underline{\text { MFC }} \\\text {UNITS: }& &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 5 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 15 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 30 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 40 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 47 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\7 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-What is the number of appointments when X=0?</sub>

A) 0
B) 5
C) 10
D) 15

Question 26

Below are the input costs for a Vet Clinic.
Suppose that labor (hrs) is used to produce vet services (appts) at the Vet Clinic.
The wage rate, or price of labor is PX=$20/hr, and the price of an appointment is P<sub>Y<\sub>=$10/appt.
$$ $$ $\quad$

$\begin{array}{lccccc}\underline{\mathrm{X}} & \underline{\mathrm{Y}} & \underline{\text { TRP }} & \underline{\text {TFC}} & \underline{\pi} &\underline{\text {MRP}} &\underline{\text { MFC }} \\\text {UNITS: }& &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 5 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 15 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 30 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 40 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 47 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\7 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-What is the profit-maximizing level of labor?</sub>

A) 3
B) 4
C) 6
D) 7

Question 27

Below are the input costs for a Vet Clinic.
Suppose that labor (hrs) is used to produce vet services (appts) at the Vet Clinic.
The wage rate, or price of labor is PX=$20/hr, and the price of an appointment is P<sub>Y<\sub>=$10/appt.
$$ $$ $\quad$

$\begin{array}{lccccc}\underline{\mathrm{X}} & \underline{\mathrm{Y}} & \underline{\text { TRP }} & \underline{\text {TFC}} & \underline{\pi} &\underline{\text {MRP}} &\underline{\text { MFC }} \\\text {UNITS: }& &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 5 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 15 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 30 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 40 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 47 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\7 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-What is the maximum level of profits?</sub>

A) 20
B) 300
C) 310
D) 350

Question 28

Below are the input costs for a Vet Clinic.
Suppose that labor (hrs) is used to produce vet services (appts) at the Vet Clinic.
The wage rate, or price of labor is PX=$20/hr, and the price of an appointment is P<sub>Y<\sub>=$10/appt.
$$ $$ $\quad$

$\begin{array}{lccccc}\underline{\mathrm{X}} & \underline{\mathrm{Y}} & \underline{\text { TRP }} & \underline{\text {TFC}} & \underline{\pi} &\underline{\text {MRP}} &\underline{\text { MFC }} \\\text {UNITS: }& &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 5 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 15 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 30 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 40 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 47 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\7 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-What is the TRP when X=3?</sub>

A) 20
B) 300
C) 310
D) 350

Question 29

Below are the input costs for a Vet Clinic.
Suppose that labor (hrs) is used to produce vet services (appts) at the Vet Clinic.
The wage rate, or price of labor is PX=$20/hr, and the price of an appointment is P<sub>Y<\sub>=$10/appt.
$$ $$ $\quad$

$\begin{array}{lccccc}\underline{\mathrm{X}} & \underline{\mathrm{Y}} & \underline{\text { TRP }} & \underline{\text {TFC}} & \underline{\pi} &\underline{\text {MRP}} &\underline{\text { MFC }} \\\text {UNITS: }& &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 5 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 15 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 30 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 40 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 47 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\7 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-What is the TFC when X=4?</sub>

A) 40
B) 120
C) 80
D) 100

Question 30

Below are the input costs for a Vet Clinic.
Suppose that labor (hrs) is used to produce vet services (appts) at the Vet Clinic.
The wage rate, or price of labor is PX=$20/hr, and the price of an appointment is P<sub>Y<\sub>=$10/appt.
$$ $$ $\quad$

$\begin{array}{lccccc}\underline{\mathrm{X}} & \underline{\mathrm{Y}} & \underline{\text { TRP }} & \underline{\text {TFC}} & \underline{\pi} &\underline{\text {MRP}} &\underline{\text { MFC }} \\\text {UNITS: }& &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 5 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 15 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 30 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 40 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 47 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\7 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-What is the MRP when X=3?</sub>

