Test 3 Study Guide

# Test 3 Study Guide - Exam 3 Study Guide (ch. 10 12) Use the...

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Exam 3 Study Guide (ch. 10 – 12) Use the following to answer questions 1-4: 1. Refer to the above diagram. At P 2 , this firm will: A) produce 44 units and realize an economic profit. B) produce 44 units and earn only a normal profit. C) produce 66 units and earn only a normal profit. D) shut down in the short run. 2. Refer to the above diagram. At P 1 , this firm will produce: A) 47 units and break even. B) 47 units and realize an economic profit. C) 66 units and earn only a normal profit. D) 24 units and earn only a normal profit. 3. Refer to the above diagram. At P 4 , this firm will: A) shut down in the short run. B) produce 30 units and incur a loss. C) produce 30 units and earn only a normal profit. D) produce 10 units and earn only a normal profit. 4. Refer to the above diagram. At P 3 , this firm will: A) produce 14 units and realize an economic profit. B) produce 62 units and earn only a normal profit. C) produce 40 units and incur a loss. D) shut down in the short run. Page 1

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Answer the next question(s) on the basis of the following cost data for a purely competitive seller: T o t a l O u t p u t c o s t 0 \$ 5 0 1 9 0 2 1 2 0 3 1 4 0 4 1 7 0 5 2 1 0 6 2 6 0 7 3 3 0 5. Refer to the above data. If product price is \$60, the firm will: A) shut down. B) produce 4 units and realize a \$120 economic profit. C) produce 6 units and realize a \$100 economic profit. D) produce 3 units and incur a \$40 loss. 6. Refer to the above data. If product price is \$45, the firm will: A) shut down. B) produce 4 units and realize a \$120 economic profit. C) produce 5 units and realize a \$15 economic profit. D) produce 6 units and realize a \$100 economic profit. 7. Refer to the above data. If product price is \$25, the firm will: A) shut down and incur a \$90 loss. B) shut down and incur a \$50 loss. C) produce 3 units and incur a \$65 loss. D) produce 4 units and realize a \$10 economic profit. Use the following to answer question 8:
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## This note was uploaded on 01/20/2011 for the course ECON 16814 taught by Professor Mukherjee during the Spring '10 term at University of Houston.

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Test 3 Study Guide - Exam 3 Study Guide (ch. 10 12) Use the...

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