Micro_StudyQuestions_for_Final

Micro_StudyQuestions_for_Final - STUDY QUESTIONS 1. A firm...

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STUDY QUESTIONS 1. A firm which faces an upward sloping supply curve for the resources or factors it purchases is a: a. product price taker. b. product price searcher. c. factor price taker. d. factor price searcher. 2. Marginal revenue product is equal to marginal revenue times: a. average fixed cost. b. marginal physical cost. c. marginal physical revenue. d. average total cost. e. none of the above. 3. Marginal factor cost (MFC) is: a. the additional cost generated by producing an additional unit of output. b. the additional revenue generated by employing an additional factor unit. c. the additional cost generated by employing an additional factor unit. d. total cost from the production of a product divided by the total number of factor units used. EXHIBIT A Units of factor X Quantity of Output Product Price Marginal Revenue Product 0 10 $10 -- 1 19 10 A 2 27 10 B 3 34 10 C 4 40 10 D 4. In exhibit A, the dollar amount that go in blanks A-D are, respectively: a. $85, $70, $40, $30 b. $10, $20, $30, $40 c. $90, $80, $70, $60 d. $70, $80, $40, $30 5. In exhibit A, the data show that: a. MR > P, thus we are dealing with a product price taker b. MR = P, thus we are dealing with a product price searcher c. MR = P, thus we are dealing with a product price taker d. none of the above 6. One way to calculate MRP is: a. MPP/MR b. MR + MPP c. MPP - (MR x 2) d. none of the above 7. A firm's factor demand curve is its: a. average physical product curve. b. marginal physical product curve. c. average revenue product curve. d. marginal revenue product curve. 8. Suppose a factor price taker purchases one unit of factor X for $10. At what price would it purchase the second unit, and what would marginal factor cost (MFC) equal? a. It would purchase the second unit for $10, and MFC = $10 b. There is not enough information to know what it would purchase the second unit for, and thus we do not know what MFC equals. c. It would purchase the second unit for $10, but there is not enough information to know what MFC equals. d. There is not enough information to know what it would purchase the second unit for, but MFC = $10. e. none of the above
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9. Why does the MRP curve slope downward for a product price taker? a. Because MRP = MR x MPP; after some point, as more of a factor is employed, the lower its MPP, thus MRP declines. b. Because MRP = MFC x MPP; after some point, as more of a factor is employed, the lower its MFC, thus MRP declines. c. Because MRP = MR x MPP; after some point, MR declines for a product price taker, thus MRP declines. d. Because MRP = MFC x MPP; after some point, MFC and MR decline, thus MRP declines. 10. A firm will maximize its profits by hiring factors up to the point at which: a. MR = MC, if the firm is a monopolist, monopolistic competitor, or oligopolist.
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Micro_StudyQuestions_for_Final - STUDY QUESTIONS 1. A firm...

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