1
Which of the following statements is true?
A) P=120-3Q is an inverse demand function
B) P=120-3Q is a demand function
C) For every demand function, there is an equivalent inverse demand function.
D) Both a and c.
2
Authors typically prefer lower book prices than publishers because:
A) authors are more sympathetic to the budget issues faced by students.
B) authors maximize revenue, while publishers maximize profit.
C) authors do not bear the cost of producing the extra books that would be sold at the lower price.
D) Both b and c (many authors write books that are not purchased by students)
3
The demand curve faced by a firm that is a "price taker" is
A) P = A; where A is the market-determined price
B) Q = A; where A is the market-determined quantity
C) P = Q
D) P = 0
4
Worked-out problem 9.3 (which refers back to Worked-out Problem 8.5) uses the fact that you can "find the new efficient scale of production by determining the output level at which:
A) marginal revenue = average cost
B) marginal cost = marginal revenue
C) marginal cost = average cost
D) none of the above
5
The import fee for softwood lumber, causes the supply curve in the domestic market to shift
A) up and to the left ("in")
B) down and to the right ("out")
6
The discussion of the behavior of U.S. oil producers (in application 9.4) assumes that these firms are:
A) price takers
B) perfectly competitive firms
C) firms with market power
D) Both a and b
7
Profit is equal to:
A) revenue – total cost
B) producer surplus – sunk cost
C) Both a and b
D) None of the above
8
A price-taking firm's producer surplus equals the area between a horizontal line drawn at the level of its price P and its supply curve.
A) True
B) False
9
When a firm's profit-maximizing sales level is positive, its marginal revenue equals its marginal cost at that quantity.
A) True
B) False
10
At the current level of output of 100 units, the average variable cost is $15, the average cost is $20, marginal cost is $18, and all fixed costs are sunk. The firm can sell any amount it chooses to at a price equal to $18, but it can sell nothing at any higher price. Which statement(s) is (are) correct, if any?
A) This firm should shut down immediately.
B) This firm should raise its price at least to the level of its average cost.
C) This firm is currently maximizing profit and should do nothing differently.
D) This firm should increase its output.
E) This firm should decrease its output.
1
Which of the following statements is true?
A) P=120-3Q is an inverse demand function
B) P=120-3Q is a demand function
C) For every demand function, there is an equivalent inverse demand function.
D) Both a and c.
2
Authors typically prefer lower book prices than publishers because:
A) authors are more sympathetic to the budget issues faced by students.
B) authors maximize revenue, while publishers maximize profit.
C) authors do not bear the cost of producing the extra books that would be sold at the lower price.
D) Both b and c (many authors write books that are not purchased by students)
3
The demand curve faced by a firm that is a "price taker" is
A) P = A; where A is the market-determined price
B) Q = A; where A is the market-determined quantity
C) P = Q
D) P = 0
4
Worked-out problem 9.3 (which refers back to Worked-out Problem 8.5) uses the fact that you can "find the new efficient scale of production by determining the output level at which:
A) marginal revenue = average cost
B) marginal cost = marginal revenue
C) marginal cost = average cost
D) none of the above
5
The import fee for softwood lumber, causes the supply curve in the domestic market to shift
A) up and to the left ("in")
B) down and to the right ("out")
6
The discussion of the behavior of U.S. oil producers (in application 9.4) assumes that these firms are:
A) price takers
B) perfectly competitive firms
C) firms with market power
D) Both a and b
7
Profit is equal to:
A) revenue – total cost
B) producer surplus – sunk cost
C) Both a and b
D) None of the above
8
A price-taking firm's producer surplus equals the area between a horizontal line drawn at the level of its price P and its supply curve.
A) True
B) False
9
When a firm's profit-maximizing sales level is positive, its marginal revenue equals its marginal cost at that quantity.
A) True
B) False
10
At the current level of output of 100 units, the average variable cost is $15, the average cost is $20, marginal cost is $18, and all fixed costs are sunk. The firm can sell any amount it chooses to at a price equal to $18, but it can sell nothing at any higher price. Which statement(s) is (are) correct, if any?
A) This firm should shut down immediately.
B) This firm should raise its price at least to the level of its average cost.
C) This firm is currently maximizing profit and should do nothing differently.
D) This firm should increase its output.
E) This firm should decrease its output.
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