ECON 500 Week 4 Quiz Questions & Answers
A firm encounters its "shutdown point" when:
Select one:
a.
average total cost equals price at the profit-maximizing level of output.
b.
average variable cost equals price at the profit-maximizing level of output.
Correct
c.
average fixed cost equals price at the profit-maximizing level of output.
d.
marginal cost equals price at the profit-maximizing level of output.
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The correct answer is: average variable cost equals price at the profit-maximizing level of output.
Question 2
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Question text
A perfectly competitive firm will maximize profits (or minimize losses) so long as price (marginal
revenue) is:
Select one:
a.
greater than marginal cost.
b.
greater than average fixed cost.
c.
greater than average total cost.
d.
greater
Correct than average variable cost.
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,ECON 500 Week 4 Quiz Questions & Answers
The correct answer is: greater than average variable cost.
Question 3
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A perfectly competitive firm will minimize its losses by shutting down when: Select one:
a.
P < AVC at the profit-maximizing level of output.
Correct
b.
P < ATC at the profit-maximizing level of output.
c.
P < MC at the profit-maximizing level of output.
d.
P < TFC at the profit-maximizing level of output.
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The correct answer is: P < AVC at the profit-maximizing level of output.
Question 4
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All of the following are characteristics of a perfectly competitive market except: Select one:
a.
a large number of sellers.
b.
, ECON 500 Week 4 Quiz Questions & Answers
perfectly elastic demand.
c.
a homogeneous product.
d.
barriers to entry.
Correct
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The correct answer is: barriers to entry.
Question 5
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As described in the text, which of the following statements best describes the strategy of many
potato growers since 2005?
Select one:
a.
Growers have worked together to reduce supply and stabilize demand. As a result, equilibrium price
has been propped up and allowed farmers to earn what they consider a decent profit.
Correct
b.
Growers have continued to compete vigorously with each other, causing prices and profits to
decrease.
c.
Growers have restricted supply so much that there is now a severe shortage of potatoes in the
United States.
d.
because efforts by potato growers to restrict supply are illegal in the United States, they have
focused exclusively on increasing demand to increase their profits.
Feedback
The correct answer is: Growers have worked together to reduce supply and stabilize demand. As a
result, equilibrium price has been propped up and allowed farmers to earn what they consider a
decent profit.
A firm encounters its "shutdown point" when:
Select one:
a.
average total cost equals price at the profit-maximizing level of output.
b.
average variable cost equals price at the profit-maximizing level of output.
Correct
c.
average fixed cost equals price at the profit-maximizing level of output.
d.
marginal cost equals price at the profit-maximizing level of output.
Feedback
The correct answer is: average variable cost equals price at the profit-maximizing level of output.
Question 2
Correct
Mark 1.00 out of 1.00
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Question text
A perfectly competitive firm will maximize profits (or minimize losses) so long as price (marginal
revenue) is:
Select one:
a.
greater than marginal cost.
b.
greater than average fixed cost.
c.
greater than average total cost.
d.
greater
Correct than average variable cost.
Feedback
,ECON 500 Week 4 Quiz Questions & Answers
The correct answer is: greater than average variable cost.
Question 3
Correct
Mark 1.00 out of 1.00
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Question text
A perfectly competitive firm will minimize its losses by shutting down when: Select one:
a.
P < AVC at the profit-maximizing level of output.
Correct
b.
P < ATC at the profit-maximizing level of output.
c.
P < MC at the profit-maximizing level of output.
d.
P < TFC at the profit-maximizing level of output.
Feedback
The correct answer is: P < AVC at the profit-maximizing level of output.
Question 4
Correct
Mark 1.00 out of 1.00
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Question text
All of the following are characteristics of a perfectly competitive market except: Select one:
a.
a large number of sellers.
b.
, ECON 500 Week 4 Quiz Questions & Answers
perfectly elastic demand.
c.
a homogeneous product.
d.
barriers to entry.
Correct
Feedback
The correct answer is: barriers to entry.
Question 5
Correct
Mark 1.00 out of 1.00
Flag question
Question text
As described in the text, which of the following statements best describes the strategy of many
potato growers since 2005?
Select one:
a.
Growers have worked together to reduce supply and stabilize demand. As a result, equilibrium price
has been propped up and allowed farmers to earn what they consider a decent profit.
Correct
b.
Growers have continued to compete vigorously with each other, causing prices and profits to
decrease.
c.
Growers have restricted supply so much that there is now a severe shortage of potatoes in the
United States.
d.
because efforts by potato growers to restrict supply are illegal in the United States, they have
focused exclusively on increasing demand to increase their profits.
Feedback
The correct answer is: Growers have worked together to reduce supply and stabilize demand. As a
result, equilibrium price has been propped up and allowed farmers to earn what they consider a
decent profit.
