Microeconomics Test 2 (83)

Microeconomics Test 2 (83) - AP Microeconomics Multiple...

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AP Microeconomics Multiple Choice: Choose the best answer to each question. Each question is worth an equal amount. The honor code applies to this test. The figure below depicts a production function for a firm that produces cookies. Use the figure to answer question 1. 1. As the number of workers increases: A. Marginal product increases, but at a decreasing rate B. Total output increases, but at a decreasing rate C. Marginal product increases D. Total output decreases 2. Economies of scale occur when: A. Long-run average total costs rise as output increases B. Average fixed costs are falling C. Long-run average total costs fall as output increases D. Average fixed costs are constant Use the information for a competitive firm in the table below to answer questions 3-7. Quantity Total Revenue Total Cost 0 $ 0 $ 10
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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 3. If this firm chooses to maximize profit it will choose a level of output where marginal cost is equal to: A. 5 B. 7 C. 9 D. 11 4. At a production level of 3 units which of the following is true? A. Fixed cost is zero B. Marginal cost is $6 C. Total revenue is less than variable cost D. Marginal revenue is less than marginal cost 5. If the firm finds that its marginal cost is $11, it should: A. Increase production to maximize profit B. Decrease production to maximize profit C. Maintain its current level of production to maximize profit D. Advertise to find additional buyers 6. At which level of production is average revenue equal to marginal cost?
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A. 1 B. 3 C. 6 D. 8 7. The maximum profit available to this firm is: A. $2 B. $3 C. $4 D. $5 8. The short-run supply curve for a firm in a perfectly competitive market: A. Is determined by forces external to the firm B. Is reflected in its marginal cost curve (above average variable cost) C. Will be influenced by the magnitude of fixed costs D. Is likely to slope downward The graph below depicts the cost structure for a firm in a competitive market. Use the graph to answer questions 9-12. 9. When price falls from P 3 to P 1 , the firm finds that a. fixed cost is higher at a production level of Q 1 than it is at Q 3 .
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b. it is unwilling to produce any output. c. it should produce Q
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This note was uploaded on 09/14/2011 for the course ECON 103 taught by Professor Gispy during the Spring '11 term at Prairie State College .

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Microeconomics Test 2 (83) - AP Microeconomics Multiple...

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