Essay on Microeconomics Quiz Review

2103 Words Jan 27th, 2014 9 Pages
Chapter 9
1. All firms, no matter what type of firm structure they are producing in, make their production decisions based on where:
marginal revenue equals marginal costs.
2. According to the table below, when profits are maximized, profits are equal to:

3. Many economists believe that the market for wheat in the United States is an almost perfectly competitive market. If one firm discovers a technology that makes their wheat taste better and have fewer calories than all other wheat offered in the market, the wheat market would become less competitive because:
the products would no longer be similar in the wheat market.
4. When talking about economics profits in a perfectly competitive market, the difference between the
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short-run market supply; left; increase.

21. Which of the following lists the three main characteristics of a competitive market?
many buyers and sellers, similar products, easy entry into the market

22. Total revenue minus total cost equals:

23. A firm participating in a competitive market with costs described in the table below would always shut down:

if the price is equal to $2.

24. When revenue is insufficient to cover cost,
the firm suffers a loss.

25. Sunk costs:
are costs that have been incurred as a result of past decisions.

26. According to the figure below, this firm would shut down in the long run if:

the price fell below $5.

27. One difference between implicit costs and explicit costs is that:
explicit costs are included in accounting profits, whereas implicit costs are not.

28. Holding all else constant, an increase in the price of hot dogs would cause:
the marginal revenue (MR) curve in the market for hot dog buns to decrease.

29. Marginal revenue is:
the change in total revenue when the firm produces additional units.

30. According to the figure below, if the firm is maximizing profits, profit is represented by the area:

(A – B) × C.

31. Firms will always stay in the market if:
the price they charge is greater than their minimum average variable cost (AVC).