my answers to econ mid2

Price b average revenue c total revenue divided by

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Unformatted text preview: . total revenue divided by output. d. All of the above are correct. 19. For a competitive firm, a. total revenue equals average revenue. b. total revenue equals marginal revenue. c. total cost equals marginal revenue. d. average revenue equals marginal revenue. 20. Suppose that a firm operating in perfectly competitive market sells 100 units of output. Its total revenues from the sale are $500. Which of the following statements is correct? i) Marginal revenue equals $5. ii) Average revenue equals $5. iii) Price equals $5. a. b. c. d. i) only iii) only i) and ii) only i), ii), and iii) Table 14-7 Marginal Cost $5 $6 $7 $8 $9 $10 Quantity 12 13 14 15 16 17 Marginal Revenue $9 $9 $9 $9 $9 $9 21. Refer to Table 14-7. If the firm is currently producing 14 units, what would you advise the owners? a. decrease quantity to 13 units b. increase quantity to 17 units c. continue to operate at 14 units d. increase quantity to 16 units 22. Refer to Table 14-7. If the firm is maximizing profit, how much profit is it earning? a. $0 b. $1 c. $10 d. There is insufficient data to determine the firm’s profit. Table 14-8 The following table presents cost and revenue information for Soper’s Port Vineyard. COSTS REVENUES Quantity Produced Total Cost Marginal Cost Quantity Demanded Price 0 1 2 3 4 5 6 7 8 $100 $150 $202 $257 $317 $385 $465 $562 $682 -- 0 1 2 3 4 5 6 7 8 $120 $120 $120 $120 $120 $120 $120 $120 $120 23. Refer to Table 14-8. What is the marginal cost of the 1st unit? a. $50 b. $75 c. $80 d. $150 24. Refer to Table 14-8. What is the marginal cost of the 8th unit? a. $0 b. $100 c. $120 d. $140 Total Revenue Marginal Revenue -- 25. Refer to Table 14-8. What is Soper’s Port Vineyard’s economic profit at their profit maximizing point? a. $78 b. $243 c. $278 d. $375 26. Refer to Table 14-8. In order to maximize profits, how many units should Soper’s Port Vineyard’s produce? a. 5 b. 6 c. 7 d. 8 Scenario 14-1 Assume a certain firm is producing Q = 1,000 units of output. At Q = 1,000, the firm's marginal cost equals $15 and its average total cost equals $11. The firm sells its output for $12 per unit. 27. Refer to Scenario 14-1. At Q = 1,000, the firm's profits equal a. $-200. b. $1,000. c. $3,000. d. $4,000. 28. Refer to Scenario 14-1. At Q = 999, the firm's total cost amounts to a. $10,985. b. $10,990. c. $10,995. d. $10,999. 29. Refer to Scenario 14-1. At Q = 999, the firm's profits equal a. $993. b. $997. c. $1,003. d. $1,007. 30. Refer to Scenario 14-1. To maximize its profit, the firm should a. increase its output. b. continue to produce 1,000 units. c. decrease its output but continue to produce. d. shut down....
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This note was uploaded on 01/27/2014 for the course ECON 1010 taught by Professor Jonathanpritchett during the Fall '12 term at Tulane.

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