Approximate monthly revenues

Note: It is recommended that you save your response as you complete each question.

Question 1 (1 point)

If a perfectly competitive firm increases production from 10 units to 11 units, and the market price is $20 per unit, total revenue for 11 units is:

Question 1 options:

	$10.
	$20.
	$200.
	$220.

Question 2 (1 point)

Which of the following is not an assumption economists make when using the model of perfect competition?

Question 2 options:

	Firms seek to maximize profits.
	The products of each firm in a particular market are identical.
	Each firm sets it price equal to its average total cost.
	There is easy entry and exit.

Question 3 (1 point)

If a perfectly competitive firm sells 300 units of output at a market price of $1 per unit, its marginal revenue is:

Question 3 options:

	less than $1.
	$1.
	more than $1 but less than $300.
	$300.

Question 4 (1 point)

If this is a perfectly competitive market, when the demand is D₁ and the supply is S, any firm could enter and sell carrots for:

Question 4 options:

	20 cents a pound.
	25 cents a pound.
	30 cents a pound.
	any price above 20 cents a pound.

Question 5 (1 point)

If this is a perfectly competitive market, which of the following is true?

Question 5 options:

	The supply curve is linear and is determined by average total cost.
	The equilibrium price and output are determined by demand and supply.
	Each firm in this market is a price setter.
	The price is too high.

Question 6 (1 point)

An assumption of the model of perfect competition is:

Question 6 options:

	discrimination.
	ease of entry and exit.
	few buyers and sellers.
	limited information.

Question 7 (1 point)

If this is a perfectly competitive market, each firm:

Question 7 options:

	will be a price setter.
	can sell all it wants to sell at the price determined by demand and supply.
	has an incentive to sell at a price lower than the market price.
	will attempt to maximize its total revenue.

Question 8 (1 point)

An assumption of the model of perfect competition is:

Question 8 options:

	difficult entry and exit.
	few buyers and sellers.
	complete information.
	different goods.

Question 9 (1 point)

For a firm producing at any level of output greater than the most profitable one, a reduction in output decreases total:

Question 9 options:

	cost more than total revenue.
	revenue more than total cost.
	revenue by the same amount as total cost.
	revenue but not total cost.

Question 10 (1 point)

In the short run, a perfectly competitive firm does not produce output and earns a negative economic profit if:

Question 10 options:

	P = ATC.
	P < AVC.
	AVC > P > ATC.
	AVC < P < ATC.

Question 11 (1 point)

In perfectly competitive markets, if the price is _______ , the firm will _______ .

Question 11 options:

	greater than ATC; make an economic profit
	less than the minimum AVC; shut down
	greater than the minimum AVC but less than ATC; continue to produce and incur a loss.
	all of the above are true.

Question 12 (1 point)

A firm’s shut-down point is the minimum value of:

Question 12 options:

	total cost.
	average variable cost.
	average total cost.
	marginal cost.

Question 13 (1 point)

In the short run, if AVC < P < ATC, a perfectly competitive firm:

Question 13 options:

	produces output and earns an economic profit.
	produces output and incurs an economic loss.
	does not produce output and earns an economic profit.
	does not produce output and earns zero economic profit.

Question 14 (1 point)

Economic profit is maximized when:

Question 14 options:

	the slope of the total revenue curve is equal to the slope of the total cost curve.
	marginal revenue is more than marginal cost.
	an additional unit of output yields a benefit to the firm greater than the additional cost.
	no more output can be sold at the market price.

Question 15 (1 point)

The profit-maximizing level of output for a perfectly competitive firm in the short run occurs where:

Question 15 options:

	marginal cost equals price.
	marginal revenue equals price.
	total revenue equals total cost.
	average revenue equals average total cost.

Question 16 (1 point)

The most profitable level of output occurs at quantity:

Question 16 options:

	F.
	K.
	L.
	M.

Question 17 (1 point)

Which of the following is (are) true?

Question 17 options:

	Total revenue and total cost are equal at approximately 8,300 pounds of output.
	Marginal cost and marginal revenue are equal at approximately 8,300 pounds of output.
	At approximately 4,500 pounds of output, marginal cost is zero and increasing returns sets in.
	All of the above are true.

Question 18 (1 point)