Microeconomics Exam 3 Multiple
Choice/35 Complete Q’s and A’s
The implicit costs of producing a good are - -the opportunity costs of
producing the good
-For any type of firm in any market, the profit-maximizing quantity of some
good is found when - -marginal costs equal marginal revenue
-Which of the following statements about economic profit is true? - -It takes
into account both explicit and implicit costs
-Which of the following would be considered a fixed cost in the short run? - -
rent for a building
-The change in total cost from producing one more unit of output is known
as - -marginal cost
-A firms economic profit will always be _____________ its accounting profit - -
less than
-Firms in competitive markets have _________ market power - -no
-Because a firm in a competitive market can sell as much as it wants at the
market price, we know that - -price always equals marginal revenue
-How many firms would we expect to find in a competitive market? - -many
-What is the primary question a firm in a competitive market must answer in
the short run? - -what is the profit-maximizing level of output
-The marginal revenue curve faced by a firm in a competitive market is - -
horizontal
-If a firm in a competitive market sells the profit-maximizing level of output,
and price is greater than average costs at that level of output, we know that
economic profit is - -positive
-For an individual firm in a competitive market, - -the demand curve is the
same as the marginal revenue curve
-If a firm in a competitive market sells the profit-maximizing level of output,
and profit is negative at that level of output, but price is greater than
average variable cost, that firm should - -stay in business
Choice/35 Complete Q’s and A’s
The implicit costs of producing a good are - -the opportunity costs of
producing the good
-For any type of firm in any market, the profit-maximizing quantity of some
good is found when - -marginal costs equal marginal revenue
-Which of the following statements about economic profit is true? - -It takes
into account both explicit and implicit costs
-Which of the following would be considered a fixed cost in the short run? - -
rent for a building
-The change in total cost from producing one more unit of output is known
as - -marginal cost
-A firms economic profit will always be _____________ its accounting profit - -
less than
-Firms in competitive markets have _________ market power - -no
-Because a firm in a competitive market can sell as much as it wants at the
market price, we know that - -price always equals marginal revenue
-How many firms would we expect to find in a competitive market? - -many
-What is the primary question a firm in a competitive market must answer in
the short run? - -what is the profit-maximizing level of output
-The marginal revenue curve faced by a firm in a competitive market is - -
horizontal
-If a firm in a competitive market sells the profit-maximizing level of output,
and price is greater than average costs at that level of output, we know that
economic profit is - -positive
-For an individual firm in a competitive market, - -the demand curve is the
same as the marginal revenue curve
-If a firm in a competitive market sells the profit-maximizing level of output,
and profit is negative at that level of output, but price is greater than
average variable cost, that firm should - -stay in business
