Question 1

Suppose a firm is collecting $1,999 in total revenues and the total cost of its fixed factors of production falls from $500 to $400.One can speculate that the firm will:

Accepted Answer

A)   expand output.
B)   lower price.
C)   earn greater profits or smaller losses.
D)   contract output.

Question 2

John is trying to decide how to divide his time between his job as a stocker in the local grocery store,which pays $7 per hour for as many hours as he chooses to work,and cleaning windows for the businesses downtown.He makes $2 for every window he cleans.John is indifferent between the two tasks,and the number of windows he can clean depends on how many hours he spends cleaning in a day,as shown in the table below:   Cleaning time  (hr/day)   Total numbers of  windows cleaned 0017211314416517\begin{array} { | l | l | } \hline \begin{array} { l } 	ext { Cleaning time } \	ext { (hr/day)  }\end{array} & \begin{array} { l } 	ext { Total numbers of } \	ext { windows cleaned }\end{array} \\hline 0 & 0 \\hline 1 & 7 \\hline 2 & 11 \\hline 3 & 14 \\hline 4 & 16 \\hline 5 & 17 \\hline\end{array} Cleaning time  (hr/day)  ​012345​ Total numbers of  windows cleaned ​0711141617​​ 
Does the 3rd hour spent cleaning satisfy the cost benefit principle?

Accepted Answer

A)   Yes,since he makes $28.
B)   Yes,since the additional amount earned is $14.
C)   No,since the additional amount earned is $6.
D)   Yes,since the additional amount earned is $6.

Question 3

In which of the following markets do all firms sell the same standardized product?

Accepted Answer

A)   Four-door cars
B)   2% milk
C)   Desktop computers
D)   Sandwiches

Question 4

An increase in the price the firm receives for its output will cause the firm to:

Accepted Answer

A)   expand output and earn greater profits or smaller losses.
B)   leave output unchanged and earn greater profits.
C)   leave output unchanged and earn greater profits or smaller losses.
D)   contract output and earn greater profits.

Question 5

An increase in consumer demand for espresso would lead to a(n) ____,while an increase in the number of firms producing espresso would lead to a(n) _______.

Accepted Answer

A)   increase in quantity supplied;decrease in supply.
B)   increase in supply;increase in quantity supplied.
C)   increase in quantity supplied;increase in supply.
D)   increase in supply;increase in supply.

Question 6

One reason that variable factors of production tend to show diminishing returns in the short run is that:

Accepted Answer

A)   too much capital equipment is idle.
B)   there are more and more workers using a fixed amount of productive resources.
C)   the firm has become too large to effectively manage workers.
D)   the cost of hiring additional workers increases as firms seek to hire more.

Question 7

Acme Dynamite has $2000 of variable costs and $500 of fixed costs when its output is 250 units.It sells each unit for $25.
If the price of dynamite drops to $10,should Acme continue to operate in the short run?

Accepted Answer

A)   No,because Price is less than Average Total Cost
B)   Yes,because Price is less than Average Variable Cost
C)   No,because Price is not greater than Average Total Cost
D)   Yes,because Price is greater than Average Variable Cost

Question 8

A variable factor of production:

Accepted Answer

A)   is fixed in the long run but variable in the short run.
B)   plays no role in the law of diminishing marginal returns.
C)   is variable in both the short run and the long run.
D)   is variable only in the short run.

Exam 6: Perfectly Competitive Supply

A variable factor of production:

Correct Answer
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Acme Dynamite has $2000 of variable costs and $500 of fixed costs when its output is 250 units.It sells each unit for $25. If the price of dynamite drops to $10,should Acme continue to operate in the short run?

Correct Answer
verified

Correct Answer
verified

An increase in the price the firm receives for its output will cause the firm to:

Correct Answer
verified

Suppose a firm is collecting $1,999 in total revenues and the total cost of its fixed factors of production falls from $500 to $400.One can speculate that the firm will:

Correct Answer
verified

One reason that variable factors of production tend to show diminishing returns in the short run is that:

Correct Answer
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In which of the following markets do all firms sell the same standardized product?

Correct Answer
verified

An increase in consumer demand for espresso would lead to a(n) ,while an increase in the number of firms producing espresso would lead to a(n) ___.

Correct Answer
verified

Exam 6: Perfectly Competitive Supply

A variable factor of production:

Correct AnswerverifiedShow Answer

Acme Dynamite has $2000 of variable costs and $500 of fixed costs when its output is 250 units.It sells each unit for $25. If the price of dynamite drops to $10,should Acme continue to operate in the short run?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An increase in the price the firm receives for its output will cause the firm to:

Correct AnswerverifiedShow Answer

Suppose a firm is collecting $1,999 in total revenues and the total cost of its fixed factors of production falls from $500 to $400.One can speculate that the firm will:

Correct AnswerverifiedShow Answer

One reason that variable factors of production tend to show diminishing returns in the short run is that:

Correct AnswerverifiedShow Answer

In which of the following markets do all firms sell the same standardized product?

Correct AnswerverifiedShow Answer

An increase in consumer demand for espresso would lead to a(n) ____,while an increase in the number of firms producing espresso would lead to a(n) _______.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

An increase in consumer demand for espresso would lead to a(n) ,while an increase in the number of firms producing espresso would lead to a(n) ___.

Correct Answer
verified