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practice quiz question

practice quiz question - Question 1 To answer the question...

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Question 1 To answer the question refer to the following information and the graph below. Suits Only, a dry cleaning firm that specializes in cleaning men's and women's business suits, operates in a perfectly competitive market. The typical dry-cleaning firm has a minimum long-run average cost of cleaning a business suit equal to $________ and the typical dry cleaning firm earns economic profit equal to $______. A. $4.50, $0 B. $2, $2.50 per suit cleaned C. $3, $1.50 per suit cleaned D. $2, $0 Question 2 1. Firm A and firm B both have total revenues of $200,000 and total costs of $250,000; firm A has total fixed costs of $40,000, while firm B has total fixed costs of $70,000. Which of the following statements are true in the short run? Answer A. Firm A should operate B. Firm B should operate C. Firm A should shut down D. Firm B should shut down E. Both B and C Which of the following CANNOT be true at any output along a perfectly competitive firm's short-run supply curve? Answer A. Average total cost is greater than marginal cost B. Marginal cost is greater than average total cost C. Average variable cost is greater than marginal cost D. Marginal cost is greater than average variable cost Economic rent Answer A. Is the payment to a more productive resource above its opportunity cost B. Cannot be earned in long-run competitive equilibrium
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C. Is competed away in the long run D. Both B and C E. All of the above The expansion path Answer A. Shows how the cost-minimizing input choices change as the firm's output level changes B. Shifts if the input price ratio changes C. Is the collection of all input combinations at which the marginal rate of technical substitution equals the input price ratio D. Both A and C E. All of the above In the graph below, as we move frm 0 to 5 on the quantity axis, the firm is experiencing: A. Economies of scale B. Diseconomies of scale C. Reduction of costs D. Decreasing marginal cost E. None of the above Diseconomies of scale Answer A. Exist when fixed cost increases as output increases B. Exist when long - run average cost increases as output increases C. Result eventually as the firm uses more and more labor with a fixed capital stock D. Both A and B E. All of the above Economists sometimes use the term diseconomies of scale to describe: Answer A. Any upward sloping portion of a long-run average cost curve B. Any downward sloping portion of a long-run average cost curve C. Any upward sloping portion of a long-run marginal cost curve D. Any downward sloping portion of a long-run marginal cost curve E. None of the above A monopolist will maximize profit by producing the level of output at which
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Answer A. The firm's total revenue exceeds total cost by the largest amount B. Marginal revenue equals marginal cost C. The last unit of output produced adds the same amount to total revenue as to total cost D. Both A and B E. All of the above To answer the question refer to the graph below which shows the demand and cost conditions facing a monopolist.
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