Microecon Chapter 7 – Flashcards

The Campus Crustacean Company receives $2 per box for its crawfish and is selling 1600 boxes to maximize its profits. What is the per-unit profit on a box of crawfish at the profit-maximizing level of output if the variable cost is $1 per box and fixed costs are $1200?

Consider the purely competitive firm pictured above. The firm is earning:

When a purely competitive industry is in long-run equilibrium, which statement is true?

When a purely competitive firm is in long-run equilibrium and is allocatively efficient:

Refer to the graph. At output level H, the area:

If firms are losing money in a purely competitive industry, then in the long run this situation will shift the industry:

One implication of the shape of the demand curve that faces a perfectly competitive firm is that

If a perfectly competitive firm is producing an output level where price is less than marginal costs, then the firm should

Mutual interdependence would tend to limit control over price in which market model?

The graph shows the cost functions of Moe's mushroom gathering business, which is perfectly competitive. In this graph, the curve labeled A is upward sloping because:

When a purely competitive firm is in long-run equilibrium, price is equal to:

In general, if the price of a fixed factor of production decreases,

The graph shows the cost functions of Moe's mushroom gathering business, which is perfectly competitive. In this graph, when mushrooms sell for $10 per bushel, Moe will gather:

Given the table below, what is the short-run profit-maximizing level of output for the firm?

If there is allocative efficiency in a purely competitive market for a product, the minimum price producers are willing to accept is:

In general, if the price of a variable factor of production increases,

Individual supply curves generally slope upward because:

When a competitive firm triples the amount of output it sells,

The table below shows cost data for a firm that is selling in a purely competitive market. Refer to the table. If the market price for the firm's product is $180, the competitive firm will produce:

There would be a unique product for which there are few close substitutes under which market model?

In a perfectly competitive industry over the long run,

Refer to the graphs. Which statement is true?

Refer to the table. The equilibrium price of the product is:

A ten percent increase in a perfectly competitive firm's fixed cost will

The table below shows cost data for a firm that is selling in a purely competitive market. Refer to the above cost chart. Which output level will the firm never produce?

A firm sells a product in a purely competitive market. The marginal cost of the product at the current output of 500 units is $1.50. The minimum possible average variable cost is $1.00. The market price of the product is $1.25. To maximize profit or minimize losses, the firm should:

Which of the following expressions is correct? a. Profit = (Price of output - Average total cost) * Quantity of output. b. Profit = (Price of output * Quantity of output) - total variable cost. c. Profit = Total revenue - (Average total cost/quantity of output) d. Profit = Total revenue - (Average variable cost * Quantity of output).

Which of the following conditions is not necessary for a market to be perfectly competitive: Select one: a. The firms sell a standardized product. b. Market demand for the product is perfectly elastic. c. Firms can easily buy and sell the productive resources necessary to compete in the market. d. All are necessary.

In pure competition, the average revenue of a firm always equals:

Suppose all firms in a perfectly competitive industry are experiencing economic losses to varying degree. One can predict that:

The graph above represents a(an):

A purely competitive firm is producing at the point where its marginal cost equals the price of its product. If the firm increases its output, then total revenue will:

Suppose a perfectly competitive firm collects total revenues of $1,000 when it produces 200 units. The marginal costs of producing 200 units is $5. The firm should

There would be some control over price within rather narrow limits in which market model?

If a competitive firm is currently producing a level of output at which profit is not maximized, then it must be true that: a. marginal revenue exceeds marginal cost. b. total cost exceeds total revenue. c. variable cost exceeds total revenue. d. none of the above are necessarily correct.

The long-run supply curve would be upward sloping in:

A purely competitive firm is in short-run equilibrium and its MC exceeds its ATC. It can be concluded that:

Average revenue is:

In a purely competitive industry, each firm:

Refer to the graph. The level of output at which this firm will produce is:

A profit-maximizing firm's primary goal is to maximize

The long-run supply curve in a constant-cost industry would be:

The table below shows cost data for a firm that is selling in a purely competitive market. Refer to the above cost chart. If the marginal revenue is $6, what output should the firm produce?

Refer to the graph for a firm in pure competition. Line B is horizontal because:

The difference between the actual price that a producer receives and the minimum acceptable price a producer is willing to accept is:

In order for a firm to choose to produce a positive amount of output, it must be the case that

If a perfectly competitive firm produces an output level where output price is less than marginal costs, then the firm should

When demand increases, in the short run the purely competitive firm:

Suppose a perfectly competitive firm confronts a price of $6 and produces 650 units. For this to be a point of profit maximization,

Refer to the graph for a firm in pure competition. Line A represents:

The purely competitive firm's supply curve:

The price equals marginal cost rule for profit maximization is a specific example of which of the following principles?

In a perfectly competitive industry, economic profits

An industry experiencing increasing returns to scale and fixed factor prices will have a long-run supply curve that is:

Suppose a firm is collecting $1,700 in total revenues and its variable costs of production is $1,900 at its current level of output. In the short run, one can predict that the firm