Essay on Microeconomics Quiz Review

2103 Words Nov 2nd, 2013 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: $2.
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
…show more content…
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: profit.

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).

Open Document