TP TFC TVC 0 $150 $- 1 $150 $50 2 $150 $75 3 $150 $105 4 $150 $145 5 $150 $200 6
ID: 1100525 • Letter: T
Question
TP TFC TVC
0 $150 $-
1 $150 $50
2 $150 $75
3 $150 $105
4 $150 $145
5 $150 $200
6 $150 $270
7 $150 $360
8 $150 $475
9 $150 $620
10 $150 $800
TP = total product
TFC = total fixed cost
TVC = total variable cost
If a competitive firm faced with these costs finds that it can sell its product at $ 90 per unit, it will:
A) Produce 7 units and realize a profit of $120
B) Produce 8 units and realize a profit of $210
C) Produce 10 units and incur a loss of $50
D) Close down in the short run
2.
TP TFC TVC
0 $150 $-
1 $150 $50
2 $150 $75
3 $150 $105
4 $150 $145
5 $150 $200
6 $150 $270
7 $150 $360
8 $150 $475
9 $150 $620
10 $150 $800
TP = total product
TFC = total fixed cost
TVC = total variable cost
If a competitive firm faced with these costs finds that it can sell its product at $60 per unit, it will:
A) Produce 5 units and incur a loss of $50
B) Produce 6 units and incur a loss of $30
C) Produce 7 units and realize a profit of $32
D) Close down in the short run
3.
TP TFC TVC
0 $150 $-
1 $150 $50
2 $150 $75
3 $150 $105
4 $150 $145
5 $150 $200
6 $150 $270
7 $150 $360
8 $150 $475
9 $150 $620
10 $150 $800
TP = total product
TFC = total fixed cost
TVC = total variable cost
If product price were $30 per unit, the firm will:
A) Produce 5 units and incur a loss of $50
B) Produce 6 units and incur a loss of $30
C) Produce 7 units and incur a loss of $32
D) Close down in the short run
4.
Number of Workers
Total Product
Marginal Product
0
0
1
8
8
2
10
3
25
4
30
5
3
6
34
Refer to the above data. When two workers are employed:
A) total product is 20
B) total product is 18
C) average product is 10
D) total product cannot be determined from the information given
5.
Number of Workers
Total Product
Marginal Product
0
0
1
8
8
2
10
3
25
4
30
5
3
6
34
Refer to the above data. The marginal product of the fourth worker:
A) is 5
B) is 7
C) is 7.5
D) cannot be calculated from the information given
6.
Marginal revenue product of labor measures the increase in:
A) output resulting from one more unit of labor
B) total revenue resulting from one more unit of output
C) revenue per unit from one more unit of output
D) total revenue resulting from one more unit of labor
7.
The law of diminishing marginal utility:
A) refers to the decrease in total satisfaction as more units of the good are consumed
B) refers to the fall in additional satisfaction created by consumption of more and more units of a good
C) refers to the idea that total utility is negative
D) refers to all of the above
Number of Workers
Total Product
Marginal Product
0
0
1
8
8
2
10
3
25
4
30
5
3
6
34
Explanation / Answer
1. A) Produce 7 units and realize a profit of $120
C) Produce 10 units and incur a loss of $50
2. A) Produce 5 units and incur a loss of $50
3. D) Close down in the short run
4. A) total product is 20
5. C) is 7.5
6 D) total revenue resulting from one more unit of labor
7. D) refers to all of the above
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