A) 40
B) 120
C) 150
D) 100

Question 31

Below are the input costs for a Vet Clinic.
Suppose that labor (hrs) is used to produce vet services (appts) at the Vet Clinic.
The wage rate, or price of labor is PX=$20/hr, and the price of an appointment is P<sub>Y<\sub>=$10/appt.
$$ $$ $\quad$

$\begin{array}{lccccc}\underline{\mathrm{X}} & \underline{\mathrm{Y}} & \underline{\text { TRP }} & \underline{\text {TFC}} & \underline{\pi} &\underline{\text {MRP}} &\underline{\text { MFC }} \\\text {UNITS: }& &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 5 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 15 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 30 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 40 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 47 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\7 & 45 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-What is the MFC when X=5?</sub>

A) 2
B) 5
C) 10
D) 20

Question 32

Tom's Tortillas.
Tom purchases X = wheat (mt) and makes flour tortillas Y = tortillas (tortillas).
$\mathrm{P}_{\mathrm{X}}=\$ 4800 / \mathrm{mt}$ $\quad$ $\quad$ $\quad$ $\mathrm{TFC}=\$ 100$

$\begin{array}{ll} \underline{\mathrm{Y}} & \underline{\text { TVC }} & \underline{\text {TFC}} & \underline{TC} &\underline{\text {MC}} &\underline{\text { AVC }} &\underline{\text { ATC }} \\\text {UNITS: }& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 100 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 150 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 180 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 220 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 300 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 400&\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-Of the inputs for Tom listed below, what is most likely to be a fixed cost?

A) labor
B) water
C) sugar
D) rent on the factory

Question 33

Tom's Tortillas.
Tom purchases X = wheat (mt) and makes flour tortillas Y = tortillas (tortillas).
$\mathrm{P}_{\mathrm{X}}=\$ 4800 / \mathrm{mt}$ $\quad$ $\quad$ $\quad$ $\mathrm{TFC}=\$ 100$

$\begin{array}{ll} \underline{\mathrm{Y}} & \underline{\text { TVC }} & \underline{\text {TFC}} & \underline{TC} &\underline{\text {MC}} &\underline{\text { AVC }} &\underline{\text { ATC }} \\\text {UNITS: }& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 100 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 150 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 180 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 220 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 300 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 400&\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-What are the units for TFC?

A) $
B) $/tortilla
C) tortillas
D) $/mt

Question 34

Tom's Tortillas.
Tom purchases X = wheat (mt) and makes flour tortillas Y = tortillas (tortillas).
$\mathrm{P}_{\mathrm{X}}=\$ 4800 / \mathrm{mt}$ $\quad$ $\quad$ $\quad$ $\mathrm{TFC}=\$ 100$

$\begin{array}{ll} \underline{\mathrm{Y}} & \underline{\text { TVC }} & \underline{\text {TFC}} & \underline{TC} &\underline{\text {MC}} &\underline{\text { AVC }} &\underline{\text { ATC }} \\\text {UNITS: }& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 100 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 150 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 180 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 220 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 300 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 400&\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-What is the level of TFC for producing 0 tortillas (shutting down)?

A) 100
B) 0
C) 200
D) 150

Question 35

Tom's Tortillas.
Tom purchases X = wheat (mt) and makes flour tortillas Y = tortillas (tortillas).
$\mathrm{P}_{\mathrm{X}}=\$ 4800 / \mathrm{mt}$ $\quad$ $\quad$ $\quad$ $\mathrm{TFC}=\$ 100$

$\begin{array}{ll} \underline{\mathrm{Y}} & \underline{\text { TVC }} & \underline{\text {TFC}} & \underline{TC} &\underline{\text {MC}} &\underline{\text { AVC }} &\underline{\text { ATC }} \\\text {UNITS: }& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 100 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 150 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 180 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 220 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 300 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 400&\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-What is the level of TVC for producing 0 tortillas (shutting down)?

