Micro Review (Quizzes)

When the firm produces 150 units of output, its AVC = $7, and AFC = $3, What is firm's total cost?

• $1,050

• $450

• $1,500

• $600

If the price elasticity of demand of a good is greater than 1, it is called

• Perfectly inelastic

• Inelastic

• Unit-elastic

• Elastic

• Perfectly elastic

Assume that instant noodles are an inferior good, if a recession causes income to drop, what would you expect to happen in the instant noodle market?

• Instant noodle supply will rise

• Instant noodle supply will fall

• Instant noodle demand will rise

• Instant noodle demand will fall

• Cannot determine

For firms operating in the long run, the shut-down point occurs when the price falls below which curve?

• Marginal Cost

• Average Total Cost

• Average Variable Cost

• Average Fixed Cost

• Cannot determine

If the cross-price elasticity of two goods is positive, it implies that the goods are _____ goods.

• Normal

• Inferior

• Complementary

• Substitute

• Cannot determine

Which of the following is a necessary characteristic of a monopoly?

• The firm is the sole seller of its product

• The firm's product has many close substitutes

• The firm generates a large economic profit

• The firm is located in a small geographical market

A monopoly firm maximizes its profit by producing Q = 500 units of output, At the level of output, its marginal revenue is $50, its average revenue is $100, and its average total cost is $54. At Q = 500, the firm's profit is

• $25,000

• $23,000

• $50,000

• $27,000

In which market structure do producers have the least amount of market power?

• Perfect Competition

• Monopolistic Competition

• Oligopoly

• Monopoly

• All of these options

For firms operating in the short run, the shut-down point occurs when the price falls below which curve?

• Marginal Cost

• Average Total Cost

• Average Variable Cost

• Average Fixed Cost

• Cannot determine

In which market structure do firms produce at MR = MC to maximize profits?

• Perfect Competition

• Monopolistic Competition

• Oligopoly

• Monopoly

• All of these options