 |
| 1 | |
Refer to the figure above when answering this question. What is the value of the break-even price? |
| | A) | $10 |
| | B) | $20 |
| | C) | $40 |
| | D) | $50 |
|
|
|
| 2 | |
Refer to the figure above when answering this question. What is the value of the shutdown price? |
| | A) | $0 |
| | B) | $10 |
| | C) | $20 |
| | D) | $40 |
| | E) | Cannot be determined from the information |
|
|
|
| 3 | |
Refer to the figure above when answering this question. If the price of the product is $70, what is the profit-maximizing output, and what is the amount of economic profits? |
| | A) | 7 and zero |
| | B) | 7 and $10 |
| | C) | 7 and $70 |
| | D) | 9 and $180 |
| | E) | 11 and zero |
|
|
|
| 4 | |
What action should a perfectly competitive firm take if, at its present output, MC is equal to price, is increasing and is less than the average variable cost? |
| | A) | It should shut down |
| | B) | It should increase its output |
| | C) | It should decrease its output |
| | D) | It should increase its price |
|
|
|
| 5 | |
What action should a perfectly competitive firm take if, at its present output, MC is both increasing and is greater than the price, and the price is greater than the average variable cost? |
| | A) | It should shut down |
| | B) | It should increase its output |
| | C) | It should decrease its output |
| | D) | It should increase the price |
|
|
|
| 6 | |
What long-run effect will a decrease in market demand have on a constant-cost industry? |
| | A) | The price will stay the same, and the numer of firms in the industry will increase |
| | B) | The price will stay the same, and the number of firms in the industry will decrease. |
| | C) | The price will decrease, and the number of firms in the industry will decrease. |
| | D) | The price will decrease, and the number of firms in the industry will decrease. |
|
|
|
| 7 | |
What long-rim effect will a decrease in market demand have on a decreasing-cost industry? |
| | A) | The price will increase, and the number of firms in the industry will increase. |
| | B) | The price will increase, and the number of firms in the industry will decrease |
| | C) | The price will decrease, and the number of firms in the industry will increase |
| | D) | The price will decrease, and the number of firms in the industry will decrease. |
|
|
.