The below Figure shows the cost structure for a firm, use the figure to answer q

Question

The below Figure shows the cost structure for a firm, use the figure to answer

questions 1 through 3.

1. When the output level is 100 units average fixed cost is

$10.

$8.

$5.

This cannot be determined from the diagram.

Question 2

2. When output level is 100, what is the total cost of production?

$20

$1,000

$1,200

$2,000

  

Question 3

A If output is 100 units what is the fixed cost of production?

$8

$800

$1,000

This cannot be determined from the diagram.

Question 4

4. Fancy Footwear manufactures shoes. The below Figure shows Fancy Footwear's marginal product of

labor and average product of labor curves in the short run.

Which of the following statements correctly describes the curves in the figure?

The marginal product of labor curve is represented by curve A and the average product of labor curve is represented by curve B.

The marginal product of labor curve is represented by curve B and the average product of labor curve is represented by curve A.

Curve A could represent either the average product curve or the marginal product and curve. Curve B represents the total product curve.

Curve B could represent either the average product curve or the marginal product curve. Curve A represents the total product curve.  

Question 5

5. When the marginal product of labor rises

the marginal cost of production will exceed the average total cost.

the marginal cost of production also rises.

the marginal cost of production falls.

the average total cost of production also rises.

Question 6

6. Which of the following characteristics of a farmers' market make it a good example of a perfectly competitive market?

Selling product at a farmers' market was very profitable for farmers in the early 2000s. As result, many farmers sold their farms to larger firms.

Farmers who sell product at a farmers' market are similar to other entrepreneurs who introduce products that earn short-run profits but invite competition that drives down prices and profits in the long run.

Farmers who sell product at a farmers' market are similar to other business owners who take advantage of the willingness of some consumers to pay high prices for new and different products.

Farmers selling product at a farmers' market provide a product that is a necessity, rather than a luxury.

Question 7

7. Firms in perfectly competitive industries are unable to control the prices of the products they

sell and earn a profit in the long run. Which of the following is one reason for this?

Owners of perfectly competitive firms realize that their short-run profits are temporary. Therefore, they either sell their businesses or develop other products that will earn short-run profits.

Firms in perfectly competitive industries can use advertising in the short run to persuade consumers that their products are better than those of other firms. But eventually consumers realize that all of the firms sell virtually identical products.

Firms from other countries are able to produce similar products at lower costs.

Firms in these industries sell identical products.

A

$10.

B

$8.

C

$5.

D

This cannot be determined from the diagram.

The below Figure shows the cost structure for a firm, use the figure to answer questions 1 through 3. 1. When the output level is 100 units average fixed cost is A $10. B $8. C $5. D This cannot be determined from the diagram. Question 2 2. When output level is 100, what is the total cost of production? A $20 B $1,000 C $1,200 D $2,000 Question 3 A If output is 100 units what is the fixed cost of production? B $8 C $800 D $1,000 E This cannot be determined from the diagram. Question 4 4. Fancy Footwear manufactures shoes. The below Figure shows Fancy Footwear's marginal product of labor and average product of labor curves in the short run. Which of the following statements correctly describes the curves in the figure? A The marginal product of labor curve is represented by curve A and the average product of labor curve is represented by curve B. B The marginal product of labor curve is represented by curve B and the average product of labor curve is represented by curve A. C Curve A could represent either the average product curve or the marginal product and curve. Curve B represents the total product curve. D Curve B could represent either the average product curve or the marginal product curve. Curve A represents the total product curve. Question 5 5. When the marginal product of labor rises A the marginal cost of production will exceed the average total cost. B the marginal cost of production also rises. C the marginal cost of production falls. D the average total cost of production also rises. Question 6 6. Which of the following characteristics of a farmers' market make it a good example of a perfectly competitive market? A Selling product at a farmers' market was very profitable for farmers in the early 2000s. As result, many farmers sold their farms to larger firms. B Farmers who sell product at a farmers' market are similar to other entrepreneurs who introduce products that earn short-run profits but invite competition that drives down prices and profits in the long run. C Farmers who sell product at a farmers' market are similar to other business owners who take advantage of the willingness of some consumers to pay high prices for new and different products. D Farmers selling product at a farmers' market provide a product that is a necessity, rather than a luxury. Question 7 7. Firms in perfectly competitive industries are unable to control the prices of the products they sell and earn a profit in the long run. Which of the following is one reason for this? A Owners of perfectly competitive firms realize that their short-run profits are temporary. Therefore, they either sell their businesses or develop other products that will earn short-run profits. B Firms in perfectly competitive industries can use advertising in the short run to persuade consumers that their products are better than those of other firms. But eventually consumers realize that all of the firms sell virtually identical products. C Firms from other countries are able to produce similar products at lower costs. D Firms in these industries sell identical products.

Explanation / Answer

1.b
2.c
3.d
4.b
5.a
6.c
7.b

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