Practice Exam 2

Practice Exam 2 - Practice Exam 2 - Multiple Choice 1. A...

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Practice Exam 2 - Multiple Choice 1. A firm's profit is equal to which of the following? a. the value of its sales b. marginal revenue minus marginal cost c. total sales minus wages d. total revenue minus total cost e. none of the above 2. Which of the following is not a characteristic of a perfectly competitive firm? a. perfectly elastic demand curve b. price taker c. control over market price d. many sellers e. all of the above are characteristics of perfectly competitive firms 3. Which of the following can a firm vary in the long-run? a. no factors of production b. all factors of production c. all but one factor of production d. only one factor of production e. more information about the firm is needed to answer this question 4. When the quantity of an input can be altered in the short-run, the input is a. fixed. b. variable. c. implicit. d. explicit. e. efficient. 5. A perfectly competitive firm will maximize profit when a. total revenue exceeds total cost. b. marginal revenue exceeds marginal cost. c. price equals marginal cost. d. price equals marginal benefit. e. marginal benefit exceeds marginal cost.
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6. A firm will shut down when a. it is not earning a profit. b. price does not equal marginal cost. c. price is less than average cost. d.
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Practice Exam 2 - Practice Exam 2 - Multiple Choice 1. A...

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