A) 100
B) 0
C) 200
D) 150

Question 36

Tom's Tortillas.
Tom purchases X = wheat (mt) and makes flour tortillas Y = tortillas (tortillas).
$\mathrm{P}_{\mathrm{X}}=\$ 4800 / \mathrm{mt}$ $\quad$ $\quad$ $\quad$ $\mathrm{TFC}=\$ 100$

$\begin{array}{ll} \underline{\mathrm{Y}} & \underline{\text { TVC }} & \underline{\text {TFC}} & \underline{TC} &\underline{\text {MC}} &\underline{\text { AVC }} &\underline{\text { ATC }} \\\text {UNITS: }& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 100 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 150 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 180 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 220 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 300 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 400&\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-What is the level of TC for producing 0 tortillas (shutting down)?

A) 100
B) 0
C) 200
D) 150

Question 37

Tom's Tortillas.
Tom purchases X = wheat (mt) and makes flour tortillas Y = tortillas (tortillas).
$\mathrm{P}_{\mathrm{X}}=\$ 4800 / \mathrm{mt}$ $\quad$ $\quad$ $\quad$ $\mathrm{TFC}=\$ 100$

$\begin{array}{ll} \underline{\mathrm{Y}} & \underline{\text { TVC }} & \underline{\text {TFC}} & \underline{TC} &\underline{\text {MC}} &\underline{\text { AVC }} &\underline{\text { ATC }} \\\text {UNITS: }& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 100 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 150 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 180 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 220 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 300 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 400&\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-What is the level of TC for producing 3 tortillas?

A) 100
B) 180
C) 280
D) 320

Question 38

Tom's Tortillas.
Tom purchases X = wheat (mt) and makes flour tortillas Y = tortillas (tortillas).
$\mathrm{P}_{\mathrm{X}}=\$ 4800 / \mathrm{mt}$ $\quad$ $\quad$ $\quad$ $\mathrm{TFC}=\$ 100$

$\begin{array}{ll} \underline{\mathrm{Y}} & \underline{\text { TVC }} & \underline{\text {TFC}} & \underline{TC} &\underline{\text {MC}} &\underline{\text { AVC }} &\underline{\text { ATC }} \\\text {UNITS: }& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 100 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 150 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 180 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 220 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 300 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 400&\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-What are the units for ATC?

A) $
B) $/tortilla
C) tortillas
D) $/mt

Question 39

Tom's Tortillas.
Tom purchases X = wheat (mt) and makes flour tortillas Y = tortillas (tortillas).
$\mathrm{P}_{\mathrm{X}}=\$ 4800 / \mathrm{mt}$ $\quad$ $\quad$ $\quad$ $\mathrm{TFC}=\$ 100$

$\begin{array}{ll} \underline{\mathrm{Y}} & \underline{\text { TVC }} & \underline{\text {TFC}} & \underline{TC} &\underline{\text {MC}} &\underline{\text { AVC }} &\underline{\text { ATC }} \\\text {UNITS: }& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 100 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 150 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 180 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 220 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 300 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 400&\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-What are the units for AVC?

A) $
B) $/tortilla
C) tortilla
D) $/mt

Question 40

Tom's Tortillas.
Tom purchases X = wheat (mt) and makes flour tortillas Y = tortillas (tortillas).
$\mathrm{P}_{\mathrm{X}}=\$ 4800 / \mathrm{mt}$ $\quad$ $\quad$ $\quad$ $\mathrm{TFC}=\$ 100$

$\begin{array}{ll} \underline{\mathrm{Y}} & \underline{\text { TVC }} & \underline{\text {TFC}} & \underline{TC} &\underline{\text {MC}} &\underline{\text { AVC }} &\underline{\text { ATC }} \\\text {UNITS: }& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 100 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 150 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 180 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 220 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 300 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 400&\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-What is the level of TC for producing 6 tortillas?

