Microeconomics Exam 5

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Economics

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Feb 20, 2024

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Which of the following should typically be ignored because spending has already been made and cannot be changed? sunk costs If a comparison between average cost and price reveals whether a firm is earning profits, then a comparison between average variable cost and price reveals whether the firm is earning profit if fixed costs are left out of the calculation. The graph above illustrates the electricity market. Consider market competition between firms where price is based on AR and select the most appropriate answer. in the long-run, the demand curve and average revenue shift as other firms enter the market and increase competition Fixed costs are important because, at least in the ___________, the firm _______________. short run; cannot alter them In order to determine the average variable cost, the firm's variable costs are divided by _______________________. the quantity of output The marginal cost curve is generally ______________, because diminishing marginal returns implies that additional units are ________________________. B. upward-sloping; more costly to produce Economies of scale may arise from all but one of the following. Which one is it? government economic subsidies protect firms from competition to avoid losses.

_____________ is calculated by taking the quantity of everything that is sold and multiplying it by the sale price. total revenue` Refer to the graph shown above. Based on the information illustrated in the graph, which of the following is correct? producing a marginal unit is increasing average costs overall Refer to the table below. If this information were used to create a total cost graph, the curve should reflect all of the above. A situation where the level of output, scale and average costs are all rising is called both a and b are correct If a solar panel manufacturer wants to look at its total costs of production in the short run, which of the following would provide a useful starting point? divide total costs into two categories: fixed costs that can't be changed in the short run and variable costs that can be According to the definition of profit, if a profit-maximizing firm will always attempt to produce its desired level of output at the lowest possible cost, then it will do so regardless of what type of competition exists in a market.

The ______________ of all firms can be broken down into some common underlying patterns. cost structure In order to determine ____________, the firm's total costs must be divided by the quantity of its output. average cost We have an expert-written solution to this problem! Marcella operates a small, but very successful art gallery. All but one of the following can be classified as a variable cost arising from the physical inputs Marcella requires to operate her business. Which is it? physical space for the gallery Approximately what percentage of the US labor force is employed by firms that have fewer than 100 employees? ` 35% In economics, a firm that faces no competitors is referred to as _________________. monopoly We have an expert-written solution to this problem! ______________ include all of the costs of production that increase with the quantity produced.

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Variable costs We have an expert-written solution to this problem! A firm's ___________ consist of expenditures that must be made before production starts that typically, over the short run, _______________ regardless of the level of production. fixed costs; do not change,

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