ECON-B 251 Final Exam (Mod 9-12)
Test Questions with Correct Verified
Answers 2025-2026 Updated.
The goal of the firm is to - Answer maximize profit
Which of the following is a type of market? - Answer perfect competition
monopolistic competition
Oligopoly
Monopoly
Total cost (TC) = - Answer TFC + TVC
or
ATC * q
When marginal product is rising - Answer marginal cost is falling
Sue quit her $40,000 per year job and opened a coffee shop that she calls Top Brew. In the first
year, Top Brew earned $200,000 in revenue. For the same year, Top Brew paid $80,000 to
employees in wages, spent $40,000 on ingredients such as coffee beans, $15,000 rent for the
building to house Top Brew. Sue also used $50,000 of her personal savings to purchase
equipment for Top Brew, which she was earning $4,000 in interest each year. Assuming no
depreciation in the value of the equipment, Sue's economic profit from Top Brew for the year is
$ - Answer $21,000
-subtract everything besides the $50,000 since this came from her personal savings, not the
company
Which of the following are examples of implicit opportunity costs? - Answer -the owner's time
-depreciation
-interest forgone
Having an equal amount of information is known as - Answer symmetric information
, In a perfectly competitive market there are ___ buyers, ____ sellers producing ____ products.
____ have full information and ____ have market power. - Answer -many
-many
-identical
-buyers and sellers
-neither buyers nor sellers
The short run is a period of time in which - Answer the quantity used of at least one factor of
production is fixed
As output increases if marginal product is increasing, marginal costs is _____ - Answer
decreasing
When a firm is producing a given output at the least possible cost, it is producing on - Answer
its long-run average cost curve
the market with the lowest barriers to enter is ____ - Answer perfect competition
Long-run average total costs decrease as output increases is known as ______ scales and
observed on the ____ of the ______ average cost curve - Answer - economies of
- downwards sloping portion
- long-run
The demand for corn from Hoosier farms is perfectly elastic because corn from Hoosier farms is
- Answer a perfect substitute for corn from other farms
The profit maximizing level of output for the perfectly competitive firm occurs where - Answer
price (MR) = MC
OR
where profit is the largest
At the profit maximizing level of output, firms shutdown when - Answer price < AVC
Test Questions with Correct Verified
Answers 2025-2026 Updated.
The goal of the firm is to - Answer maximize profit
Which of the following is a type of market? - Answer perfect competition
monopolistic competition
Oligopoly
Monopoly
Total cost (TC) = - Answer TFC + TVC
or
ATC * q
When marginal product is rising - Answer marginal cost is falling
Sue quit her $40,000 per year job and opened a coffee shop that she calls Top Brew. In the first
year, Top Brew earned $200,000 in revenue. For the same year, Top Brew paid $80,000 to
employees in wages, spent $40,000 on ingredients such as coffee beans, $15,000 rent for the
building to house Top Brew. Sue also used $50,000 of her personal savings to purchase
equipment for Top Brew, which she was earning $4,000 in interest each year. Assuming no
depreciation in the value of the equipment, Sue's economic profit from Top Brew for the year is
$ - Answer $21,000
-subtract everything besides the $50,000 since this came from her personal savings, not the
company
Which of the following are examples of implicit opportunity costs? - Answer -the owner's time
-depreciation
-interest forgone
Having an equal amount of information is known as - Answer symmetric information
, In a perfectly competitive market there are ___ buyers, ____ sellers producing ____ products.
____ have full information and ____ have market power. - Answer -many
-many
-identical
-buyers and sellers
-neither buyers nor sellers
The short run is a period of time in which - Answer the quantity used of at least one factor of
production is fixed
As output increases if marginal product is increasing, marginal costs is _____ - Answer
decreasing
When a firm is producing a given output at the least possible cost, it is producing on - Answer
its long-run average cost curve
the market with the lowest barriers to enter is ____ - Answer perfect competition
Long-run average total costs decrease as output increases is known as ______ scales and
observed on the ____ of the ______ average cost curve - Answer - economies of
- downwards sloping portion
- long-run
The demand for corn from Hoosier farms is perfectly elastic because corn from Hoosier farms is
- Answer a perfect substitute for corn from other farms
The profit maximizing level of output for the perfectly competitive firm occurs where - Answer
price (MR) = MC
OR
where profit is the largest
At the profit maximizing level of output, firms shutdown when - Answer price < AVC
