Top hat exam 3

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Posted on

March 14th, 2023

question

The basic difference between the short run and the long run is the following:

answer

at least one resource is fixed in the short run, while all resources are variabke in the long run

question

Assume that in the short run a firm is producing 100 units of output, has average total costs of $200, and average variable costs of $150. The firm's total fixed costs are:

answer

$5,000

question

In the short run the sure screen t shirt company is producing 500 units of output. It's average variable costs are $2.00 and it's average fixed costs are $.50. The firms total costs:

answer

665

question

Marginal costs can be defined as the:

answer

Change in total variable cost resulting from one more unit of production

question

When firms have market power, it means that they:

answer

can noticeably affect the market price.

question

A profit maximizing firm in a competitive market is able to sell its product for $9. At its current level of output the firm's average total cost is $10. Its marginal cost curve crosses the marginal revenue curve at an output level of 10 units. What is the total loss of this firm?

answer

Exactly $10

question

Your friend Tom runs a widget factory (a perfectly competitive market), and he is concerned because profits seem low. He tells you that he is producing where:
1) P=MR=MC
2) P=ATC
3) P>AVC
What can you tell him about his business?

answer

He is earning 0 economic profit, but he is earning normal profit, do not exit

question

Which of the following statements best reflects the production decision of a profit maximizing firm in a competitive market when price falls below the minimum of average variable cost?

answer

The firm will immediately stop production to minimize its losses.

question

Which of the following describes the long run supply curve for a constant cost industry?

answer

...

question

A firm maximizes its revenue when ..., and its profits when ...

answer

MR is 0, MR intersects MC

question

If a pure monopolist is producing at that output where P=ATC, then

answer

its economic profits will be zero.

1 of 11

question

The basic difference between the short run and the long run is the following:

answer

at least one resource is fixed in the short run, while all resources are variabke in the long run

question

Assume that in the short run a firm is producing 100 units of output, has average total costs of $200, and average variable costs of $150. The firm's total fixed costs are:

answer

$5,000

question

In the short run the sure screen t shirt company is producing 500 units of output. It's average variable costs are $2.00 and it's average fixed costs are $.50. The firms total costs:

answer

665

question

Marginal costs can be defined as the:

answer

Change in total variable cost resulting from one more unit of production

question

When firms have market power, it means that they:

answer

can noticeably affect the market price.

question

answer

Exactly $10

question

answer

He is earning 0 economic profit, but he is earning normal profit, do not exit

question

Which of the following statements best reflects the production decision of a profit maximizing firm in a competitive market when price falls below the minimum of average variable cost?

answer

The firm will immediately stop production to minimize its losses.

question

Which of the following describes the long run supply curve for a constant cost industry?

answer

...

question

A firm maximizes its revenue when ..., and its profits when ...

answer

MR is 0, MR intersects MC

question

If a pure monopolist is producing at that output where P=ATC, then

answer

its economic profits will be zero.

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