Quiz
Chapter 14
Erstelle ein kostenloses Konto, um dieses Quiz zu beenden
Speichere deinen Fortschritt und sieh dir dein Endergebnis an.
oder mit deiner E-Mail registrieren
Schon ein Konto? Anmelden
Fragen in diesem Quiz (43)
1The term shut down
- AAnd the term exit both referred to short run decisions that a firm might make
- BAnd the term exit both referred to long-run decisions that a firm might make
- CRefers to a short run decision that a firm might make, where is the term exit refers to a long run decision that a firm might make
- DRefers to a long run decision that a firm might make, whereas the term exit refers to a short run decision that a firm might make
2Free entry means that
- AThe government pays any extra costs for individual firms
- BGovernment funded research lowers the cost of patents other barriers to entry
- CA firms marginal cost is zero
- DNo legal barriers prevent a firm from entering an industry
3When a profit maximizing firms fixed costs are considered sunk in the short run, in the firm
- ACan set price above marginal cost
- BMust set price below total cost
- CWill never show losses
- DCan safely ignore fixed cost when deciding how much output to produce
4Suppose a profit maximizing firm in a competitive market produces rubber bands. When the market price rubber band falls below the minimum of its average total cost, but still lives above the minimum of average variable cost, in the short run the firm will
- AExperience losses but will continue to produce rubber bands
- BShut down
- CEarned both economic and accounting profits
- DRaise the price of its product
5The accountants hired by the Brookside racquet club have determine a total fixed cost to be $75,000, total variable cost to be $130,000, and total revenue to be $125,000. Because of this information, in the short run, the Brookside racquet club should
- AShut down because staying open would be more expensive
- BLower their prices to increase their profits
- CStay open because shutting down would be more expensive
- DStay open because the firm is making an economic profit
6A long run supply curve is flatter than a short run supply curve because
- AFirms can enter and exit the market more easily in the long run then in the short run
- BLong run supply curves are sometimes downward sloping
- CCompetitive firms have more control over demand in the long run
- DFirms in a competitive market face identical Cost structures
7A firm has market power if it can
- AMaximize profits
- BMinimize costs
- CInfluence the market price of the good it sells
- DHire as many workers as it needs at the prevailing wage rate
8Suppose a firm in a competitive market produces and sells eight units of output has a marginal revenue of eight dollars. What would be the firms marginal revenue if it instead produced and sold four units of output?
- A$2
- B$8
- C$22
- D$64
9Consider a firm operating in a competitive market. The firm is producing 40 units of output, has an average total cost of production equal to five dollars, it is earning $240 economic profit in the short run. What is the current market price?
- A$9
- B$10
- C$11
- D$12
10What a restaurant stays open for lunch service even though few customers patronize the restaurant for lunch, which of the following principles is (are) best demonstrated?
- AFixed costs are sunk in the short run
- BIn the short run, only fixed costs are imports to the decision to stay open for lunch
- CIf revenue exceeds variable cost, the restaurant owner is making a smart decision to remain open for lunch
11Suppose a competitive market has a horizontal long run supply curve and is in the long run equilibrium. If demand decreases, we can be certain that the short run,
- AAt least some firms will shut down
- BPrice will fall below marginal cost for some firms
- CPrice will fall below average total cost for some firms
- DAt least some firms will enter the industry
12If all existing firms and all potential firms have the same cost curves, there are no inputs in limited quantities, and the market is characterized by free entry and exit, in the long run market supply curve
- AIs horizontal and equal to the minimum of long run marginal cost for each firm
- BMust slope downward
- CMust slope upward
- DIs horizontal and equal to the minimum of long-run average cost for each firm
13Comparing marginal revenue to marginal cost
- AReveals the contribution of the last unit of production to total profit
- BIt's helpful in making profit maximizing production decisions
- CTells a firm whether it's fixed costs are too high
14In a competitive market, the actions of any single buyer or seller will
- ADiscourage entry by competitors
- BInfluence the profits of other firms in the market
- CHave a negligible impact on the market
15The exit of existing firms from a competitive market will
- AIncrease market supply and increase market price
- BIncrease market supply and decrease market price
- CDecrease market supply and increase market price
- DDecrease market supply and decrease market price
16Changes in the output of a perfectly competitive firm, without any change in the price of the product, will change the firms
- ATotal revenue
- BMarginal revenue
- CAverage revenue
- DAll of the above are correct
17Suppose a firm in a competitive market earned $1000 in total revenue and had a marginal revenue $10 for the last unit produced and sold. What is the average revenue per unit, and how many units are sold?
