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For a competitive firm, if any level of production results in losses, the loss-minimizing output level is when:

A. marginal product equals marginal cost

B. marginal revenue equals marginal cost

C. price equals marginal revenue

D. total revenue equals total cost

E. average revenue equals average cost


For a single competitive firm, marginal revenue is equivalent to:

A. marginal product

B. marginal cost

C. total revenue

D. output price

E. the sum of all input prices


A firm that considers price as a given and chooses quantity of output accordingly is called a:

A. profit-maximizer

B.  quantity-setter

C. market-taker

D. monopoly

E. price-taker


Marginal revenue is the change in :

A. total profit from changing output by one unit

B. total revenue as a result of changing output by one unit

C. average revenue as a result of changing output by one unit

D. total revenue as a result of changing input by one unit

E. total cost as a result of changing output by one unit


Marginal cost is:

A. the change in total cost that results from hiring one more unit of labor

B. total cost divided by total output

C. the change in total variable cost that results from hiring one more unit of capital

D. the change in total cost that results from hiring one more unit of capital

E. the change in total cost that results from increasing output by one unit


In 2016, a firm produces 100 units of good X at $1. In 2017, the firm produced 200 units of good X at $0.5 Between 2016 and 2017 revenue of producing good X:

A. stayed constant

B. increased

C. might increase, decrease, or stay constant

D. decreased

E. was equal to zero


If total revenue is less than total costs, then:

A. economic profits are positive

B. economic profits are zero

C. economic profits are negative

D. a firm breaks even

E. profits can be positive, or negative, depending on other factors



A market demand curve:

A. is based on consumer utility maximization

B. can be derived only if market price actually falls

C. graphically illustrates decreasing marginal utility

D. is derived from the law of diminishing utility

E. is derived by the process of vertical summation


Economists assume that people:

A. acts to maximize marginal utility

C. acts to increase utility

D. cannot compare the value of goods

E. prefer less to more

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