Unit 3: Production, Cost and Perfect Competition

Which of the following statements can be made with certainty based on the available information?

Which of the following statements accurately describes the relationship between average product (AP) and marginal product (MP) of labor?

On the basis of the information in the table, and the assumption that total fixed costs are $100, which of the following is a correct statement?

Every time Mr. Hamm makes another pizza in his shop, he places $0.45 worth of sauce on top. For Mr. Hamm, the cost of pizza sauce is a component of which of the following? I. Total Fixed Costs II. Total Variable Costs III. Marginal Cost IV. Total Costs

Which of the following statements is true for a firm in a perfectly competitive industry?

The owner of a competitive firm making zero economic profit

A competitive firm facing the cost and revenue conditions described should

In order to find the market supply curve for a particular good, one would

The industry that makes plastic army figures uses a small fraction of the plastic demanded for all purposes. On this basis, we can conclude that the army-figures industry is most likely a(n)

How many units of output should be produced in order to maximize profit?

In the short run, a firm should shut down if

Diminishing marginal returns occur when

Based on the data, what is the marginal cost of producing the 4th unit?

A perfectly competitive firm is a price taker because

A profit-maximizing firm produces at the output level where

In long-run equilibrium, a perfectly competitive firm earns

The marginal cost curve intersects the average total cost curve at the

What is the average variable cost of producing 3 units?

In a perfectly competitive market, which of the following is true for an individual firm?

The short-run supply curve for a perfectly competitive firm is the portion of the marginal cost curve that lies above the

Economies of scale exist when

If a perfectly competitive firm is earning economic losses in the short run but price is above average variable cost, the firm should

At what output level does the firm maximize profit, and what is the profit per unit?

When marginal product is at its maximum, marginal cost is at its

In the long run, if firms in a perfectly competitive industry are earning economic profits, then

The relationship between marginal cost and average total cost is such that when MC is below ATC,

Diseconomies of scale occur when

Constant returns to scale exist when

Allocative efficiency is achieved when

In the long run, a perfectly competitive firm operates where P equals the minimum of the long-run ATC curve. This means the firm achieves

A perfectly competitive firm is producing 500 units. At this output: price = [math]12, AVC = [math]10. In the short run, the firm should

A firm has the following cost data: when output is 10, total cost is [math]108; when output is 12, total cost is $118. What is true about this firm's production?

In a perfectly competitive market, new firms enter the industry when existing firms earn economic profit. What is the long-run effect of this entry?

A perfectly competitive firm has the following cost structure: TC = 100 + 2Q + 0.5Q². If the market price is $12, what is the profit-maximizing quantity and the firm's economic profit?

A firm in a perfectly competitive industry is earning positive economic profits in the short run. Which of the following describes the long-run adjustment?