Filters
Question type
Study Flashcards

Use the information below to answer the following questions. Fact 12.4.2 Exxon Mobil Selling All Its Retail Gas Stations Exxon Mobil is not alone among Big Oil exiting the retail gas business, a market where profits have gotten tougher as crude oil prices have risen. Gas station owners say they're struggling to turn a profit because while wholesale gasoline prices have risen sharply, they've been unable to raise pump prices fast enough to keep pace. Source: Houston Chronicle, June 12, 2008 -Refer to Fact 12.4.2.Exxon Mobil is making ________ decision in the retail gasoline market. This decision maximizes Exxon Mobil's economic profit if ________.


A) a shutdown; price in the retail gas market is less than average total cost
B) an exit; other retail gasoline firms also leave the market
C) an exit; price in the retail gas market is less than average total cost
D) a shutdown; price is less than average variable cost
E) an irrational; the demand for gasoline decreases

Correct Answer

verifed

verified

Use the table below to answer the following questions. Table 12.2.3 Use the table below to answer the following questions. Table 12.2.3 -Refer to Table 12.2.3, which gives the total cost schedule for Brenda's Balloon Shop, a perfectly competitive firm.The average fixed cost of producing the 4th balloon is A) $4.30. B) $4.80. C) $4.70. D) $4.50. E) $1.00. -Refer to Table 12.2.3, which gives the total cost schedule for Brenda's Balloon Shop, a perfectly competitive firm.The average fixed cost of producing the 4th balloon is


A) $4.30.
B) $4.80.
C) $4.70.
D) $4.50.
E) $1.00.

Correct Answer

verifed

verified

E

When a firm is a "price taker," the firm


A) can charge any price that it wants to charge, that is, "take" any price it chooses.
B) pays a fixed price for all of its fixed inputs.
C) will accept ("take") the lowest price that its customers offer.
D) pays a fixed price for all of its variable inputs.
E) cannot influence the market price of the good that it sells.

Correct Answer

verifed

verified

Consumer surplus


A) plus producer surplus is maximized when resources are used efficiently.
B) is maximized when the market outcome is efficient.
C) equals total revenue minus opportunity cost.
D) equals total revenue minus marginal cost.
E) is maximized in the short run but not in the long run.

Correct Answer

verifed

verified

A

Economic profit equals


A) total fixed cost plus total variable cost.
B) total revenue minus marginal cost.
C) marginal revenue minus marginal cost.
D) total revenue minus total cost.
E) total revenue minus total variable cost.

Correct Answer

verifed

verified

Use the figure below to answer the following questions. Use the figure below to answer the following questions. Figure 12.1.1 -Refer to Figure 12.1.1. The firm competes in a perfectly competitive market.Curve A is a straight line because the firm A) is a price taker. B) faces constant returns to scale. C) wants to maximize profits. D) has perfect information. E) has constant marginal cost. Figure 12.1.1 -Refer to Figure 12.1.1. The firm competes in a perfectly competitive market.Curve A is a straight line because the firm


A) is a price taker.
B) faces constant returns to scale.
C) wants to maximize profits.
D) has perfect information.
E) has constant marginal cost.

Correct Answer

verifed

verified

Use the table below to answer the following questions. Table 12.2.2 Use the table below to answer the following questions. Table 12.2.2 -Refer to Table 12.2.2, which gives the total cost schedule for Chip's Pizza Palace, a perfectly competitive firm.If Chip shuts down in the short run, his total cost is A) $0. B) $10 an hour. C) $12 an hour. D) $22 an hour. E) $40 an hour. -Refer to Table 12.2.2, which gives the total cost schedule for Chip's Pizza Palace, a perfectly competitive firm.If Chip shuts down in the short run, his total cost is


A) $0.
B) $10 an hour.
C) $12 an hour.
D) $22 an hour.
E) $40 an hour.

Correct Answer

verifed

verified

Use the table below to answer the following questions. Table 12.2.1 Use the table below to answer the following questions. Table 12.2.1 -Refer to Table 12.2.1, which gives the total revenue schedule and total cost schedule of a perfectly competitive firm.The marginal cost of increasing production from 4 units to 5 units is A) $16. B) $128. C) $100. D) $116. E) $30. -Refer to Table 12.2.1, which gives the total revenue schedule and total cost schedule of a perfectly competitive firm.The marginal cost of increasing production from 4 units to 5 units is


A) $16.
B) $128.
C) $100.
D) $116.
E) $30.

Correct Answer

verifed

verified

A

In a perfectly competitive market, the market price is $8.An individual firm is producing the output at which MC = $8.AVC at that output is $10.What should the firm do to maximize its economic profit in the short run?


