Practice Test 14 - Practice Test 14 Multiple Choice...

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Practice Test 14 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. When buyers in a competitive market take the selling price as given, they are said to be a. market entrants. b. monopolists. c. free riders. d. price takers. Use the information for a competitive firm in the table below to answer the following questions. Table 14-2 Quantity Total Revenue Total Cost 0 $0 $10 1 9 14 2 18 19 3 27 25 4 36 32 5 45 40 6 54 49 7 63 59 8 72 70 9 81 82 ____ 2. Refer to Table 14-2. At which quantity of output is marginal revenue equal to marginal cost? ____ 3. When managers of firms think at the margin and make incremental adjustments to the level of production, they are naturally led to a level of production where ____ 4. When calculating marginal cost, what must the firm know? ____ 5. The additional revenue a firm in a competitive market receives if it increases its production by one unit equals its a. marginal revenue. b. average revenue. c. price per unit of output. d. All of the above are correct.
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The graph below depicts the cost structure for a firm in a competitive market. Use the graph to answer the fol- lowing questions. Figure 14-2 ____ 6. Refer to Figure 14-2. Which of the following statements best reflects the situation faced by the firm when price falls from P 4 to P 2 ? ____ 7. A profit-maximizing firm in a competitive market will always make marginal adjustments to production as long as ____ 8. The short-run supply curve for a firm in a perfectly competitive market is The figure below depicts the cost structure of a profit-maximizing firm in a competitive market. Use the fig- ure to answer the following questions. Figure 14-4
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