This quiz works best with JavaScript enabled. Home > Finance > Profit > Profit – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Profit Quiz 4 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The point of maximum profit is the point at which the marginal cost equals the A) Marginal revenue. B) Market price. C) Total revenue. D) Production cost. Show Answer Correct Answer: A) Marginal revenue. 2. Chickens are laying double the eggs but people are buying them twice as often. What happens to the demand of eggs? A) The demand goes up. B) The demand goes down. C) The demand stays the same. D) None of above. Show Answer Correct Answer: C) The demand stays the same. 3. DVD sales are decreasing because more people are watching shows/movies online. What happens to the demand of DVD's? A) The demand goes up. B) The demand goes down. C) The demand stays the The demand The demand stays the same. D) None of above. Show Answer Correct Answer: B) The demand goes down. 4. How are total costs calculated A) $ \frac{variable\ \cos t}{quantity}$. B) $ \frac{fixed\ \cos t}{quantity}$. C) $ \frac{\left(fixed\ \cos t\ +\ variable\ \cos t\right)}{quantity}$. D) $ fixed \cos t+variable \cos t$. Show Answer Correct Answer: D) $ fixed \cos t+variable \cos t$. 5. When total physical product is at its maximum, marginal physical product must be: A) Greater than one. B) Equal to one. C) Equal to zero. D) Less than one. Show Answer Correct Answer: C) Equal to zero. 6. A perfectly competitive firm is guaranteed to be profitable when it produces a level of output where A) Marginal revenue is equal to price. B) Price is greater than average fixed cost. C) Price is greater than average variable cost. D) Price is greater than average total cost. Show Answer Correct Answer: D) Price is greater than average total cost. 7. Which of the following is not a reason for firms to stay small in size A) Market has a small or niche demand. B) Production of good requires high degree of personalisation. C) Average cost increases as firm expands output. D) MES occurs at a very large output. Show Answer Correct Answer: D) MES occurs at a very large output. 8. 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. A) Cash on Deposit. B) Certificate of Money. C) Stock. D) Certificate of Deposit. Show Answer Correct Answer: D) Certificate of Deposit. 9. Average total cost is minimized by producing the level of output where the marginal cost A) Is minimized. B) Curve intersects the average total cost curve. C) Curve intersects the fixed cost curve. D) Curve intersects the marginal revenue curve. Show Answer Correct Answer: B) Curve intersects the average total cost curve. 10. Who has a job fixing things for people? A) Plumber. B) Mechanic. C) Electrician. D) All of the above. Show Answer Correct Answer: D) All of the above. 11. A perfectly competitive firm is a price-taker because A) The government sets its price. B) It produces a differentiated product. C) A larger firm sets the price for the industry. D) Intense competition prevents it from influencing the market price. Show Answer Correct Answer: D) Intense competition prevents it from influencing the market price. 12. What is the best definition of marginal cost? A) The possible income from producing an additional item. B) The price of producing one additional unit of a good. C) The additional income gained from selling an additional good. D) The financial gain from business activity minus expenses. Show Answer Correct Answer: B) The price of producing one additional unit of a good. 13. What is most likely to rise as a firm expands? A) Energy costs per unit of output. B) The cost of components. C) The cost of monitoring workers. D) The rate of interest paid on borrowing. Show Answer Correct Answer: C) The cost of monitoring workers. 14. According to the monopoly firm's optimal output rule, a monopoly firm should produce the quantity at which marginal cost is equal to A) Total cost. B) Average variable cost. C) Marginal revenue but not price. D) Marginal revenue and price. Show Answer Correct Answer: C) Marginal revenue but not price. 15. 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? A) Industrial sized oven that is used to bake bagels. B) Natural gas to power the ovens. C) The yeast, an ingredient, used in the dough. D) The workers in the bakery. Show Answer Correct Answer: A) Industrial sized oven that is used to bake bagels. 16. Which of the following illustrates the concept of internal economies of scale? A) Falling average cost as output increases. B) Falling average cost as the industry expands. C) Falling fixed cost as output increases. D) Rising average cost as output increases. Show Answer Correct Answer: A) Falling average cost as output increases. 17. What is true about marginal product, if total product is maximized? A) Marginal product is negative. B) Marginal products is positive. C) Marginal product equals zero. D) Marginal product is increasing. Show Answer Correct Answer: C) Marginal product equals zero. 18. What is the definition of expenses? A) The money from selling goods and services. B) Cash you are spending in the business. C) Costs of running the business. D) The outgoings relating specifically to vehicles. Show Answer Correct Answer: C) Costs of running the business. 19. Economists distinguish between Normal Profit and Supernormal Profit A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 20. Represents a piece of ownership in a company A) Single Stock. B) Viaticals. C) Bond. D) CD. Show Answer Correct Answer: A) Single Stock. ← PreviousNext →Related QuizzesFinance QuizzesProfit Quiz 1Profit Quiz 2Profit Quiz 3Profit Quiz 5 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books