A) shut down
B) expand output
C) contract output but continue to produce
D) leave output unchanged
E) raise the price

Correct Answer

verifed

verified

Use the figure below to answer the following questions. Use the figure below to answer the following questions. Figure 12.3.1 -Refer to Figure 12.3.1, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive industry.In the short run, the firm will A) exit from the industry. B) break even. C) make an economic profit. D) incur an economic loss. E) close down. Figure 12.3.1 -Refer to Figure 12.3.1, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive industry.In the short run, the firm will


A) exit from the industry.
B) break even.
C) make an economic profit.
D) incur an economic loss.
E) close down.

Correct Answer

verifed

verified

Use the figure below to answer the following question. Use the figure below to answer the following question. Figure 12.3.5 -Refer to Figure 12.3.5, which shows the cost curves and the marginal revenue curve for a perfectly competitive firm.To maximize its profit, the firm produces ________ units of output and the price is ________ a unit. A) 30; $40 B) 30; $30 C) 20; $40 D) 20; $30 E) 30; $32.50 Figure 12.3.5 -Refer to Figure 12.3.5, which shows the cost curves and the marginal revenue curve for a perfectly competitive firm.To maximize its profit, the firm produces ________ units of output and the price is ________ a unit.


A) 30; $40
B) 30; $30
C) 20; $40
D) 20; $30
E) 30; $32.50

Correct Answer

verifed

verified

Use the table below to answer the following question. Table 12.2.4 Use the table below to answer the following question. Table 12.2.4 -Refer to Table 12.2.4.The market is perfectly competitive and there are 1,000 firms that produce paper. The top table sets out the market demand schedule for paper. Each producer of paper has the costs shown in the bottom table when it uses its least-cost plant size. The market price is ________ a box and the market output is ________ boxes. The output produced by each firm is ________ boxes.Each firm ________. A) $7.00; 250,000; 250; incurs an economic loss of $1,000 a week B) $8.40; 350,000; 350; makes zero economic profit C) $7.65; 300,000; 300; incurs an economic loss of $834 a week D) $8.40; 350,000; 350; incurs an economic loss of $581 a week E) $7.65; 350,000; 300; makes zero economic profit Use the table below to answer the following question. Table 12.2.4 -Refer to Table 12.2.4.The market is perfectly competitive and there are 1,000 firms that produce paper. The top table sets out the market demand schedule for paper. Each producer of paper has the costs shown in the bottom table when it uses its least-cost plant size. The market price is ________ a box and the market output is ________ boxes. The output produced by each firm is ________ boxes.Each firm ________. A) $7.00; 250,000; 250; incurs an economic loss of $1,000 a week B) $8.40; 350,000; 350; makes zero economic profit C) $7.65; 300,000; 300; incurs an economic loss of $834 a week D) $8.40; 350,000; 350; incurs an economic loss of $581 a week E) $7.65; 350,000; 300; makes zero economic profit -Refer to Table 12.2.4.The market is perfectly competitive and there are 1,000 firms that produce paper. The top table sets out the market demand schedule for paper. Each producer of paper has the costs shown in the bottom table when it uses its least-cost plant size. The market price is ________ a box and the market output is ________ boxes. The output produced by each firm is ________ boxes.Each firm ________.


A) $7.00; 250,000; 250; incurs an economic loss of $1,000 a week
B) $8.40; 350,000; 350; makes zero economic profit
C) $7.65; 300,000; 300; incurs an economic loss of $834 a week
D) $8.40; 350,000; 350; incurs an economic loss of $581 a week
E) $7.65; 350,000; 300; makes zero economic profit

Correct Answer

verifed

verified

Use the table below to answer the following questions. Table 12.1.1 Use the table below to answer the following questions. Table 12.1.1 -Refer to Table 12.1.1 which gives the demand schedule for a perfectly competitive firm.If the firm sells 6 units of output, marginal revenue is A) $15. B) $30. C) $75. D) $90. E) $105. -Refer to Table 12.1.1 which gives the demand schedule for a perfectly competitive firm.If the firm sells 6 units of output, marginal revenue is


A) $15.
B) $30.
C) $75.
D) $90.
E) $105.

Correct Answer

verifed

verified

Use the table below to answer the following questions. Table 12.2.1 Use the table below to answer the following questions. Table 12.2.1 -Refer to Table 12.2.1, which gives the total revenue schedule and total cost schedule of a perfectly competitive firm.The short-run equilibrium price of one unit of the good is A) $3. B) $10. C) $15. D) $25. E) $30. -Refer to Table 12.2.1, which gives the total revenue schedule and total cost schedule of a perfectly competitive firm.The short-run equilibrium price of one unit of the good is


A) $3.
B) $10.
C) $15.
D) $25.
E) $30.

