If a firm's explicit costs are $2,000, its implicit costs are $1,000, and its revenue is $5,000, the firm is earning

A. positive accounting profit of $2,000
B. negative accounting profit of $2,000
C. positive economic profit of $3,000
D. positive economic profit of $2,000
E. positive economic profit of $4,000

5.Use the graph to answer the question below. The quantity is measured in thousands of units.

What quantity will this firm be incentivized to produce in the short run?

A. Zero output to minimize its losses
B. Between 3,000 and 4,000 units to minimize its marginal cost
C. 5,000 units at point A in order to minimize its variable cost
D. Between 5,000 and 6,000 units, where the marginal cost equals the price
E. Approximately 5,800 units at point B to earn normal profit

6.
A firm is earning positive economic profit of $1,000. The firm's implicit costs are $2,000, its explicit costs are $4,000, and its accounting profit is $3,000. What must be its total revenue?

A. $2,000
B. $3,000
C. $4,000
D. $5,000
E. $7,000

7. The graph below shows the marginal revenue, marginal cost, and average total cost at different quantities for a firm in a perfectly competitive market.

At what market price would a firm continue to operate in the short run but leave the market in the long run?

A. $1–$10
B. $11–$20
C. $21–$40
D. $41–$50
E. Above $50

8.Which of the following describes the slope of the long-run average total cost curve when operating at efficient scale?

A. It is flat.
B. It is positive.
C. It is negative.
D. It is negative and then positive.
E. It is positive and then negative.

9.Use the graph to answer the question.

The graph illustrates that

A. the firm's fixed costs are increasing
B. the firm is producing fewer units at every cost level
C. the firm is failing to employ division of labor
D. the firm's variable and total costs are decreasing
E. the firm is experiencing increasing marginal returns
 
 
 

Price $40 $30 $20 P $10 0 2 3 4 Quantity 5 B 6 MC 7 8 ATC AVC 9