Eco 200 mid term exam

Eco 200 mid term exam

Chapter 7 Question 1 Economic profit is defined as
		A.  total revenue minus explicit costs   B.  total revenue minus implicit and explicit costs     C.  total revenue plus implicit costs     D.  total revenue minus implicit costs

 

A firm's opportunity costs of using resources provided by the firm's owners are called
		A.  explicit costs   B.  implicit costs     C.  fixed costs     D.  sunk costs

 

Inputs that can be increased or decreased in the short run are called
		A.  variable inputs     B.  fixed inputs     C.  economic inputs     D.  accounting inputs

 

The short run is a period of time
		A.  during which all resources may be varied     B.  during which all resources are fixed   C.  during which at least one resource is fixed     D.  equal to or less than six months

 

The additional output obtained by adding another unit of labor to the production process is called
		A.  the marginal cost of labor     B.  the average output of labor     C.  the marginal utility of labor   D.  the marginal product of labor

 

When diminishing marginal returns set in, TOTAL product
		A.  decreases at an increasing rate     B.  increases at an increasing rate   C.  increases at a decreasing rate     D.  decreases at a decreasing rate

 

Total fixed cost divided by the level of output yields
		A.  average variable cost     B.  marginal cost   C.  average fixed cost     D.  average total cost

 

The marginal cost curve intersects the minimum point of the average variable cost curve.
		True     False

 

If marginal cost exceeds average variable cost,
		A.  marginal cost is greater than average total cost     B.  average variable cost is decreasing     C.  average variable cost is negative   D.  average variable cost is increasing

 

Economies of scale occur where
		A.  long-run average cost rises as one firm expands plant size     B.  long-run average cost falls as new firms enter the industry   C.  long-run average cost falls as one firm expands plant size     D.  short-run average cost falls as new firms enter the industry

 

Which of the following is NOT necessarily a characteristic of perfect competition?
		A.  easy entry and exit in the long run     B.  a homogeneous product     C.  a large number of buyers and sellers   D.  low prices

 

Chapter 8 Question 2 If a perfectly competitive firm raises its price, its sales decrease to zero.
		True     False

 

The demand curve for the output of a perfectly competitive firm is
		A.  perfectly inelastic     B.  unit elastic   C.  perfectly elastic     D.  downward sloping

 

The total revenue curve of a perfectly competitive firm
		A.  has a diminishing slope as output increases     B.  is horizontal     C.  is vertical   D.  has a constant slope as output increases

 

The golden rule of profit maximization states that ANY firm maximizes profit by producing where
		A.  price equals marginal revenue     B.  price equals average revenue     C.  demand is unit elastic, and total revenue is greatest   D.  marginal revenue equals marginal cost

 

Chapter 8 Question 6 Which of the following is true at each level of output for a perfectly competitive firm?
		A.  MC = AVC = ATC     B.  MR = AR = MC   C.  AR = MR = P     D.  MR = MC

 

Suppose a perfectly competitive firm's marginal revenue is $10 while its marginal cost is $11. Under these circumstances the firm
		A.  needs to know the market price before it can determine whether it is maximizing profit   B.  is not maximizing profit and should decrease output     C.  is not maximizing profit and should increase output     D.  is maximizing profit and should not change output

 

Chapter 8 Question 8 If a perfectly competitive firm is incurring a short-run loss, it
		A.  then will incur a long-run loss   B.  will continue to operate in the short run if its variable cost is covered     C.  will continue to operate in the short run if its fixed cost is covered     D.  will shut down

 

The short-run supply curve of a perfectly competitive firm is
		A.  the part of its marginal cost curve rising above the average variable cost curve     B.  the part of its marginal cost curve below the average variable cost curve     C.  its average total cost curve     D.  its average fixed cost curve

 

Which of the following is true for a perfectly competitive firm in the long run?
		A.  MC = ATC = AFC   B.  MR = MC = ATC     C.  MR = MC > ATC     D.  MR = MC = AFC

 

Chapter 9 Question 1 Anything that prevents new firms from competing on an equal basis with existing firms in an industry is called a barrier to entry.
		True     False

 

Which of the following is true of monopoly?
		A.  The firm is a price taker.   B.  There are no close substitutes for the product being produced.     C.  The firm faces a horizontal demand curve.     D.  There are no barriers to entry.