A) 100
B) 400
C) 500
D) 600

Question 41

Tom's Tortillas.
Tom purchases X = wheat (mt) and makes flour tortillas Y = tortillas (tortillas).
$\mathrm{P}_{\mathrm{X}}=\$ 4800 / \mathrm{mt}$ $\quad$ $\quad$ $\quad$ $\mathrm{TFC}=\$ 100$

$\begin{array}{ll} \underline{\mathrm{Y}} & \underline{\text { TVC }} & \underline{\text {TFC}} & \underline{TC} &\underline{\text {MC}} &\underline{\text { AVC }} &\underline{\text { ATC }} \\\text {UNITS: }& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 100 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 150 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 180 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 220 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 300 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 400&\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-What is the level of ATC for producing 5 tortillas?

A) 50
B) 60
C) 70
D) 80

Question 42

Tom's Tortillas.
Tom purchases X = wheat (mt) and makes flour tortillas Y = tortillas (tortillas).
$\mathrm{P}_{\mathrm{X}}=\$ 4800 / \mathrm{mt}$ $\quad$ $\quad$ $\quad$ $\mathrm{TFC}=\$ 100$

$\begin{array}{ll} \underline{\mathrm{Y}} & \underline{\text { TVC }} & \underline{\text {TFC}} & \underline{TC} &\underline{\text {MC}} &\underline{\text { AVC }} &\underline{\text { ATC }} \\\text {UNITS: }& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 100 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 150 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 180 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 220 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 300 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 400&\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-What is the level of AVC for producing 5 tortillas?

A) 50
B) 60
C) 70
D) 80

Question 43

Tom's Tortillas.
Tom purchases X = wheat (mt) and makes flour tortillas Y = tortillas (tortillas).
$\mathrm{P}_{\mathrm{X}}=\$ 4800 / \mathrm{mt}$ $\quad$ $\quad$ $\quad$ $\mathrm{TFC}=\$ 100$

$\begin{array}{ll} \underline{\mathrm{Y}} & \underline{\text { TVC }} & \underline{\text {TFC}} & \underline{TC} &\underline{\text {MC}} &\underline{\text { AVC }} &\underline{\text { ATC }} \\\text {UNITS: }& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\0& \underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\1 & 100 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\2 & 150 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\3 & 180 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\4 & 220 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\5 & 300 &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\6 & 400&\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } &\underline {\quad\quad } \\\end{array}$

-What is the level of MC for producing 5 tortillas?

A) 50
B) 60
C) 70
D) 80

Question 44

Tom has what type of cost structure?

A) increasing
B) decreasing
C) constant
D) typical

Question 45

The MC for Tom's Tortillas represent:

A) additional costs of production for one more tortilla
B) additional costs of production for one more mt of wheat
C) additional costs of production for one more mt of wheat
D) average costs of production for one more worker

Question 46

Suppose Tom is earning zero economic profit. Tom:

A) could do better in a different occupation
B) is earning as much as he is worth
C) should shut down immediately
D) didn't take opportunity costs into account

Question 47

A pineapple grower with positive economic profit might stay in business, because:

A) she is making more than she could earn in the next-best alternative
B) she could make more in a factory job
C) neither a nor b
D) both a and b

Question 48

A dairy farmer with negative economic profit might stay in business, because:

A) she prefers farming over other occupations
B) it could be a bad weather year in the short run
C) both a and b
D) neither a nor b

Question 49

For a perfectly competitive firm, prices are:

A) fixed and given
B) variable with output
C) variable with input
D) profitable

Question 50

Perfect competition assumes all except the following:

A) homogeneous product
B) large number of buyers
C) profits
D) perfect information

Question 51

Below is the production function for a flour mill, where the input is grain (X = wheat), in bushels (bu) and the output is flour (Y = flour), in pounds (lb). P_X = $5/bu, P_Y = $2/lb.
A. What is the flour mill's objective as a business firm and in completing this chart? B. Explain how the flour mill would identify the profit-maximizing level of input, and state what that level is. C. If the wage rate (P_X) increased, would the flour mill hire more or fewer workers? Explain why. D. If the price of plants (P_Y) increased, would the flour mill hire more or fewer workers? Explain why.