- AFive dollars and 50 units
- BFive dollars and 100 units
- C$10 and 50 units
- D$10 and 100 units
18A competitive firm would benefit from charging a price below The market price because the firm would achieve
- AHigher average revenue
- BHigher profits
- CLower total costs
- DNone of the above are correct
19In a competitive market the current price is five dollars. The typical firm in that market has ATC=$5.50 and AVC=$5.15
- AIn the short run firms will shut down, in the long run firms will leave the market
- BIn the short run firms will continue to operate, but in the long run firms will leave the market
- CNew firms will likely enter this market to capture any remaining economic profits
- DThe firm will earn zero profits in both the short run and long-run
20Suppose that a firm operating in perfectly competitive market sells 300 units of output at a price of three dollars each. Which of the following statements is correct?
- AMarginal revenue equals three dollars
- BAverage revenue equals $100
- CTotal revenue equals $300
21A restaurant that has market power can
- AMinimize cost more efficiently than its competitors
- BInfluence the market price for the meals it sells
- CReduce its marketing budget more than its competitors
- DIgnore profit maximizing strategies when setting the price for its meals
22Profit maximizing firms enter a competitive market when existing firms in that market have
- ATotal revenues that exceed fixed costs
- BTotal revenues that exceed total variable costs
- CAverage total cost that exceed average revenue
- DAverage total cost less than market price
23For a particular competitive firm, the minimum value of average variable cost is $12 and is reached when 200 units of output are produced. For the same firm, the minimum value of average total cost is $15 and is reached 230 units of output are produced. Which of the following statements is correct?
- AIn the short run, the firm will shut down if the price of its product is $14.
- BIn the long run, the firm will shut down if the price of its product is $11
- CFor this firm, the minimum value of variable cost is $2400
- DIf the firms fixed cost amounts to $500 in the firm cannot earn a positive profit unless the price of its product exceeds $16
24If a profit maximizing firm in a competitive market discovers that, at its current level of production, price is greater than marginal cost, it should
- AShut down
- BReduce its output to continue operating
- CContinue to produce at the current levels
- DIncrease its output
25Which of the following represents the firms long run conditions of exiting a market?
- AP<MC
- BP<FC
- CP<ATC
- DMR<MC
26 Mrs. Smith operates a business in a competitive market. The current market price is $7.50. Her profit maximizing level of production, the average variable cost is eight dollars, and the average total cost is $8.25. Mrs. Smith should
- AShut down her business in the short run but continue to operate in the long run
- BContinue to operate in the short run but shutdown in the long run
- CContinue to operate in both the short run and long-run
- DShut down in both the short run and long-run
27The entry of new firms into a competitive market will
- AIncrease market supply and increase market price
- BIncrease market supply and decrease market price
- CDecrease market supply an increase market price
- DDecrease market supply and decrease market price
28In a market with a fixed number of firms, as long as price is above average
- AVariable cost, each firms marginal cost curve is it supply curve
- BVariable cost, each firms average total cost curve is it supply curve
- CTotal cost, each firms marginal cost curve is it supply curve
- DTotal cost, each firms average total cost curve is it supply curve
29Suppose a firm operates in the short run at the price above its average total cost of production. In the long run the firm should expect
- ANew firms to enter the market
- BThe market price to fall
- CIt's profits to fall
- DAll of the above are correct
30For a certain firm, the 100th unit of output that the firm produces has a marginal revenue of $11 and a marginal cost of $10. It follows that the
- AProduction of the 100th unit of output increases the firms profit by one dollar
- BProduction of 100th unit of output increases the firms average total cost by one dollar
- CFirms profit maximizing level of output is less than 100 units
- DProduction of the 101st unit of output must increase the firms profit by more than one dollar
31When firms are said to be price takers, implies that if a firm raises its price,
- ABuyers will go elsewhere
- BBuyers will pay the higher price in the short run
- CCompetitors will also raise their prices
- DFirms in the industry Will exercise market power
32Which of the following statements best expresses a firms profit maximizing decision rule?
