Author: R7AL -

Question 11 pts
In a competitive market, which of the following is necessary for firms to make a profit?
Group of answer choices

Price greater than marginal cost.

Price greater than average cost.

Price greater than total cost.

Price greater than fixed cost.
 
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Question 21 pts
What is marginal cost?
Group of answer choices

The change in total cost from producing one more unit of output.

Average cost times output.

The change in total output divided by the change in total cost.

Total cost divided by the change in total output.
 
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Question 31 pts
The marginal revenue (MR) of each unit for a firm is a constant $63, and the firm's marginal cost (MC) is given by MC = 3Q (where Q is quantity of output). What is the firm's profit-maximizing level of output?
Group of answer choices

21

15

30

189
 
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Question 41 pts
What is the marginal cost of producing the seventh barrel of oil?
Barrels of Oil Produced | Total Revenue | Total Cost | Price
1 | $30 | $4 | $30
2 | $60 | $10 | $30
3 | $90 | $17 | $30
4 | $120 | $30 | $30
5 | $150 | $55 | $30
6 | $180 | $75 | $30
7 | $210 | $110 | $30
8 | $240 | $145 | $30
9 | $270 | $203 | $30
10 | $300 | $304 | $30
Group of answer choices

30

85

35

15
 
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Question 51 pts
What is the marginal revenue of producing the fifth barrel of oil?
Barrels of Oil Produced | Total Revenue | Total Cost | Price
1 | $30 | $4 | $30
2 | $60 | $10 | $30
3 | $90 | $17 | $30
4 | $120 | $30 | $30
5 | $150 | $55 | $30
6 | $180 | $75 | $30
7 | $210 | $110 | $30
8 | $240 | $145 | $30
9 | $270 | $203 | $30
10 | $300 | $304 | $30
Group of answer choices

50

150

200

30
 
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Question 61 pts
How many barrels of oil should the company produce to maximize profit?
Barrels of Oil Produced | Total Revenue | Total Cost | Price
1 | $30 | $4 | $30
2 | $60 | $10 | $30
3 | $90 | $17 | $30
4 | $120 | $30 | $30
5 | $150 | $55 | $30
6 | $180 | $75 | $30
7 | $210 | $110 | $30
8 | $240 | $145 | $30
9 | $270 | $203 | $30
10 | $300 | $304 | $30
Group of answer choices

7

9

6

8
 
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Question 71 pts
What is the maximum profit available to the company?
 
Barrels of Oil Produced | Total Revenue | Total Cost | Price
1 | $30 | $4 | $30
2 | $60 | $10 | $30
3 | $90 | $17 | $30
4 | $120 | $30 | $30
5 | $150 | $55 | $30
6 | $180 | $75 | $30
7 | $210 | $110 | $30
8 | $240 | $145 | $30
9 | $270 | $203 | $30
10 | $300 | $304 | $30
 
Group of answer choices

$260

$152

$140

$105
 
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Question 81 pts
Consider the market for canned pineapple. What is the optimal number of cans of pineapple for this firm to produce?

Group of answer choices

160,000

100,000

20,000

120,000
 
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Question 91 pts
Consider the market for canned pineapples. At the profit-maximizing level of output in this diagram, the firm's total revenue and total cost are ______ and ______, respectively.

Group of answer choices

$7; $7

$840,000; $480,000

$700,000; $400,000

$480,000; $840,000
 
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Question 101 pts
Consider the market for canned pineapple. What is the total profit or loss if the company produces 120 thousand cans?

Group of answer choices

–$200,000

–$400,000

$840,000

360,000
 
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Question 111 pts
Which of the following is the correct order of events following an increase in demand in a constant cost industry where price equals average cost and both are equal to $20?
Group of answer choices

P = AC, firms make no economic profit, existing firms leave production unchanged, new firms enter the industry, profits remain normal, P = AC = $20

P > AC, firms make an economic profit, existing firms increase production, new firms enter, the short-run supply curve shifts right, and price falls until profits return to $0

P < AC, firms suffer an economic loss, existing firms decrease production, new firms enter the industry, the short-run supply curve shifts right, price falls until profits exceed $0

P > AC, firms make an economic profit, existing firms increase production, new firms enter the industry, the short-run supply curve shifts left, price falls until profits return to $0
 
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Question 121 pts
This figure is the market for books from a local store.  The company earns zero profits at a price of:

Group of answer choices

$9 or less

$3

$5

$4 or less
 
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Question 131 pts
This figure is the market for books from a local store. At a price of $8 per book, profit per book is approximately ______, and total profit is approximately ______.

