“”Please answer with simple
explanations””
“”Please
answer with simple
explanations””
“”Please
answer with simple
explanations””
“”Please
answer with simple
explanations””
“”Please
answer with simple explanations””

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1.       Accounting profits
are typically:

a.       Greater than
economic profits because the former do not take explicit costs into
account

b.      Equal top economic
profits because accounting costs include all opportunity costs.

c.       Smaller than
economic profits because the former do not take implicit costs into
account

d.      Greater than economic
profits because the former do not take implicit costs into
account

2.       Which of the
following statement concerning the relationships between total
product (TP), average product (AP), and marginal product (MP) is
not correct?

a.       AP continues to
rise so long as TP is rising.

b.      AP reaches a maximum
before TP reaches a maximum.

c.       TP reaches a
maximum when the MP of the variable input becomes zero.

d.      MP cuts AP at the
maximum Ap.

3.       If in the short
run a firm’s total product is increasing, then its:

a.       Marginal product
must also be increasing.

b.      Marginal product must be
decreasing.

c.       Marginal product
could be either increasing or decreasing

d.      Average product must
also be increasing.

4.       In the short run,
which of the following statement is correct?

a.       The marginal cost
curve intersects the average variable and average fixed cost curve
at their minimum points.

b.      Average variable cost
declines continuously as total output is expanded

c.       Total cost will
exceed variable cost

d.      If the inputs of all
resources are increased by equal amounts, total output will expand
by diminishing amounts.

5.       Because the
marginal product of a variable resource at first increases and then
decreases as the output of the firm is increased:

a.       Total cost at
first increases at a decreasing rate and then increases at an
increasing rate,

b.      Total variable cost at
first increases at an increasing rate and then increases at a
decreasing rate.

c.       Average total cost
at first increases at an increasing rate and then increases at a
decreasing rate.

d.      Average total cost at
first increases and then diminishes.

e.      Average fixed cost will
rise beyond the point of diminishing returns.

Question: ""Please answer with simpleexplanations""""Pleaseanswer with simpleexplanations""""Pleaseansw...

6.       The above diagram
shows the short-run average total cost curves for five different
plant sizes of a firm. The shape of each individual curve
reflects:

a.       Increasing
returns, followed by diminishing returns.

b.      Economic of scale,
followed by diseconomies of scale.

c.       Constant
costs.

d.      Increasing costs,
followed by decreasing costs.

7.       As the firm in the
above diagram expands from plant sizw#1 to plant size #3, it
experiences:

a.       Diminishing
returns.

b.      Economic of scale.

c.       Diseconomies of
scale.

d.      Constant costs.

8.       As the firm in the
above diagram expands plant size#3 to plant size #5, it
experiences:

a.       Increasing
returns

b.      Economic of scale.

c.       Diseconomies of
sale.

d.      Constant costs.

Question: ""Please answer with simpleexplanations""""Pleaseanswer with simpleexplanations""""Pleaseansw...

9.       Refer to above
diagram. For output level Q, per unit costs of C are:

a.       Unattainable and
imply the inefficient use of resources.

b.      Unattainable, given
resource prices and the current state of technology.

c.       Attainable, but
imply the inefficient use of resources.

d.      Attainable and imply
that resources are being combined efficiently.

10.       If an industry’s
long- run average total cost curves has an extended range of
constant returns to scale, this implies that:

a.       Technology
precludes both economics and discectomies of scale.

b.      The industry will be a
natural monopoly.

c.       Both relatively
small and relatively large firms can be viable in the industry.

d.      The industry will be
comprised of very large number of small firms.

In answering the
next question. assume a graph in which dollars are measured on the
vertical axis and output on the horizontal axis.

11.       Refer to the above
information. For a purely competitive firm, total revenue:

a.       Graphs as
straight, up sloping line.

b.      Is a straight line,
parallel to vertical axis

c.       Is a straight
line, parallel to the horizontal axis

d.      Graph as a straight,
down sloping line.

12.       In the short run a
purely competitive firm that seeks to maximize profit will
produce:

a.       Where the demand
and the ATC curves intersect

b.      Where total revenue
exceeds total cost profits are zero

c.       At any point where
the total revenue and total cost curves intersect.

d.      At any point where the
total revenue and total cost curves intersect

13.       Which of the
following is not a valid generalization concerning the relationship
between price and costs for a purely competitive seller in the
short run?

a.       Price must be at
least equal to average total cost.

b.      Price times quantity
produced must be equal to or greater than total variable cost for
some level of output or firm will close down in the short run

c.       Price may be equal
to, greater than, or less than average total cost.

d.      Price must be equal to
or greater than minimum average variable cost for the firm to
continue producing.

14.       If a purely
competitive firm is producing at some level less than the
profit-maximizing output, than:

a.       Price is
necessarily greater than average total cost.

b.      Fixed costs are large
relative to variable costs.

c.       Prices exceeds
marginal revenue

d.      Marginal revenue exceed
marginal cost.

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