Scribd
Upload
17 views4 pages

CH 11 Quiz SG

Uploaded by

Will Hughes
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
17 views4 pages

CH 11 Quiz SG

Uploaded by

Will Hughes
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

Which of the following is a condition of perfect competition?

A) products produced by rival firms are perfect substitutes


B) individual firms can affect market supply
C) industry sales are small
D) restricted entry and exit
E) firms do not have complete knowledge about production and prices

In order to minimize losses in the short run, a perfectly competitive firm should shut down if…
A) total revenue is less than total cost.
B) total revenue is less than total fixed cost.
C) total revenue is less than the difference between total fixed cost and total variable cost.
D) total revenue is less than total variable cost.

When a perfectly-competitive industry is in long-run equilibrium,


A) firms have incentives to enter or exit the industry.
B) market price is equal to minimum long-run average cost.
C) each firm earns a normal return.
D) both b and c
E) all of the above

The next 4 questions refer to the following figure:

These are the cost curves for a perfectly competitive firm.

If market price is $50, how much output will the firm produce?
A) 0 units
B) 100 units
C) 300 units
D) 400 units

If market price is $50, how much profit will the firm earn?
A) $12,000
B) $15,000
C) $3,000
D) $6,000

If market price is $20, how much profit will the firm earn?
A) zero
B) -$3,000
C) $3,000
D) $300
At what level of output will the firm break even?
A) 100
B) 200
C) 250
D) 350

The next 3 questions refer to the following figure:

The graph on the left shows long-run average and marginal cost for a typical firm in a perfectly competitive industry. The
graph on the right shows demand and long-run supply for an increasing-cost industry.

What output will the firm produce?


A) 100
B) 150
C) 200
D) 250

How much profit will the firm earn?


A) zero
B) $200
C) $600
D) $800
E) $1,400

If this were instead a constant cost industry, what would be the price when the industry gets to long-run competitive
equilibrium?
A) $4
B) below $4
C) between $7 and $4
D) $7
E) above $7

A competitive firm will maximize profit by hiring the amount of an input at which
A) the last unit of the input hired adds the same amount to total output as to total cost.
B) the last unit of the input hired adds the same amount to total revenue as to total cost.
C) the additional revenue from the last unit of the input hired exceeds the additional cost of the last unit by
the largest amount.
D) the additional output from the last unit of the input hired exceeds the additional cost of the last unit by
the largest amount.
A firm in a competitive industry faces a market price for output of $30 and a wage rate of $500. At the current level of
employment (40 units of labor), the marginal product of labor is 10. In order to maximize profit, the firm should
A) hire more labor because hiring another unit of labor would increase profit by $300.
B) keep the level of employment the same because the firm is earning a profit of $300.
C) hire less labor because hiring the last unit of labor decreased profit by $200.
D) hire less labor because the firm is suffering a loss of $800.

Economic rent…
A) cannot be earned in long-run competitive equilibrium.
B) is competed away in the long run.
C) is the payment to a more productive resource above its opportunity cost.
D) both a and b
E) none of the above

The next 7 questions refer to the following:


Suppose that the manager of a firm operating in a perfectly competitive market has estimated the average variable cost
function to be:
AVC = 4.0 - 0.0024Q + 0.000006Q2
Fixed costs are $500.

The marginal cost function is:


A) MC = 4.0 - 0.0048Q + 0.000018Q2
B) MC = 4.0 - 0.0012Q + 0.000002Q2
C) MC = 4.0Q - 0.0024Q2 + 0.000012Q3
D) MC = 4.0 - 0.0048Q + 0.000012Q2
E) none of the above

Average variable cost reaches its minimum value at _____ units of output.
A) 20
B) 200
C) 400
D) 600

The minimum value of average variable cost is $_____.


A) $3.95
B) $4.00
C) $3.76
D) $2.72
E) none of the above

If the forecasted price of the firm's output is $4.00, how much output will the firm produce in the short run?
A) zero
B) 266.67
C) 200
D) 26.67
E) none of the above
If the forecasted price of the firm's output is $4.00, how much profit (loss) will the firm earn?
A) $57
B) -$943
C) $557
D) -$443
E) none of the above

If the forecasted price of the firm's output is $3.00, how much output will the firm produce in the short run?
A) zero
B) 266.67
C) 200
D) 26.67
E) none of the above

If the firm shuts down, how much profit (loss) will the firm earn?
A) zero
B) -$500
C) $57
D) -$943
E) none of the above

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy