Filters
Question type
Study Flashcards

Suppose there are economies of scale in the production of a specialized memory chip that is used in manufacturing microwaves.This suggests that the microwave industry is a decreasing-cost industry.

A) True
B) False

Correct Answer

verifed

verified

Figure 9-12 Figure 9-12 -Use the figure above to answer the following questions. a.How can you determine that the figure represents a graph of a perfectly competitive firm? Be specific;indicate which curve gives you the information and how you use this information to arrive at your conclusion. b.What is the market price? c.What is the profit-maximizing output? d.What is total revenue at the profit-maximizing output? e.What is the total cost at the profit-maximizing output? f.What is the profit or loss at the profit-maximizing output? g.What is the firm's total fixed cost? h.What is the total variable cost? i.Identify the firm's short-run supply curve. j.Is the industry in a long-run equilibrium? k.If it is not in long-run equilibrium,what will happen in this industry to restore long-run equilibrium? l.In long-run equilibrium,what is the firm's profit maximizing quantity? -Use the figure above to answer the following questions. a.How can you determine that the figure represents a graph of a perfectly competitive firm? Be specific;indicate which curve gives you the information and how you use this information to arrive at your conclusion. b.What is the market price? c.What is the profit-maximizing output? d.What is total revenue at the profit-maximizing output? e.What is the total cost at the profit-maximizing output? f.What is the profit or loss at the profit-maximizing output? g.What is the firm's total fixed cost? h.What is the total variable cost? i.Identify the firm's short-run supply curve. j.Is the industry in a long-run equilibrium? k.If it is not in long-run equilibrium,what will happen in this industry to restore long-run equilibrium? l.In long-run equilibrium,what is the firm's profit maximizing quantity?

Correct Answer

verifed

verified

a.The perfectly competitive firm is a pr...

View Answer

Figure 9-1 Figure 9-1 -Refer to Figure 9-1.If the firm is producing 700 units, A) it is making a profit. B) it is making a loss. C) it should cut back its output to maximize profit. D) it should increase its output to maximize profit. -Refer to Figure 9-1.If the firm is producing 700 units,


A) it is making a profit.
B) it is making a loss.
C) it should cut back its output to maximize profit.
D) it should increase its output to maximize profit.

E) B) and D)
F) A) and B)

Correct Answer

verifed

verified

Which of the following statements is correct?


A) Economic profit takes into account all costs involved in producing a product.
B) Accounting profit is not relevant in preparing the firm's financial statement.
C) Economic profit always exceeds accounting profit.
D) Accounting profit is the same as economic profit.

E) A) and D)
F) A) and B)

Correct Answer

verifed

verified

Table 9-1 Table 9-1 Table 9-1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases.Assume that output can only be increased in batches of 100 units. -Refer to Table 9-1.Suppose the fixed cost of production rises by $500 and the price per unit is still $8.What happens to the firm's profit-maximizing output level? A) It must fall. B) It must rise to offset the increased cost. C) It will remain the same. D) The firm will shut down. Table 9-1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases.Assume that output can only be increased in batches of 100 units. -Refer to Table 9-1.Suppose the fixed cost of production rises by $500 and the price per unit is still $8.What happens to the firm's profit-maximizing output level?


A) It must fall.
B) It must rise to offset the increased cost.
C) It will remain the same.
D) The firm will shut down.

E) A) and B)
F) None of the above

Correct Answer

verifed

verified

In early 2007,Pioneer and JVC,two Japanese electronics firms,each announced that their profits were going to be lower than expected because they both had to cut prices for LCD and plasma television sets.Which of the following could explain why these firms did not simply raise their prices and increase their profits?


A) The move to cut prices is probably just a temporary one to gain market share.In the long run the firms will raise prices and be able to increase their profits.
B) Most likely,intense competition between these two major producers probably pushed prices down.Thereafter,each feared that it would lose its customers to the other if it raised its prices.
C) In perfect competition,prices are determined by the market and firms will keep lowering prices until there are no profits to be earned.
D) The firms are still making profits,just not as high as expected so there is room to lower prices until one can force the other out of business.

E) None of the above
F) All of the above

Correct Answer

verifed

verified

Figure 9-13 Figure 9-13 -Refer to Figure 9-13.If the market price is P<sub>1</sub>,what is the allocatively efficient output level? A) Q<sub>0</sub> B) Q<sub>1</sub> C) Q<sub>2</sub> D) There is no allocatively efficient output level because the firm is making a loss. -Refer to Figure 9-13.If the market price is P1,what is the allocatively efficient output level?


A) Q0
B) Q1
C) Q2
D) There is no allocatively efficient output level because the firm is making a loss.

E) B) and D)
F) All of the above

Correct Answer

verifed

verified

Assuming a market price of $4,fill in the columns in the following table.What is the profit-maximizing level of production? What are the two ways to determine the profit-maximizing level of production? Assuming a market price of $4,fill in the columns in the following table.What is the profit-maximizing level of production? What are the two ways to determine the profit-maximizing level of production?

Correct Answer

verifed

verified

blured image The profit-maximizing level of producti...

View Answer

Which of the following is not a characteristic of a perfectly competitive market structure?


A) There are a very large number of firms that are small compared to the market.
B) All firms sell identical products.
C) There are no restrictions to entry by new firms.
D) There are restrictions on exit of firms.

E) None of the above
F) C) and D)

Correct Answer

verifed

verified

Figure 9-6 Figure 9-6 Figure 9-6 shows cost and demand curves facing a profit-maximizing,perfectly competitive firm. -Refer to Figure 9-6.At price P<sub>3</sub>,the firm would A) lose an amount equal to its fixed cost. B) lose an amount more than fixed cost. C) lose an amount less than fixed cost. D) break even. Figure 9-6 shows cost and demand curves facing a profit-maximizing,perfectly competitive firm. -Refer to Figure 9-6.At price P3,the firm would


A) lose an amount equal to its fixed cost.
B) lose an amount more than fixed cost.
C) lose an amount less than fixed cost.
D) break even.

E) A) and B)
F) None of the above

Correct Answer

verifed

verified

Table 9-1 Table 9-1 Table 9-1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases.Assume that output can only be increased in batches of 100 units. -Refer to Table 9-1.The firm will not produce in the short run if the output price falls below A) $8. B) $4. C) $3.20. D) $2.80. Table 9-1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases.Assume that output can only be increased in batches of 100 units. -Refer to Table 9-1.The firm will not produce in the short run if the output price falls below


A) $8.
B) $4.
C) $3.20.
D) $2.80.

E) C) and D)
F) A) and D)

Correct Answer

verifed

verified

Which of the following is the best example of a perfectly competitive industry?


A) wheat production
B) steel production
C) electricity production
D) airplane production

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

Which of the following is not a characteristic of a monopolistically competitive market structure?


A) There is a large number of independently acting small sellers.
B) All sellers sell products that are differentiated.
C) There are low barriers to entry of new firms.
D) Each firm must react to actions of other firms.

E) A) and D)
F) None of the above

Correct Answer

verifed

verified

Showing 141 - 153 of 153

Related Exams

Exam 1

Economics: Foundations and Models

145 Questions

Exam 2

Trade-Offs, comparative Advantage, and the Market System

151 Questions

Exam 3

Where Prices Come From: the Interaction of Demand and Supply

149 Questions

Exam 4

Market Efficiency and Market Failure

171 Questions

Exam 5

The Economics of Health Care

117 Questions

Exam 6

Firms, the Stock Market, and Corporate Governance

126 Questions

Exam 7

Consumer Choice and Elasticity

193 Questions

Exam 8

Technology,production,and Costs

147 Questions

Exam 10

Monopoly and Antitrust Policy

148 Questions

Exam 11

Monopolistic Competition and Oligopoly

200 Questions

Exam 12

GDP: Measuring Total Production and Income

135 Questions

Exam 13

Unemployment and Inflation

148 Questions

Exam 14

Economic Growth, the Financial System, and Business Cycles

130 Questions

Exam 15

Aggregate Demand and Aggregate Supply Analysis

145 Questions

Exam 16

Money, banks, and the Federal Reserve System

144 Questions

Exam 17

Monetary Policy

145 Questions

Exam 18

Fiscal Policy

143 Questions

Exam 19

Comparative Advantage,international Trade,and Exchange Rates

158 Questions

Show Answer