econ - problem set 7_ProblemSet

econ - problem set 7_ProblemSet - Review Assessment:...

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Review Assessment: Problem Set 7 Name: Problem Set 7 Status: Completed Score: 65 out of 100 point(s) Instructions: Question 1 Multiple Choice 5 of 5 point(s) In long-run equilibrium of a competitive market, the number of firms in the market adjusts so that all of the market demand is satisfied at a price equal to Your Answer: the minimum value of average total cost. Correct Answer: the minimum value of average total cost. Feedback: the minimum value of average total cost. Question 2 Multiple Choice 0 of 5 point(s) Regardless of the cost structure of firms in a competitive market, in the long run Your Answer: exit and entry is likely to lead to a horizontal long-run supply curve. Correct Answer: the marginal firm will earn zero economic profit. Feedback: the marginal firm will earn zero economic profit. Question 3 Multiple Choice 5 of 5 point(s) Refer to the following information to answer the following questions. Scenario 14-2 Assume a certain firm is producing 1,000 units of output (so Q = 1,000). At Q = 1,000, the firm's marginal cost equals $15 and its average total cost equals $11. The firm sells its output for $12 per unit. Refer to Scenario 14-2. To maximize its profit, the firm should Your Answer: decrease its output, but continue to produce. Correct Answer: decrease its output, but continue to produce. Feedback: decrease its output, but continue to produce. Question 4 Multiple Choice 5 of 5 point(s)
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Firms that shut down in the short run still have to pay their Your Answer: fixed costs. Correct Answer: fixed costs. Feedback: fixed costs. Question 5 Multiple Choice 0 of 5 point(s) In the figure below, panel (a) depicts the linear marginal cost of a firm in a competitive market and panel (b) depicts the linear market supply curve for a market with a fixed number of identical firms. Use the figure to answer the following questions. Figure 14-7 Refer to Figure 14-7. When 100 identical firms participate in this market, at what price will 15,000 units be supplied to this market? Your Answer: It cannot be determined from the information provided. Correct Answer: $1.50 Feedback: $1.5 0 Question 6 Multiple Choice 0 of 5 point(s) For any given price, a firm in a competitive market will maximize profit by selecting the level of output at which price intersects the Your Answer: average total cost curve. Correct Answer: marginal cost curve. Feedback: marginal cost curve. Question 7 Multiple Choice 5 of 5 point(s)
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When existing firms in a competitive market are profitable, an incentive exists for Your Answer: new firms to enter the market, even without government subsidies. Correct Answer: new firms to enter the market, even without government subsidies. Feedback:
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econ - problem set 7_ProblemSet - Review Assessment:...

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