QUESTION 1

1. Whenever marginal cost is equal to average total cost, average total cost must fall
2. True
3. False

1.33 points

QUESTION 2

1. The profit maximizing level of output is where MR = MC and MC crosses MR from above.
2. True
3. False

1.33 points

QUESTION 3

1. Managers prefer the marginal approach when analyzing cost and investigating where their profit maximizing level of output is because managers would prefer to look at profit and cost per unit to maximize how much they can get out of each unit sold
2. True
3. False

1.33 points

QUESTION 4

1. In the short run if a firm has losses they exit they always exit the industry
2. True
3. False

1.33 points

QUESTION 5

1. Firms in the short run have two types of inputs, variable inputs and fixed inputs which gives them two types of costs, variable costs and fixed costs
2. True
3. False

1.33 points

QUESTION 6

1. The Average product of labor shows, on average, how much of the firms total output each worker makes
2. True
3. False

1.33 points

QUESTION 7

1. Marginal Variables are always plotted between points because they represent fixed points in time
2. True
3. False

1.33 points

QUESTION 8

1. In the long run firms will always produce on the upward sloping portion of their Long Run Average Total Cost curve
2. True
3. False

1.33 points

QUESTION 9

1. In the long run the upward sloping portion of the firms Long Run Average Total Cost curve represents economies of scale
2. True
3. False

1.33 points

QUESTION 10

1. Economic profit is different than Accounting Profit in that economic profit takes into consideration Total Cost which represents explicit and implicit costs
2. True
3. False

1.33 points

QUESTION 11

1. When calculating Total Revenue we know that it is simply equal to Price multiplied by Marginal Cost
2. True
3. False

1.33 points

QUESTION 12

1. The firms profit maximizing level of output is a stable equilibrium
2. True
3. False

1.33 points

QUESTION 13

1. For a monopoly the individual monopolies demand curve is a horizontal, infinitely elastic line.
2. True
3. False

1.33 points

QUESTION 14

1. Most firms we interact with in our daily lives are oligopolies
2. True
3. False

1.33 points

QUESTION 15

1. Price discriminatory monopolies are always harmful to the consumer but always beneficial to the monopoly
2. True
3. False

1.33 points

QUESTION 16

1. All of following are requirements for perfect competition except one.Which one?
2. a.Large number of buyers and sellers where no buy or seller has any power over price
3. b.Homogeneity
4. c.Perfect Knowledge
5. d.Structure of organization (Corporation, sole proprietorship, etc...)

1.33 points

QUESTION 17

2. Consider the above graph.Which of the following is the firms profit maximizing level of output and price?
3. a.Q=200,P=$5
4. b.Q=275, P=$7
5. c.Q=475, P=10
6. d.Q=475, P=$8

1.33 points

QUESTION 18

1. In the long run, easy entry/exit ensures that amonopolisticallycompetitivefirm will
2. a.Produce at minimum efficiency scale
3. b.earn an economic profit
4. c.Earn a normal return
5. d.standardize its product

1.33 points

QUESTION 19

1. A single-price monopolist is producing 500 units of output. At that level, price is $200, and average total cost is $150. In addition, both marginal cost and marginal revenue equal $120. Which of the following statements is correct in the short run?
2. The firm has total costs of $60,000
3. The firm could increase its profit by increasing output
4. The firm has a profit per unit of $50
5. The firm is suffering an economic loss of $15,000

1.33 points

QUESTION 20

2. Judging by the picture above the monopolists profit maximizing level of output is
3. a.D
4. b.C
5. c.A
6. d.B

1.33 points

QUESTION 21

1. If Price exceeds Average Total Cost
2. a.The firm earns an economic profit
3. b.the firm earns an accounting profit
4. c.there are losses
5. d.the firm exits the industry

1.33 points

QUESTION 22

1. The overall thesis of perfect competition is that
2. a.Perfect competition will always charge a higher price than monopoly and leave the consumer worse off
3. b.Perfectly competitive firms have a negatively sloped demand curve because of product differentation
4. c.Perfect competition allows only a few firms to serve the population efficiently
5. d.Perfect competition will always pass the lowest price on to consumers and provide them with the highest amount of a product

1.33 points

QUESTION 23

1. The difference between firms in the long run and the short run is that
2. a.Firms in the short run can shut down with no other costs
3. b.Firms in the long run can vary all of their inputs to the best of their ability
4. c.Firms never operate in the short run
5. d.Firms in the long run are more common

1.33 points

QUESTION 24

1. If TR =80Q and TC = 5Q²+50Q+200
2. a.The firm is in the short run charging a price of 80 and has an ATC of 5Q+50+[200/Q]
3. b.The firm is in the short run charging a price of 80 and has an ATC of [5Q+50+200]/Q
4. c.The firm is in the long runcharginga price of80and has an ATC of 5Q+50+[200/Q]
5. d.The firm is in the long runcharging a price of80and has an ATC of [5Q+50+200]/Q

1.33 points

QUESTION 25

1. Oligopolies
2. a.will never compete with one another
3. b.will sometimes compete with one another
4. c.will always compete with one another until they supply the market with everything it wants
5. d.will always compete until they supply the market with a fraction of total demand

1.33 points

QUESTION 26

1. If a perfectly competitive firm has the situation where MR=MC=5 and ATC=3 with a Q* of 4
2. a.The firm has losses
3. b.The firm has an economic profit of 8
4. c.the firm has an accounting profit of 8
5. d.The firm has a profit of 12

1.33 points

QUESTION 27

1. The primary advantage of monopolistic competition is that
2. a.There are no advantages to monopolistic competition
3. b.there are a limited number of firms to choose from making things easier for us
4. c.the fact that sellers retain some pricing discretion and can offer heterogenous products give us the ability to choose what we like based on our tastes
5. d.competition is eliminated

1.33 points

QUESTION 28

1. A monopolists total revenue curve
2. a.is horizontal
3. b.constantly declines
4. c.is a vertical line
5. d.rises, reaches a peak and then falls

1.33 points

QUESTION 29

1. Choose the one that is not a reason monopolies arise
2. a.Competition amongst firms
3. b.Economies of scale
4. c.externalities
5. d.patents/copyrights