 

A monopolist has complete control over both price and quantity of output.
		True   False

 

The demand curve facing a single-price monopolist
		A.  is the same as its average revenue curve     B.  is the same as the perfect competitor's demand curve     C.  is the same as its marginal revenue curve     D.  lies below its average revenue curve

 

For a monopolist, marginal revenue is
		A.  equal to average revenue     B.  greater than price     C.  equal to price   D.  less than price Chapter 7 Question 1 Economic profit is defined as       A.  total revenue minus explicit costs   B.  total revenue minus implicit and explicit costs     C.  total revenue plus implicit costs     D.  total revenue minus implicit costs         A firm's opportunity costs of using resources provided by the firm's owners are called       A.  explicit costs   B.  implicit costs     C.  fixed costs     D.  sunk costs         Inputs that can be increased or decreased in the short run are called     A.  variable inputs     B.  fixed inputs     C.  economic inputs     D.  accounting inputs         The short run is a period of time       A.  during which all resources may be varied     B.  during which all resources are fixed   C.  during which at least one resource is fixed     D.  equal to or less than six months         The additional output obtained by adding another unit of labor to the production process is called       A.  the marginal cost of labor     B.  the average output of labor     C.  the marginal utility of labor   D.  the marginal product of labor         When diminishing marginal returns set in, TOTAL product       A.  decreases at an increasing rate     B.  increases at an increasing rate   C.  increases at a decreasing rate     D.  decreases at a decreasing rate         Total fixed cost divided by the level of output yields       A.  average variable cost     B.  marginal cost   C.  average fixed cost     D.  average total cost         The marginal cost curve intersects the minimum point of the average variable cost curve.     True     False         If marginal cost exceeds average variable cost,       A.  marginal cost is greater than average total cost     B.  average variable cost is decreasing     C.  average variable cost is negative   D.  average variable cost is increasing         Economies of scale occur where       A.  long-run average cost rises as one firm expands plant size     B.  long-run average cost falls as new firms enter the industry   C.  long-run average cost falls as one firm expands plant size     D.  short-run average cost falls as new firms enter the industry         Which of the following is NOT necessarily a characteristic of perfect competition?       A.  easy entry and exit in the long run     B.  a homogeneous product     C.  a large number of buyers and sellers   D.  low prices         Chapter 8 Question 2 If a perfectly competitive firm raises its price, its sales decrease to zero.     True     False         The demand curve for the output of a perfectly competitive firm is       A.  perfectly inelastic     B.  unit elastic   C.  perfectly elastic     D.  downward sloping         The total revenue curve of a perfectly competitive firm       A.  has a diminishing slope as output increases     B.  is horizontal     C.  is vertical   D.  has a constant slope as output increases         The golden rule of profit maximization states that ANY firm maximizes profit by producing where       A.  price equals marginal revenue     B.  price equals average revenue     C.  demand is unit elastic, and total revenue is greatest   D.  marginal revenue equals marginal cost         Chapter 8 Question 6 Which of the following is true at each level of output for a perfectly competitive firm?       A.  MC = AVC = ATC     B.  MR = AR = MC   C.  AR = MR = P     D.  MR = MC         Suppose a perfectly competitive firm's marginal revenue is $10 while its marginal cost is $11. Under these circumstances the firm       A.  needs to know the market price before it can determine whether it is maximizing profit   B.  is not maximizing profit and should decrease output     C.  is not maximizing profit and should increase output     D.  is maximizing profit and should not change output         Chapter 8 Question 8 If a perfectly competitive firm is incurring a short-run loss, it       A.  then will incur a long-run loss   B.  will continue to operate in the short run if its variable cost is covered     C.  will continue to operate in the short run if its fixed cost is covered     D.  will shut down         The short-run supply curve of a perfectly competitive firm is     A.  the part of its marginal cost curve rising above the average variable cost curve     B.  the part of its marginal cost curve below the average variable cost curve     C.  its average total cost curve     D.  its average fixed cost curve         Which of the following is true for a perfectly competitive firm in the long run?       A.  MC = ATC = AFC   B.  MR = MC = ATC     C.  MR = MC > ATC     D.  MR = MC = AFC         Chapter 9 Question 1 Anything that prevents new firms from competing on an equal basis with existing firms in an industry is called a barrier to entry.     True     False         Which of the following is true of monopoly?       A.  The firm is a price taker.   B.  There are no close substitutes for the product being produced.     C.  The firm faces a horizontal demand curve.     D.  There are no barriers to entry.         A monopolist has complete control over both price and quantity of output.       