Quiz 9

A  fixed cost

B  variable cost

C  average cost

D  marginal cost

A  marginal cost efficiency

B  productive efficiency

C  allocative efficiency

A  allocative efficiency : costs

B  economic efficiency : marginal revenues

C  allocative efficiency : marginal costs

D  economic efficiency : total revenues

A  utility-maximizing efficiency

B  allocative efficiency

C  productive efficiency

A  perfectly inelastic

B  perfectly elastic

C  unit elastic

A  a curve showing the relationship between market supply and demand.

B  a curve showing the relationship between a firm’s costs and the quantity of output a firm can produce.

C  a curve showing the relationship between the price charged by a specific firm and the quantity the firm can sell.

A  vertical line.

B  horizontal line.

C  downward sloping line.

A  long run : fixed costs can be eliminated

B  short run : losses are smallest

C  short run : fixed costs can be reduced

D  long run : variable costs can be increased

A  Firms that experience losses try to increase supply to cover their costs, leading to zero profits.

B  Prices drop when other perfectly competitive firms see an opportunity to earn profits and enter the market.

C  The demand for products falls over time, so firms are unable to generate revenue.

A  long run : increasing capital inputs

B  short run : increasing price

C  short run : increasing physical inputs

D  long run : reducing production or shutting down

A  consumers have all the relevant information to make rational buying decisions.

B  The products are identical.

C  There are many buyers and sellers.

A  No, you would not raise the price.

B  Yes, you would raise the price slightly.

C  Yes, you would raise the price enough to meet your target pricing.

A  it must be a relatively small player compared to its competitors in the overall market.

B  pressure from competing firms will force acceptance of the prevailing market price.

C  it can increase or decrease its output without affecting overall quantity supplied in the market.

D  quality differences will be very perceptible and will play a major role in purchasers’ decisions.

A  marginal cost

B  fixed cost

C  variable revenue

A  stick with that level of production in order to maximize profits.

B  decrease output in order to maximize profits.

C  increase output in order to maximize profits.

A  The best production choice is at a quantity where price is equal to marginal cost.

B  Price is equal to marginal revenue.

C  A profit-seeking firm should expand production into the zone where marginal cost is greater than marginal revenue.