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Profit Quiz 3 (25 MCQs)

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1. As output of a firm increases, the difference between the firm's average total cost and its average variable cost gets smaller because the firm's
2. If the marginal revenue is less than the marginal cost then to profit maximize a firm should:
3. Which of the following ensures that a firm is earning economic profit?
4. The point of maximum profit is the point at which the marginal cost equals the
5. Chickens are laying double the eggs but people are buying them twice as often. What happens to the demand of eggs?
6. DVD sales are decreasing because more people are watching shows/movies online. What happens to the demand of DVD's?
7. When total physical product is at its maximum, marginal physical product must be:
8. A perfectly competitive firm is guaranteed to be profitable when it produces a level of output where
9. Which of the following is not a reason for firms to stay small in size
10. An investment purchased at a bank that pays a higher interest rate than both a savings and checking account. There will be a penalty for withdrawing early.
11. Average total cost is minimized by producing the level of output where the marginal cost
12. Who has a job fixing things for people?
13. A perfectly competitive firm is a price-taker because
14. What is the best definition of marginal cost?
15. What is most likely to rise as a firm expands?
16. According to the monopoly firm's optimal output rule, a monopoly firm should produce the quantity at which marginal cost is equal to
17. Which of the following is most likely to be an input that can be adjusted in the long run, but not in the short run?
18. Which of the following illustrates the concept of internal economies of scale?
19. What is true about marginal product, if total product is maximized?
20. Economists distinguish between Normal Profit and Supernormal Profit
21. Represents a piece of ownership in a company
22. Casey uses capital and labour in the production of cakes. When Casey doubled the capital and labour he used, he produced twice as many cakes. What did Casey experience?
23. A firm needs to make Normal Profit to Keep Operating in the Long Run
24. Movie ticket prices increase. What happens to the demand?
25. If a new tax on capital increases a firm's fixed cost of production, which of the following will occur in the short run?
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