Suppose a firm is producing an output level for which price exceeds average total cost. From this information, which of the following can be deduced? 1. the firm is maximizing profits II.the firm is earning positive profits III. the firm is a price taker IV. the firm faces a downward sloping demand curve Select one: O a. II and III only. O b. ll only O c. ll and IV only O d. I and III only Oe. I and II only

Suppose a firm is producing an output level for which price exceeds average total cost. From this information, which of the following can be deduced? 1. the firm is maximizing profits II.the firm is earning positive profits III. the firm is a price taker IV. the firm faces a downward sloping demand curve Select one: O a. II and III only. O b. ll only O c. ll and IV only O d. I and III only Oe. I and II only

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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3.30 3.00 2.70 2:40 2.10 1.80 1,50 1.20 0.90 0.60 0.30 50 100 150 If price is $2.40, what is the output choice for the firm? O a. 200 O b. 250 O c. 150 O d. 300 200 250 300 Marginal Cost 350 Average Total Cost Average Variable Cost 400
Indicate whether you agree or disagree with the following statement. The marginal cost curve of any profit-maximizing firm is the firm's short-run supply curve. A. Disagree: The MC curve is the demand curve below minimum AVC. O B. Agree: The MC curve is the supply curve below minimum AVC. OC. Disagree: The MC curve is the demand curve above minimum AVC. D. Agree: The MC curve is the supply curve above minimum AVC. Ay quantity 7 units total cost is $194 and at quantity 8 units total cost is $208, what is the marginal cost at 8 unit? How you arrived to your solution? How you define marginal cost? 1 B I U S Ix Write your answer 1 B I U S Ix Write your answer = 글 EEI 1 At 5 units of production, if total variable cost is $75 and total fixed cost is $100, what is value of (a) total costs (b) average cost, (c) average variable cost and (d) average fixed costs? X₂ # 6 1 1 x² Insert Formula x₂ x²² Insert Formula
Sam's Club can sell identical items at a lower price than Macy's because of Sam's Club's: O government assistance. O lower average fixed costs. O higher variable costs. higher rent costs.
Perfect competition an efficient outcome because O A. achieves; total surplus is maximized O B. achieves; marginal benefit equals marginal cost OC. does not achieve; firms do not get to choose their price O D. does not achieve; firms produce goods with perfect substitutes O E. Both A and B are correct.
A firm will operate so long as the price O A. exceeds average variable cost. OB. equals the opportunity cost. O C. exceeds average fixed cost. O D. exceeds average total cost.
Which describes the firms supply curve for the short run with perfect competition? O The section of MC that is above AVC O The section of MC that is above ATC There is no supply curve since it depends on the slope of demand O The section of ATC to the right of its intersection with MC Which describes the long run equilibrium situation for a firm in perfect competition? O Demand is sloping downward and tangent to ATC Demand is horizontal and tangent to the bottom of ATC O Demand is tangent to AVC O There are positive economic profits to motivate firms to keep producing
What are the three conditions for a market to be perfectly competitive? For a market to be perfectly competitive, there must be O A. many buyers and a small number of firms that compete, selling identical products, and barriers to new firms entering the market. O B. many buyers and one seller, with the firm producing a product that has no close substitutes, and barriers to new firms entering the market. OC. many buyers and a few sellers, with all firms selling identical products, and no barriers to new firms entering the market. O D. many buyers and sellers, with all firms selling identical products, and no barriers to new firms entering the market. O E. many buyers and sellers, with firms selling similar but not identical products, with low barriers new firms entering the market.
Which of the following statements is correct? OA. Accounting profit is typically larger than economic profit. O B. Accounting profit equals the firm's revenues minus all of its costs, implicit and explicit. OC. Economic profit equals the firm's revenues minus its explicit costs O D. All of the above
In perfect competition, what is the relationship between the demand for the firm's output and the market demand? In a perfectly competitive market, the market demand is O A. perfectly elastic; perfectly elastic O B. shown by a downward-sloping curve; perfectly elastic O C. shown by a downward-sloping curve; shown by a downward-sloping curve O D. perfectly elastic; shown by a downward-sloping curve and the demand faced by the individual firm is C
Product Price = Quantity Sold = Explicit Costs Implicit Costs = = $30 5 units $42 $18 Referring to the above table, it can be concluded that: O Economic Costs are $24. O Economic Profit is $210. O Economic Loss is $30. O Economic Profit is $90.
4. The demand for an individual firm's output depends on the demand for the industry's output, the number of firms in the industry, and the structure of the industry. O a. True Ob. False
Economic profits may result from: O a. innovation b.risk taking Oc. exploiting market inefficiencies Od. all the above O e. a and b