Microeconomics Quiz Review
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 long run and the short run is that: in the short run firms can earn positive or negative economic profits, but in the long run firms have zero economic profits.
5. Assuming a firm’s costs are split between variable costs and fixed costs, once variable costs are covered, any extra money goes toward paying the fixed costs.
6. A firm participating in a competitive market with costs described in the table below would break even: if the price is equal to $6.
7. As a firm attempts to expand production, it must _____________ the wage it pays to attract additional help. This leads to ________ costs, making the long-run supply curve slope ___________. increase; higher; upward.
8. The entry and exit of firms ensure that the ________________ is much more ________ in the long run than in the short run. market supply curve; elastic
9. Holding all else constant, an increase in the market demand for a product in a competitive market would cause: the marginal revenue (MR) curve of the firms to increase.
10. The market for watches is perfectly competitive and is currently in equilibrium. If watches become more popular among college students, in the short run, firms will experience economic profits; but in the long run, firms
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 long run and the short run is that: in the short run firms can earn positive or negative economic profits, but in the long run firms have zero economic profits.
5. Assuming a firm’s costs are split between variable costs and fixed costs, once variable costs are covered, any extra money goes toward paying the fixed costs.
6. A firm participating in a competitive market with costs described in the table below would break even: if the price is equal to $6.
7. As a firm attempts to expand production, it must _____________ the wage it pays to attract additional help. This leads to ________ costs, making the long-run supply curve slope ___________. increase; higher; upward.
8. The entry and exit of firms ensure that the ________________ is much more ________ in the long run than in the short run. market supply curve; elastic
9. Holding all else constant, an increase in the market demand for a product in a competitive market would cause: the marginal revenue (MR) curve of the firms to increase.
10. The market for watches is perfectly competitive and is currently in equilibrium. If watches become more popular among college students, in the short run, firms will experience economic profits; but in the long run, firms