Correct Answer

verifed

verified

Use the figure below to answer the following questions. Use the figure below to answer the following questions. Figure 12.4.3 -Refer to Figure 12.4.3, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive market.In the long run, market A) demand will increase. B) demand will decrease. C) supply will increase. D) supply will decrease. E) demand and market supply will both increase. Figure 12.4.3 -Refer to Figure 12.4.3, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive market.In the long run, market


A) demand will increase.
B) demand will decrease.
C) supply will increase.
D) supply will decrease.
E) demand and market supply will both increase.

Correct Answer

verifed

verified

Use the figure below to answer the following questions. Use the figure below to answer the following questions. Figure 12.1.1 -Refer to Figure 12.1.1.The firm competes in a perfectly competitive market.Curve A represents the firm's A) total fixed cost curve. B) average fixed cost curve. C) average variable cost curve. D) total revenue curve. E) marginal revenue curve. Figure 12.1.1 -Refer to Figure 12.1.1.The firm competes in a perfectly competitive market.Curve A represents the firm's


A) total fixed cost curve.
B) average fixed cost curve.
C) average variable cost curve.
D) total revenue curve.
E) marginal revenue curve.

Correct Answer

verifed

verified

Use the information below to answer the following questions. Fact 12.4.2 Exxon Mobil Selling All Its Retail Gas Stations Exxon Mobil is not alone among Big Oil exiting the retail gas business, a market where profits have gotten tougher as crude oil prices have risen. Gas station owners say they're struggling to turn a profit because while wholesale gasoline prices have risen sharply, they've been unable to raise pump prices fast enough to keep pace. Source: Houston Chronicle, June 12, 2008 -Refer to Fact 12.4.2.Exxon Mobil's decision will ________ economic profit of other gasoline retailers, everything else remaining the same.


A) increase
B) decrease
C) not change
D) increase or not change
E) decrease or not change

Correct Answer

verifed

verified

Use the figure below to answer the following question. Use the figure below to answer the following question. Figure 12.3.4 -Refer to Figure 12.3.4, which shows cost curves of Paul's Picture Frames Inc.The picture frame market is perfectly competitive and the market price is $12 a frame.Paul produces ________ frames each week and makes ________ total revenue. A) 20; $240 B) 20; $96 C) zero; zero D) 30; $360 E) 30; zero Figure 12.3.4 -Refer to Figure 12.3.4, which shows cost curves of Paul's Picture Frames Inc.The picture frame market is perfectly competitive and the market price is $12 a frame.Paul produces ________ frames each week and makes ________ total revenue.


A) 20; $240
B) 20; $96
C) zero; zero
D) 30; $360
E) 30; zero

Correct Answer

verifed

verified

Assume that the leather market is a perfectly competitive market.The market demand curve for leather is ________ and each individual leather producer's demand curve is ________.


A) vertical; downward sloping
B) downward sloping; horizontal
C) downward sloping; vertical
D) horizontal; horizontal
E) horizontal; downward sloping

Correct Answer

verifed

verified

Use the information below to answer the following questions. Fact 12.2.1 Chevy Volt Production Temporarily Shut Down GM will temporarily lay off 1,300 employees as the company stops production of the electric car, Chevy Volt, for five weeks. GM had hoped to sell 10,000 Volts last year, but ended up selling just 7,671. It plans to maintain inventory levels by adjusting production to match demand. Source: Politico, March 2, 2012 -Refer to Fact 12.2.1.The shutdown decision maximizes GM's economic profit (or minimizes its loss) when price is less than


A) average variable cost.
B) total variable cost.
C) average fixed cost.
D) total fixed cost.
E) average total cost.

Correct Answer

verifed

verified

Showing 1 - 20 of 117

Related Exams

Exam 1

What Is Economics

212 Questions

Exam 2

The Economic Problem

159 Questions

Exam 3

Demand and Supply

198 Questions

Exam 4

Elasticity

186 Questions

Exam 5

Efficiency and Equity

121 Questions

Exam 6

Government Actions in Markets

130 Questions

Exam 7

Global Markets in Action

138 Questions

Exam 8

Utility and Demand

120 Questions

Exam 9

Possibilities, Preferences, and Choices

124 Questions

Exam 10

Organizing Production

111 Questions

Exam 11

Output and Costs

142 Questions

Exam 13

Monopoly

118 Questions

Exam 14

Monopolistic Competition

122 Questions

Exam 15

Oligopoly

106 Questions

Exam 16

Externalities

116 Questions

Exam 17

Public Goods and Common Resources

98 Questions

Exam 18

Markets for Factors of Production

252 Questions

Show Answer