1030PS8Key

1030PS8Key - University of Denver ECON1030 Spring 2011...

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University of Denver ECON1030 Spring 2011 Problem Set 8: Multiple Choice Chapter 7-The Competitive Firm Print Name__________________ SEC________ 1. A firm’s profit and loss statement provides a a. complete measure of the firm’s indebtedness. b. snapshot of the firm’s financial health. c. comparison of the source and uses of funds. d. complete measure of the firm’s financial health. e. complete measure of the firm’s financial stability. ANS: B PTS: 1 DIF: 2 TOP: Revenue 2. A snapshot of the firm’s financial health is provided by the a. balance sheet. b. source and uses of funds statement. c. profit and loss statement. d. cost minimization statement. e. None of the above. ANS: C PTS: 1 DIF: 1 TOP: Revenue 3. For a firm to earn a profit, its a. costs must exceed its revenue. b. cash inflow must exceed its cash outflow. c. assets must exceed its liabilities. d. revenues must exceed its costs. e. cash inflows must exceed its liabilities. ANS: D PTS: 1 DIF: 1 TOP: Revenue 4. A firm incurs a loss if its a. cash outflows exceed its cash inflows. b. liabilities exceed its cash inflows. c. liabilities exceed its assets. d. revenues exceed its costs. e. costs exceed its revenues. ANS: E PTS: 1 DIF: 1 TOP: Revenue
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5. The revenue curve plots the relationship between a. revenue and output. b. total and marginal revenue. c. marginal revenue and output. d. revenue and costs. e. marginal revenue and marginal costs. ANS: A PTS: 1 DIF: 1 TOP: Revenue 6. The curve that plots the relationship between revenue and output is called the a. profit curve. b. revenue curve. c. marginal cost curve. d. average cost curve. e. supply curve. ANS: B PTS: 1 DIF: 1 TOP: Revenue 7. The extra revenue that a firm receives from selling an additional unit of output is its a. net profit. b. contribution to costs. c. average cost. d. marginal revenue. e. total revenue. ANS: D PTS: 1 DIF: 1 TOP: Revenue 8. Marginal revenue is a. the revenue that a firm receives from selling its output. b. the excess of revenue over cost. c. the revenue that a firm receives from selling an additional unit. d. the excess of revenue over fixed costs. e. total revenue divided by total output. ANS: C PTS: 1 DIF: 1 TOP: Revenue 9. For a firm in a competitive market, the total revenue curve is a. upward sloping with a constant slope. b. vertical. c. downward sloping with a constant slope. d. horizontal. e. upward sloping with a downward slope. ANS: A PTS: 1 DIF: 2 TOP: Revenue
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10. The revenue curve of a firm in a competitive market is a straight line because a. the competitive firm has no control over its input. b. price equals total revenue. c. revenue rises proportionately with price. d. marginal revenue equals total revenue. e.
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This note was uploaded on 05/25/2011 for the course ECON 1030 taught by Professor Vangeocasio during the Spring '11 term at Denver.

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1030PS8Key - University of Denver ECON1030 Spring 2011...

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