Group of answer choices

$8.00; $114

$5.50; $78

$5.00; $60

$2.50; $36
 
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Question 141 pts
A farmer owns two cornfields: Field 1 and Field 2. If the market price of bushel of corn is $15 per bushel, how many bushels of corn get produced?
Field 1 | | Field 2 |
Quantity (Bushels) | Marginal Cost | Quantity (Bushels) | Marginal Cost
1 | 5 | 1 | 7
2 | 10 | 2 | 9
3 | 15 | 3 | 11
4 | 20 | 4 | 13
5 | 25 | 5 | 15
6 | 30 | 6 | 17
7 | 35 | 7 | 19
Group of answer choices

8

6

10

21
 
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Question 152 pts
Assume that price equals marginal cost. Compare industry conditions that encourage firms to enter a market, versus the conditions that encourage firms to exit. Which of the following options represents the respective conditions correctly (firms will enter; firms will exit)?
Group of answer choices

P > MC; P = MC

P = MC; P = AC

P = MC; P > AC

P > AC; P < AC
 
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Question 161 pts
What conditions make the demand curve for each firm's output perfectly elastic?
Group of answer choices

Firms are price takers so no firm can charge more than others or consumers wouldn't buy from them. 

There are many sellers for consumers to buy from so the seller's can't cheat and all agree to sell for a higher price.

Products are identical across firms so consumers can easily switch which firm they buy from based on price.

All the answers are correct.
 
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Question 171 pts
Which of the following best illustrates the elimination principle?
Group of answer choices

Uber drivers are fired unless they maintain a 5 star rating.

As competitors like Lyft enter the market, the initial above-normal profits of Uber reduce.

Well rated drivers drive for both Uber and Lyft because demand is so high.

With greater competition Uber has lower than normal profits, but continues to operate to try to maintain market share and earn higher profits later.
 
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Question 181 pts
What do high profits in an industry indicate?
Group of answer choices

More resources should move to the high profit industries because the marginal value of resources is high.

Firms are using high-value inputs to create low-value outputs.

That industry is using too many resources and more resources should be spent on other industries

The industry must be underpaying for the marginal value of resources.
 
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Question 191 pts
Which of the following is an example of resources finding a higher value use in a competitive market?
Group of answer choices

Firms will always be able to recognize high- and low- value industries simply by looking at the costs of production in existing firms. 

Entrepreneurs with new knowledge take resources like plastic bottles from low profit industries (like bottled water) to high profit industries (like high end sustainable clothing).

The invisible hand will always make prices equal in the long run. 

Entrepreneurs will always enter the market with the highest salary available. 
 
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Question 201 pts
It is difficult for central planners like the federal government to know every firm's marginal costs, although every individual firm knows their own marginal costs. Given this, how do central planners perform compared to competitive markets?
Group of answer choices

Competitive markets can more quickly respond to changes in marginal cost than central planners.

Central planners perform better than competitive markets because they consider changes on the entire market rather than within firms.

Central planners and competitive markets perform about the same if the government takes enough surveys.

It is impossible to say because it depends on the market.
 
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Question 211 pts
The following are marginal cost curves for selling chicken in a mom-and-pop (MC_M) store and in a big-box retailer (MC_B).
MC_M = 3 + 4Q_M
MC_B = 5 + 2Q_B
If the price of a chicken is $15, how many chickens does each store supply?
Group of answer choices

mom-and-pop: 3; big-box: 5

mom-and-pop: 5; big-box: 8

mom-and-pop: 63; big-box: 35

mom-and-pop: 4; big-box: 4
 
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Question 221 pts
The following are marginal cost curves for selling chicken in a mom-and-pop (MC_M) store and in a big-box retailer (MC_B).
MC_M = 3 + 4Q_M
MC_B = 5 + 2Q_B
If there are 4 total chickens being sold, how many chickens does each firm sell?
Group of answer choices

mom-and-pop store sells 1; big-box retailer sells 3.

mom-and-pop store sells 2; big-box retailer sells 2.

mom-and-pop store sells 3; big-box retailer sells 1.

mom-and-pop store sells 0; big-box retailer sells 4.
 
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Question 231 pts
Which of the following statements is TRUE?
Group of answer choices

It is rational for a business to operate at a loss in a competitive market.

When a market is competitive, new firms enter to drive down above-normal profits.

No one can earn above-normal profits in a competitive marketplace.

The most profitable firms are those which have the lowest opportunity cost.
 
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Question 241 pts
This figure illustrates a market for deli sandwiches with two companies both producing sandwiches.  What is the industry quantity supplied at a price of $7? At a price of $9?

Group of answer choices

8 and 10 units, respectively

4 and 5 units, respectively

4 and 10 units, respectively

0 and 5 units, respectively