True   False         The demand curve facing a single-price monopolist     A.  is the same as its average revenue curve     B.  is the same as the perfect competitor's demand curve     C.  is the same as its marginal revenue curve     D.  lies below its average revenue curve         For a monopolist, marginal revenue is       A.  equal to average revenue     B.  greater than price     C.  equal to price   D.  less than price Chapter 7 Question 1 Economic profit is defined as       A.  total revenue minus explicit costs   B.  total revenue minus implicit and explicit costs     C.  total revenue plus implicit costs     D.  total revenue minus implicit costs         A firm's opportunity costs of using resources provided by the firm's owners are called       A.  explicit costs   B.  implicit costs     C.  fixed costs     D.  sunk costs         Inputs that can be increased or decreased in the short run are called     A.  variable inputs     B.  fixed inputs     C.  economic inputs     D.  accounting inputs         The short run is a period of time       A.  during which all resources may be varied     B.  during which all resources are fixed   C.  during which at least one resource is fixed     D.  equal to or less than six months         The additional output obtained by adding another unit of labor to the production process is called       A.  the marginal cost of labor     B.  the average output of labor     C.  the marginal utility of labor   D.  the marginal product of labor         When diminishing marginal returns set in, TOTAL product       A.  decreases at an increasing rate     B.  increases at an increasing rate   C.  increases at a decreasing rate     D.  decreases at a decreasing rate         Total fixed cost divided by the level of output yields       A.  average variable cost     B.  marginal cost   C.  average fixed cost     D.  average total cost         The marginal cost curve intersects the minimum point of the average variable cost curve.     True     False         If marginal cost exceeds average variable cost,       A.  marginal cost is greater than average total cost     B.  average variable cost is decreasing     C.  average variable cost is negative   D.  average variable cost is increasing         Economies of scale occur where       A.  long-run average cost rises as one firm expands plant size     B.  long-run average cost falls as new firms enter the industry   C.  long-run average cost falls as one firm expands plant size     D.  short-run average cost falls as new firms enter the industry         Which of the following is NOT necessarily a characteristic of perfect competition?       A.  easy entry and exit in the long run     B.  a homogeneous product     C.  a large number of buyers and sellers   D.  low prices         Chapter 8 Question 2 If a perfectly competitive firm raises its price, its sales decrease to zero.     True     False         The demand curve for the output of a perfectly competitive firm is       A.  perfectly inelastic     B.  unit elastic   C.  perfectly elastic     D.  downward sloping         The total revenue curve of a perfectly competitive firm       A.  has a diminishing slope as output increases     B.  is horizontal     C.  is vertical   D.  has a constant slope as output increases         The golden rule of profit maximization states that ANY firm maximizes profit by producing where       A.  price equals marginal revenue     B.  price equals average revenue     C.  demand is unit elastic, and total revenue is greatest   D.  marginal revenue equals marginal cost         Chapter 8 Question 6 Which of the following is true at each level of output for a perfectly competitive firm?       A.  MC = AVC = ATC     B.  MR = AR = MC   C.  AR = MR = P     D.  MR = MC         Suppose a perfectly competitive firm's marginal revenue is $10 while its marginal cost is $11. Under these circumstances the firm       A.  needs to know the market price before it can determine whether it is maximizing profit   B.  is not maximizing profit and should decrease output     C.  is not maximizing profit and should increase output     D.  is maximizing profit and should not change output         Chapter 8 Question 8 If a perfectly competitive firm is incurring a short-run loss, it       A.  then will incur a long-run loss   B.  will continue to operate in the short run if its variable cost is covered     C.  will continue to operate in the short run if its fixed cost is covered     D.  will shut down         The short-run supply curve of a perfectly competitive firm is     A.  the part of its marginal cost curve rising above the average variable cost curve     B.  the part of its marginal cost curve below the average variable cost curve     C.  its average total cost curve     D.  its average fixed cost curve         Which of the following is true for a perfectly competitive firm in the long run?       A.  MC = ATC = AFC   B.  MR = MC = ATC     C.  MR = MC > ATC     D.  MR = MC = AFC         Chapter 9 Question 1 Anything that prevents new firms from competing on an equal basis with existing firms in an industry is called a barrier to entry.     True     False         Which of the following is true of monopoly?       A.  The firm is a price taker.   B.  There are no close substitutes for the product being produced.     C.  The firm faces a horizontal demand curve.     D.  There are no barriers to entry.         A monopolist has complete control over both price and quantity of output.       True   False         The demand curve facing a single-price monopolist     A.  is the same as its average revenue curve     B.  is the same as the perfect competitor's demand curve     C.  is the same as its marginal revenue curve     D.  lies below its average revenue curve         For a monopolist, marginal revenue is       A.  equal to average revenue     B.  greater than price     C.  equal to price   D.  less than price

For Full solution please contact us
24*7 Live chat with Experts