012. When a firm is maximizing profit it will necessarily be:A) maximizing profit per unit of output.B) maximizing the difference between total revenue and total cost.C) minimizing total cost.D) maximizing total revenue.S₁₁SQ&Refer to the above diagram in which S is the market supply curve and St is a supply curvecomprising all costs of production, including external costs. Assume that the number of peopleaffected by these external costs is large. Without government interference, this market will resultin:A) an optimal allocation of society's resources.B) an underallocation of resources to this product.C) an overallocation of resources to this product.D) a higher price than is consistent with an optimal allocation of resources.14. Refer to the above diagram in which S is the market supply curve and St is a supply curvecomprising all costs of production, including external costs. Assume that the number of peopleaffected by these external costs is large. If the government wishes to establish an optimalallocation of resources in this market, it should:A) not intervene because the market outcome is optimal.B) subsidize consumers so that the market demand curve shifts leftward.C) subsidize producers so that the market supply curve shifts leftward (upward).D) tax producers so that the market supply curve shifts leftward (upward).15. Which of the following is an example of a public good?A) a weather warning system B) a television set C) a sofa D) a bottle of soda16. Because of the free-rider problem:A) the market demand for a public good is overstated.B) the market demand for a public good is nonexistent or understated.C) government has increasingly yielded to the private sector in producing public goods.D) public goods often create moral hazard and adverse selection problems. 17variable and the proportional change in costs is less than the change in output.A)Economies of scale C)Diseconomies of scale D)Principal-agent problemOligopolyB)18. If a manufacturing firm temporarily ceases production, its:A) average variable cost will equal its total fixed cost.B) total cost will equal zero.C) total fixed cost will equal zero.D) total cost will equal its total fixed cost.19. If a firm is uninformed about the qualities of a product, then the market will result in:A) an optimal allocation of society's resources.B) an underallocation of resources to this product.C) an overallocation of resources to this product.D) a higher price than is consistent with an optimal allocation of resources.20. For a given quantity produced, the relationship between LAC and SAC is which of thefollowing:A)B)A)B)C)D)SAC is always below or equal LAC. C)LAC is always below or equal SAC.D)exist(s) when all inputs areSAC=LAC.none of the above.21. The production of agricultural products such as wheat or corn would best be described bywhich market model?A) Monopolistic competition B) Perfect competition C) Monopoly D) Oligopoly22. Which of the following is an example moral hazard?A)A consumer buys a defective good because she does not know the quality of the good.B)A sports agent invests money for a client, for which the agent would make a higher commission ifthe company does well and the company he invests in goes bust.C)A worker shirks off while his boss is on vacation.A company continues to produce despite losses because of fixed costs.D)24. An uninformed consumer will buyinformed consumer.A) more; lower.C) less; lower.23 The main difference between the short run and the long run is that:firms earn zero profits in the long run.the long run always refers to a time period of one year or longer.in the short run, one or more inputs is fixed.in the long run, only one variable can be fixed.and pay a price that isB) more; higher.B) less; higher.than an

Microeconomics refers to the branch of economics that studies the behavior of a single person or individual and firms in making decisions regarding the distribution of scarce resources and the interactions among these individuals and businesses.The difference between total revenue and the total cost is Profit. Since the firm is maximizing profit thus, it would be necessarily maximizing the difference between total revenue and total cost. Total Revenue is the total amount received by selling all the units of output. Total cost is the amount of money incurred in the production of goods and services. therefore Option "b" is correctSince you have posted multiple questions, as per the guidelines we can solve only one question per session, please repost the remaining question. thankyou!!

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12. When a firm is maximizing profit it will necessarily be: A) maximizing profit per unit of output. B) maximizing the difference between total revenue and total cost. C) minimizing total cost. D) maximizing total revenue.

12. When a firm is maximizing profit it will necessarily be: A) maximizing profit per unit of output. B) maximizing the difference between total revenue and total cost. C) minimizing total cost. D) maximizing total revenue.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If a firm's marginal revenue is below its marginal cost, an increase in production will usually: a. increase profits b. leave profits unchanged c. decrease profits d. increase marginal revenue
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True or False