Pre-Test Chap 09 e18

# Pre-Test Chap 09 e18 - Pre-Test Chap 09 e18 Student 1 In a typical graph for a purely competitive firm the intersection of the total cost and total

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Pre-Test 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 break-even 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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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 short-run supply curve is: A. 10 B. 12 C. 16 D. 20 8. The long-run 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.

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Pre-Test Chap 09 e18 - Pre-Test Chap 09 e18 Student 1 In a typical graph for a purely competitive firm the intersection of the total cost and total

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