Economics and Correct Answer

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A monopoly will usually produce Answer Selected Answer: where its demand curve is elastic. Correct Answer: where its demand curve is elastic. Question 2 10 out of 10 points Suppose a firm is currently maximizing its profits (i. e. , following the MR=MC rule). Assuming that it wants to continue maximizing its profits, if its fixed costs increase, it should Answer Selected Answer: maintain the same price. Correct Answer: maintain the same price. Question 3 10 out of 10 points A firm that seeks to maximize its revenue is most likely to adhere to which of the following? Answer Selected Answer: MR =0 Correct Answer: MR =0 Question 4 10 out of 10 points Assume a perfectly competitive firm’s short-run cost is TC = 100 + 160Q + 3Q2. If the market price is $196, what should it do? Answer Selected Answer: produce 6 units and continue operating Correct Answer: produce 6 units and continue operating Question 5 10 out of 10 points When a firm has the power to establish its price, Answer Selected Answer: P ; MR. Correct Answer: P ; MR. Question 6 10 out of 10 points Which of the following characteristics is most important in differentiating between perfect competition and all other types of markets? Answer Selected Answer: whether or not firms are price takers Correct Answer: whether or not firms are price takers Question 7 10 out of 10 points In economic analysis, any amount of profit earned above zero is considered “above normal” because Answer Selected Answer: this would indicate that the firm’s revenue exceeded both its accounting and opportunity cost. Correct Answer: this would indicate that the firm’s revenue exceeded both its accounting and opportunity cost. Question 8 10 out of 10 points A perfectly competitive firm sells 15 units of output at the going market price of $10. Suppose its average cost is $15 and its average variable cost is $8. Its contribution margin (i. e. , contribution to fixed cost) is Answer Selected Answer: $30. Correct Answer: $30. Question 9 10 out of 10 points Which of the following is true for a monopoly? Answer Selected Answer: P ; MR Correct Answer: P ; MR Question 10 10 out of 10 points Which of the following products is the best example of perfect competition? Answer Selected Answer: apples Correct Answer: apples 2010/1/26 Linh DoQuy Workmail ;linhdoquy@gmail. com; Question 1 10 out of 10 points Which of the following conditions would definitely cause a perfectly competitive company to shut down in the short run? Answer Selected Answer: P ; AVC Correct Answer: P ; AVC Question 2 10 out of 10 points Which of the following products is the best example of perfect competition? Answer Selected Answer: apples Correct Answer: apples Question 3 10 out of 10 points Which of the following is true for a monopoly? Answer Selected Answer: P ; MR Correct Answer: P ; MR Question 4 10 out of 10 points When a firm produces at the point where MR = MC, the profit that it is earning is considered to be Answer Selected Answer: Not enough information is provided. Correct Answer: Not enough information is provided. Question 5 10 out of 10 points Assume a profit maximizing firm’s short-run cost is TC = 700 + 60Q. If its demand curve is P = 300 – 15Q, what should it do in the short run? Answer Selected Answer: continue operating because it is earning an economic profit Correct Answer: continue operating because it is earning an economic profit Question 6 10 out of 10 points A perfectly competitive firm sells 15 units of output at the going market price of $10. Suppose its average cost is $15 and its average variable cost is $8. Its contribution margin (i. e. , contribution to fixed cost) is Answer Selected Answer: $30. Correct Answer: $30. Question 7 10 out of 10 points Which of the following is not characteristic of perfect competition? Answer Selected Answer: a differentiated product Correct Answer: a differentiated product Question 8 10 out of 10 points If a perfectly competitive firm incurs an economic loss, it should Answer Selected Answer: shut down if this loss exceeds fixed cost. Correct Answer: shut down if this loss exceeds fixed cost. Question 9 10 out of 10 points At the point at which P=MC, suppose that a perfectly competitive firm’s MC = $100, its AVC = $80 and its AC = $110. This firm should Answer Selected Answer: continue operating in the short run. Correct Answer: continue operating in the short run. Question 10 10 out of 10 points When MR = MC, Answer Selected Answer: total profit is maximized. Correct Answer: total profit is maximized.

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