FREE AND STUDY GAMES ABOUT ECON TEST 2 EXAM

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FREE AND STUDY GAMES ABOUT ECON TEST #2 EXAM

QUESTIONS

Actual Qs and Ans Expert-Verified Explanation

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-Guarantee passing score -91 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation Question 1: assume a graph in which dollars are measured on the vertical axis and output on the horizontal axis. for a purely competitive firm, marginal revenue

Answer:

is a straight line, parallel to the horizontal axis.

Question 2: the budget line shows

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all possible combinations of two goods that can be purchased, given money income and the prices of the goods Question 3: the indifference curve in the above diagram yields juan 100 units of utility. if juan's money income were to increase by 20 percent, the indifference curve would

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not be affected.

Question 4: refer to the above data. average product is at a maximum when

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two workers are hired

Question 5: where total utility is at a maximum, marginal utility is

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zero

Question 6: the marginal revenue curve of a purely competitive firm

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is horizontal at the market price.

Question 7: which of the following statements is correct

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noncash gift-giving create a value loss, but cash gifts do not

Question 8: the law of diminishing returns describes the

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relationship between resource inputs and product outputs in the short run

Question 9: for most producing firms

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average total costs decline as output is carried to a certain level, and then begin to rise Question 10: if you operated a small bakery, which of the following would be a variable cost in the short run?

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baking supplies (flour, salt, etc.) Question 11: if a firm in a purely competitive industry is confronted with an equilibrium price of

$5, its marginal revenue:

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will also be $5 Question 12: which of the following is characteristic of a purely competitive seller's demand curve?

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price and marginal revenue are equal at all levels of output.

Question 13: refer to the above short-run data, total fixed cost for this firm is:

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200 Question 14: refer to the above data. the marginal product of the sixth worker is

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15 units of output

Question 15: marginal utility

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diminishes as more of a product is consumed Question 16: the first, second, and third workers employed by a firm add 24, 18, and 9 units to total product respectively. therefore, the

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marginal product of the third worker is 9.

Question 17: firm reaches a break-even point (normal profit position) where

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total revenue and total cost are equal

Question 18: in the above diagram curves 1, 2, and 3 represent the

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marginal, average, and total product curves respectively Question 19: which of the following industries most closely approximates pure competition?

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agriculture

Question 20: the short run is characterized by

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at least one fixed resource

Question 21: an industry comprised of a very large number of sellers producing a standardized product is known as

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pure competition Question 22: in the short run a purely competitive firm that seeks to maximize profit will

produce:

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where total revenue exceeds total cost by the maximum amount Question 23: in which of the following industry structures is the entry of new firms the most difficult?

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pure monopoly Question 24: if a firm decides to produce no output in the short run, its costs will be:

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its fixed costs.

Question 25: the above diagram suggests that

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when marginal product lies above average product, average product is rising.

Question 26: if in the short run a firm's total product is increasing, then its

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marginal product could be either increasing or decreasing Question 27: if a variable input is added to some fixed input, beyond some point the resulting

extra output will decline. this statement describes:

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the law of diminishing returns Question 28: refer to the above short-run data, total fixed cost for this firm is:

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where total revenue exceeds total cost by the maximum amount.