- AIf marginal revenue is greater than marginal cost, the firm should increase its output
- BIf marginal revenue is less than marginal cost, the firm should shut down in the short run
- CIf marginal revenue equals marginal cost, the firm should produce exactly one more unit of output
- DAll of the above are correct
33Suppose that a competitive market is initially in equilibrium. The demand increases. If some resources used in production are not available in sufficient quantities for entering firms,
- AThe long run market supply curve will be upward sloping
- BThe long run market supply curve will be perfectly elastic
- CIn the long run Fernsell suffer economic losses, leading them to exit the industry
- DThe number friends will decrease, in the market will become a monopoly
34A profit maximizing firm in a competitive market is currently producing 200 units of output. It has average revenue of nine dollars and average total cost of seven dollars. It follows that the firms
- AAverage total cost curve intersects the marginal cost curve add an output level of less than 200 units
- BAverage variable cost curve intersects the marginal cost curve at an output level of less than 200 units
- CProfit is $400
- DAll of the above are correct
35If a competitive firm is currently producing a level of output at which marginal revenue exceeds marginal cost, then
- AA one unit increase in output will increase the firms profit
- BA one unit decrease in output will increase the firms profit
- CTotal revenue exceeds total cost
- DTotal cost exceeds total revenue
36Which of these types of costs can be ignored when an individual or a firm is making decisions?
- ASunk costs
- BMarginal costs
- CVariable costs
- DOpportunity costs
37Suppose the long run supply curve for a good is upward sloping. The upward slope could be explained by
- AIncreases in production costs resulting from more firms coming into the market
- BA breakdown of the free entry and exit feature of competition
- CA breakdown of the price taking feature of competition
- DThe stable demand curve for the good, that is, a demand curve that never shifts
38Assume a certain firm is producing Q=1000 units of output. At Q=1000, the firms marginal cost equals $20 and it's average total cost equals $25. The firm sells his output for $30 per unit. At Q=1000, the friends profits equal
- A-$5000
- B$2500
- C$5000
- D$10,000
39In the long run, assuming that the owner of the firm is a competitive industry has positive opportunity costs, she
- AShould exit the industry unless her economic profits are positive
- BWill earn zero accounting profits but positive economic profits
- CWill earn zero economic profits but positive accounting profits
- DShould ignore opportunity cost because they are a type of sunk cost that disappears in the long run
40In the short run, a firm operating in a competitive industry will produce the quantity of output where price equals marginal cost as long as the
- APrice is less than average total cost
- BMarginal revenue exceeds the marginal cost
- CPrice is greater than average variable cost
- DPrice is greater than average fixed cost but less than average variable cost
41Suppose a profit maximizing firm in a competitive market produces rubber bands. When the market price for rubber bands rises above the minimum of its average variable cost, but still lies below the minimum of average total cost, in the short run the farm well
- AExperience losses but will continue to produce rubber bands
- BShut down
- CEarn both economic and accounting profits
- DRaise the price of its product
42The intersection of a firms marginal revenue and marginal cost curve is determines the level of output at which
- ATotal revenue is equal to variable cost
- BTotal revenue is equal to fixed cost
- CTotal revenue is equal to total cost
- DProfit is maximized
43Suppose a firm in each of the two markets listed below where to increase its price by 15%. In which pair with the firm in the first market listed experience dramatic decline in sales, but the from the second market listed were not?
- ACotton and soy beans
- BGasoline and corn
- C#2 lead pencils and college textbooks
- DElectricity and cable television
Informationen
- Beschreibung
- Quiz am Chapter 14, erstellt von Andie Star am 16/07/2016.
- Autor
- Andie Star
- Sprache
- English
- Aufrufe
- 0
- Bewertung
- Noch keine Bewertungen Bewerte dieses Quiz