ECN 221 Final Exam correctly answered
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The perfectly competitive model assumes: - correct answer ✔✔1) a great number
of buyers
2) all firms produce the same standardized product
3) easy entry into and easy exit from the market
Price-takers: - correct answer ✔✔have no ability to affect the price of a good in a
market (consumers are normally price-takers, but producers often are not)
Total Revenue - correct answer ✔✔total output times the price at which it sells
that output
Marginal Revenue - correct answer ✔✔ratio of the change in total revenue to the
change in output (increase in total revenue when it sells an additional unit of
output)
Marginal Revenue = - correct answer ✔✔MR = Average Revenue = Market Price =
MC
profit-maximizing level of output - correct answer ✔✔MR = MC above minimum
AVC
, produces output and earns an economic profit if: - correct answer ✔✔P > ATC
produces output and earns zero economic profit if: - correct answer ✔✔P = ATC
The slope of the total revenue - correct answer ✔✔constant
The slope of the total cost - correct answer ✔✔marginal cost
economic profit - correct answer ✔✔The difference between total revenue and
total cost
The break-even price = - correct answer ✔✔minimum value of average total cost
shut-down price - correct answer ✔✔the minimum level of average variable cost
Short-run supply curve - correct answer ✔✔marginal cost curve above its average
variable cost curve, aka the shut-down point (shows the total quantity supplied by
all firms in an industry for each possible price)
AVC < P < ATC - correct answer ✔✔Produces output, Economic Loss
P < AVC - correct answer ✔✔Does not produce output, shut-down
P > ATC - correct answer ✔✔Produces output, Economic Gain
A+ rated already passed
The perfectly competitive model assumes: - correct answer ✔✔1) a great number
of buyers
2) all firms produce the same standardized product
3) easy entry into and easy exit from the market
Price-takers: - correct answer ✔✔have no ability to affect the price of a good in a
market (consumers are normally price-takers, but producers often are not)
Total Revenue - correct answer ✔✔total output times the price at which it sells
that output
Marginal Revenue - correct answer ✔✔ratio of the change in total revenue to the
change in output (increase in total revenue when it sells an additional unit of
output)
Marginal Revenue = - correct answer ✔✔MR = Average Revenue = Market Price =
MC
profit-maximizing level of output - correct answer ✔✔MR = MC above minimum
AVC
, produces output and earns an economic profit if: - correct answer ✔✔P > ATC
produces output and earns zero economic profit if: - correct answer ✔✔P = ATC
The slope of the total revenue - correct answer ✔✔constant
The slope of the total cost - correct answer ✔✔marginal cost
economic profit - correct answer ✔✔The difference between total revenue and
total cost
The break-even price = - correct answer ✔✔minimum value of average total cost
shut-down price - correct answer ✔✔the minimum level of average variable cost
Short-run supply curve - correct answer ✔✔marginal cost curve above its average
variable cost curve, aka the shut-down point (shows the total quantity supplied by
all firms in an industry for each possible price)
AVC < P < ATC - correct answer ✔✔Produces output, Economic Loss
P < AVC - correct answer ✔✔Does not produce output, shut-down
P > ATC - correct answer ✔✔Produces output, Economic Gain
