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Question;ECO 561 week 2 knowledge check quiz;1. Purely competitive firms increase total revenue;by;A. increasing production;B. decreasing production;C. increasing price;D. decreasing price;2. What are two ways for a competitive firm to;determine the optimal level of production, that is, the level of production;that will maximize profit or minimize losses?;A. Comparing total revenue to total cost or marginal;revenue to marginal costs;B. Comparing average revenue to average costs or;marginal revenue to marginal costs;C. Comparing average variable costs to price or;marginal revenue to price;D. Comparing total revenue to average variable costs;or price to average variable costs;3. Suppose that a firm determines that its;marginal revenue is greater than its marginal cost, it would be better to;A. increase production;B. decrease production;C. keep production the same;D. increase price;4. It is profitable for a firm to continue;employing additional resources as long as;A. Marginal Revenue Product >= Marginal Resource;Cost;B. Marginal Revenue Product = Marginal cost;D. Marginal Revenue Product >= Price;5. As additional units are produced, the marginal;revenue product falls for all firms because marginal product decreases. For;firms operating in industries that are not perfectly competitive, marginal;revenue product also falls because;A. product price falls as output increases;B. product price falls as output decreases;C. product price increases as output increases;D. product price increases as output decreases;6. All things being equal, an increase in;demand for a product;A. increases demand for the resources used in its;production;B. decreases demand for the resources used in its;production;C. increases the supply of a product;D. decreases the supply of resources used in its;production;7. Marginal cost can be defined as the;addition to _____ of one more unit of output.;A. total variable costs;B. average total costs;C. average variable costs;D. total fixed costs;8. If a firm stars small and, over time;builds successively larger plant sizes or adds additional work space in an;office, average total costs are most likely to;A. initially decrease, then begin to rise;B. initially rise, then begin to decrease;C. remain constant over time;D. continually increase;9. Demand for resources, including labor;depend on its;A. productivity;B. profitability;C. availability;D. accessibility;10. The primary difference between increasing-;and decreasing-cost industries lies in;A. fixed-cost components: only increasing-cost;industries have significant fixed costs;B. variable-cost components: only decreasing-cost;industries have significant variable costs;C. the fact that the average total cost (ATC) of;firms in increasing-cost industries will first decline and then eventually;increase with output, while decreasing-cost firms experience progressively;lower ATC with increased output;D. efficiency of production;11. When adding labor or other factors of;production, businesses may see their total product rise, but see their per-unit;increase in return for each additional unit diminish. This phenomenon;A. occurs only for firms that do not efficiently use;their factors of production;B. applies only to capital-intensive industries;C. is known as diminishing marginal product and has;general market application;D. depends on how abundant or scarce labor is in;existing factor-markets;12. In the short run, firms should shut down;if;A. AVC > P;B. ATC > P > AVC;C. P > ATC;D. P > MC;13. When you are considering the value of a;resource in its next best use, you are considering its;A. opportunity cost;B. production cost;C. marginal cost;D. price;14. of the four major market;structures?perfectly competitive, monopolistic competition, oligopoly, monopoly?reducing;variable costs of production;A. is not a viable option for perfectly competitive;firms? or price-takers?because the per-unit profit margin is fixed by the;equilibrium price;B. can enhance profit for all but the monopoly firm;which, because it has no competition, has little financial incentive to lower;its per-unit costs;C. will result in significant increases in;profit-margin, regardless of market structure, if coupled with significant;increases in product price;D. enhance profit per-unit, because profit equals;revenue minus cost


Paper#55319 | Written in 18-Jul-2015

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