Question 52

Draw a graph for TRP, TFC, MRP, and MFC. Be sure to include labels and units. Identify the profit-maximizing level of input in the graphs.

Question 53

A greenhouse purchases X = seeds (lbs) and plants them to produce Y = flowers (flowers). P_X = $60/lb TFC = $10 P_Y = $20/flower
A. Complete the cost chart to include all costs. B. Give an example of a fixed cost for the greenhouse; explain why it is fixed. C. Give an example of a variable cost for the greenhouse; explain why it is variable. D. Define opportunity costs and describe the greenhouse's opportunity costs. E. Do costs in the table above include opportunity costs? Explain. F. What is the profit-maximizing level of output? Explain. G. Identify the shut down (SD) and break even (BE) points in the chart. H. Briefly explain why the greenhouse might stay in business if SDY

Question 54

Graph TC, TVC, TFC, ATC, AVC, and MC. Identify the shut down and break even points in the graph.

Question 55

List and briefly explain the four conditions of perfect competition.

Question 56

Why do we assume perfect competition in our study of profit-maximization?

Question 57

Explain "marginal decision making," why it is important, and how it is done.

Question 58

Write an essay that defines and explains the concept of, "perfect competition."

Question 59

Select a real-world firm, and carefully explain which characteristics of perfect competition are met by the firm, and which are not.

Question 60

Define and explain the terms: TRP, ARP, MRP, TFC, and MFC.

Question 61

Suppose that a steakhouse purchases natural beef (X=meat, in lbs) and uses it to produce steak dinners (Y=dinners, in no. of meals), as shown in the chart below. The price of meat (Px) is $20/lb, and the price of steak dinners (Py) is equal to $10/meal. Use a chart to find the profit-maximizing level of natural beef for the firm to purchase.

Question 62

Beef that is produced with antibiotics and hormones is much cheaper than natural beef. Would the firm make more profits using conventional meat from a feedlot? Discuss and explain.

Question 63

Many individuals and groups argue that we should reduce our consumption of oil and petroleum products. One proposed policy is to tax gasoline. Use a graph to show the impact of a tax on gasoline on the level of usage. How high would the tax have to be to reduce consumption?

Question 64

Define and explain the terms: TR, TC, MR, and MC.

Question 65

Suppose that a wheat farm has total fixed costs (TFC) equal to $20, and the price of seed wheat (Py) is equal to $14/bu. Use a chart to find the profit-maximizing level of seed wheat for the farm to produce.

Question 66

Use a graph to demonstrate why a firm might remain in business if it had negative economic profits. Be sure to explain the graph carefully and completely.

Question 67

Suppose that a wheat farm has total fixed costs (TFC) equal to $10, and the price of wheat (Py) is equal to $14/bu. Use a chart to find the profit-maximizing level of wheat for the farm to produce.
A. Give an example of a fixed cost for the wheat farm; explain why it is fixed. B. Give an example of a variable cost for the wheat farm; explain why it is variable. C. Define opportunity costs and describe the farmer's opportunity costs. D. Do costs in the table above include opportunity costs? Explain. E. Explain why the total cost curve is shaped the way that it is. F. Briefly state the relationship between average and marginal costs. G. What is the profit-maximizing level of output? What is the maximum level of profits that the farm can earn? H. What is the breakeven price? What is the breakeven quantity? I. What is the shut down price? What is the shut down quantity? J. What happen to fixed costs in the long run? What are the break even and shut down points in the long run? K. Graph TC, TVC, TFC, ATC, AVC, and MC. Include labels and units.