Homework 4
Due Date: Nov-15/16-2018
I. Multiple Choice Questions
1. A fixed cost is:
A) the cost of any input who per-unit price has been fixed, whether by long-term
contract or by some similar means.
抹多音字B) a cost who increas are exactly proportional to increas in output.
C) any component included in average cost which enters in AC as the same fixed per-
unit amount, no matter what the level of plant output may be.
D) a cost which the firm would incur even if its output were zero.
E) none of the above.
2. A firm's MC curve:
A) is esntially its TC curve scaled for its fractional share of the market
B) shows the addition to total cost needed to produce each additional unit of output.
C) is its unit cost of output, TC/q.
D) is approximately equal to all the above.
E) is defined by none of the above.
3. Which of the following is true at the quantity of output where average cost has reached its minimum level?
A) AVC = FC.
B) MC = AVC.
C) MC = AC.
D) AC = AFC.
E) Output price = AVC.
4. Which of the following is true if marginal cost is above average variable cost as output ris?
A) Average total cost must be falling.
B) Average fixed cost must be rising.
C) Average variable cost must be falling.
D) Average variable cost must be rising.
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E) None of the above.
5. Diminishing returns to factors of production cau:
A) diminishing opportunity costs.
B) the ratio of fixed costs to total costs to increa.
C) average fixed costs to decrea.
D) marginal costs to ri.
E) none of the above.
6. If output ris and total costs remain fixed, then:
A) average cost will fall.
B) average cost will ri.
C) average cost will eventually increa.
D) fixed cost will eventually ri.
E) variable cost will eventually become fixed at some maximum level.
7. If the total cost of producing 6 units is $48 and the marginal cost of the venth unit is $15, then:
A) the average total cost of 7 units is $9.
B) the average variable cost of 7 units is $9.
C) fixed costs are $8.
D) fixed costs are $33.
E) none of the above are true.
U the following to answer questions 8-9:
8. In the figure above, what is AVC at Q = 5?
A) 9
B) 10
的味道作文C) 12
D) 17.5
E) None of the above.
9. In the figure above, what are total fixed costs at Q = 2?
A) 5
B) 10
C) 13.75
D) 15
E) None of the above.
10. Profit maximization requires a firm to do which of the following:
A) manage internal operations efficiently.
B) prevent waste.
C) encourage worker morale.
D) choo efficient production process.
E) all of the above.
11. The long-run supply curve of an individual firm in perfect competition is the same thing as:
A) the rising gment of its marginal cost curve, above average cost.
B) the rising gment of its average cost curve.
C) its entire average cost curve.
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D) that entire part of its total cost curve in which total cost ris or remains constant as output increas.1990年属马五行属什么
E) none of the above.
12. If you are a wheat farmer and you want to earn as much profit as you can, you should do which of the following:
A) try to produce and ll that quantity of output at which marginal cost has rin to
甘晖equality with price.
B) try to produce and ll that quantity of output at which marginal cost is equal to
average variable cost.
C) try to produce and ll that quantity of output at which marginal cost has reached its
minimum possible level.
D) never let marginal cost reach equality with price, since this is the point at which
profits become zero.
E) keep marginal cost above price.
13. Which panel in the figure below most accurately indicates by q* the level of output which a single supplier in a perfectly competitive industry will produce, given it produces a positive amount?
14. Which of the following statements is correct in reference to the figure below?
A) B is the shutdown point.
B) B is the profit-maximizing point.
C) C is the zero-profit point.
D) A is the shutdown point.
E) C is the shutdown point.
15. The zero-profit point for a perfectly competitive firm occurs where the price equals the minimum point of the:
A) AVC curve.
B) AC curve.
C) MC curve.
D) AFC curve.
E) none of the above.
16. "I'm losing money, but with my investment in equipment I can't afford to shut down at this time." If this entrepreneur is attempting to maximize profits, his behavior is:
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A) rational if the firm is covering its variable costs.
B) rational if the firm is covering its fixed costs.
C) irrational since plant closing is necessary to eliminate loss.
D) irrational since fixed costs are eliminated if a firm shuts down.
E) none of the above.
17. An individual firm in a perfectly competitive industry faces a demand curve which is:
A) downward sloping.
B) relatively inelastic.
C) perfectly elastic.
D) specific to each firm.
E) upward sloping.
18. Suppo that all the firms in a given market can be characterized by the cost structure illustrated in the figure on the left. If market demand is as indicated in the
figure on the right, the number of firms required to support long run equilibrium is:
A) 90.
B) 100.
C) 110.
D) 120.
E) some number greater than 50 that cannot be determined with the information
provided.
19. If, in long run equilibrium, the competitive price of some good is $16.67, then, for each and every firm in the industry,
A) marginal cost > average cost = $16.67.
B) marginal cost < average cost = $16.67.
C) $16.67 = marginal cost = average cost.
D) $16.67 = marginal cost > average cost.
E) $16.67 = marginal cost < average cost.
20. If prices fall in a perfectly competitive industry, then the firms in that industry will in the short run:
A) not decrea in number unless price falls below ATC for some firms.
B) try to reduce production or shut down.
德语难学吗C) keep output at the same level but make loss.
D) adverti.
E) both A and B.
21. Pareto efficiency occurs:
A) when no possible reorganization of production or distribution can make anyone
better off without making someone el wor off.
B) when everyone gets a fair share of the goods produced.
C) when reorganizing the production makes everyone better off.
D) when I am better off and everyone el stays the same.
E) none of the above.
22. The zero-profit price for a firm in perfect competition:
A) is a price just sufficient to cover fixed cost.
B) is at the point where total revenue from sales is at its minimum level.
