The ABC Seed Company finds to maximize its profits, it should produce 1,000 pack
ID: 1101509 • Letter: T
Question
The ABC Seed Company finds to maximize its profits, it should produce 1,000 packets of seeds each day. At this quantity, P = $5, AVC = $2, and ATC = $3. Given this information, the company is making economic profits equal to:
A) $5,000 per day.
B) $1,000 per day.
C) $3,000 per day.
D) $2,000 per day.
E) Zero per day.
Is it A?
Microeconomics is the study of:
A) Government policies in regulating competition.
B) The causes of inflation, unemployment and economic growth.
C) The behavior of markets and the buyers and sellers in those markets.
D) Small business firms in the economy.
Is it C or D? Couldn't it be both?
Statement 1: For a perfectly competitive firm, the breakeven point occurs at the bottom of the ATC curve. Statement 2: For a perfectly competitive firm, the shutdown point occurs at the bottom of the AVC curve.
A) Statement (1) is true; statement (2) is false.
B) Both statements (1) and (2) are false.
C) Statement (1) is true; statement (2) is false.
D) Both statements (1) and (2) are true.
I know Statement 1 is true I think? But not sure about statement 2.
Statement 1: Fixed costs vary with the level of output produced. Statement 2: At an output of 0, total cost (TC) is always equal to 0.
A) Both statements are true.
B) Statement 1 is false and statement 2 is true.
C) Statement 1 is true and statement 2 is false.
D) Both statements are false.
Statement 1 is FALSE, what about statement 2?
If a firm is able to practice perfect price discrimination:
A) The firm will charge each customer the maximum price the customer is willing and able to pay for the product.
B) All of the answers are true.
C) The firm will have larger economic profits (as compared to if it could not perfectly price discriminate).
D) The consumer surplus received by buyers of the product is equal to zero.
Is it B?
Explanation / Answer
D) $2,000 per day
C) The behavior of markets and the buyers and sellers in those markets.
D) Both statements (1) and (2) are true.
D) Both statements are false.
B) All of the answers are true.
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