Question 1

Which of the following is NOT a valid way to calculate a firm's total profit?

Accepted Answer

Marginal profit times quantity sold.

Question 2

A perfectly competitive firm earns a profit when the market price is:

Accepted Answer

Above minimum average total cost.

Question 3

Refer to Figure 12-5. If the market price is $20, what is the firm's profit-maximizing output?

Accepted Answer

1,350 units

Question 4

Refer to Figure 12-5. If the market price is $20, what is the amount of the firm's profit?

Accepted Answer

$6,750

Question 5

A firm will make a profit when:

Accepted Answer

$$P \u003e ATC$$

Question 6

Which of the following is NOT a characteristic of a perfectly competitive market structure?

Accepted Answer

There are restrictions on exit of firms.

Question 7

The price of a seller's product in perfect competition is determined by:

Accepted Answer

Market demand and market supply.

Question 8

In perfect competition, which of the following statements is correct?

Accepted Answer

The market demand curve is downward sloping while demand for an individual seller's product is perfectly elastic.

Question 9

Which of the following describes a situation in which a good or service is produced at the lowest possible cost?

Accepted Answer

Productive efficiency

Question 10

The demand curve for a monopoly's product is:

Accepted Answer

The market demand for the product.

Question 11

Refer to Figure 15-2. To maximize profit, the monopolist will produce at which output level?

Accepted Answer

$$Q_2$$

Question 12

Refer to Figure 15-2. The firm's profit-maximizing price is:

Accepted Answer

$$P_3$$

Question 13

Refer to Figure 15-2. If the firm's average total cost curve is $$ATC_1$$, the firm will:

Accepted Answer

Make a profit.

Question 14

Refer to Figure 15-2. If the firm's average total cost curve is $$ATC_2$$, the firm will:

Accepted Answer

Break even.

Question 15

Refer to Figure 15-2. If the firm's average total cost curve is $$ATC_3$$, the firm will:

Accepted Answer

Suffer a loss.

Question 16

Refer to Figure 15-6. The profit-maximizing output and price for the monopolist are:

Accepted Answer

Output = 62; Price = $24.

Question 17

Refer to Figure 15-6. The monopolist's total revenue is:

Accepted Answer

$$1,488$$

Question 18

Refer to Figure 15-6. The monopolist's total cost is:

Accepted Answer

$$1,240$$

Question 19

Refer to Figure 15-6. The monopolist earns a profit of:

Accepted Answer

$$248$$

Question 20

Refer to Figure 15-10. The deadweight loss due to a monopoly is represented by the area:

Accepted Answer

FHE

Microeconomics Exam 3 Sample – Step-by-Step Study Guidance

Study Guide - Practice Questions