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PreTest Chap 09 e18
Student: ___________________________________________________________________________
1. In a typical graph for a purely competitive firm, the intersection of the total cost and total revenue curves would be:
A. A point of maximum economic profit
B. A point of minimum economic loss
C. A point where MR = MC
D. A breakeven point
2. A firm sells a product in a purely competitive market. The marginal cost of the product at the current output of 500 units is $1.50. The
minimum possible average variable cost is $1.00. The market price of the product is $1.25. To maximize profit or minimize losses, the
firm should:
A. Continue producing 500 units
B. Produce less than 500 units
C. Produce more than 500 units
D. Shut down
3. Given the graph above, at the market price of 0
A
, a competitive firm would:
A. Shut down
B. Break even
C. Earn economic profits equal to
ADCB
D. Increase profits by increasing its price
4. In pure competition, the marginal revenue of a firm always equals:
A. Product price
B. Total revenue
C. Average total cost
D. Marginal cost
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View Full Document 5. Refer to the above table. If a competitive firm faced with these costs finds that it can sell its product at $60 per unit, it will:
A. Produce 5 units and incur a loss of $50
B. Produce 6 units and incur a loss of $30
C. Produce 7 units and realize a profit of $32
D. Close down in the short run
6. Refer to the graph above representing the purely competitive market for a product. The area of producer surplus would be represented
by triangular area:
A. a
B. b
C. c
D. d
7. Refer to the above cost chart. The lowest output level on this firm's shortrun supply curve is:
A. 10
B. 12
C. 16
D. 20
8. The longrun supply curve for the industry described in the graph above would be:
A. Vertical
B. Horizontal
C. Upward sloping
D. Downward sloping
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This note was uploaded on 05/23/2010 for the course ECON 101 taught by Professor Keep during the Spring '10 term at Glendale Community College.
 Spring '10
 Keep
 Microeconomics

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