This quiz works best with JavaScript enabled. Home > Finance > Profit > Profit – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Profit Quiz 5 (10 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. 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? A) Decreasing returns to scale. B) Diminishing returns. C) Constant returns to scale. D) Coordination costs. Show Answer Correct Answer: C) Constant returns to scale. 2. A firm needs to make Normal Profit to Keep Operating in the Long Run 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. 3. Movie ticket prices increase. What happens to the demand? A) The demand goes up. B) The demand goes down. C) The demand stays the same. D) None of above. Show Answer Correct Answer: B) The demand goes down. 4. If a new tax on capital increases a firm's fixed cost of production, which of the following will occur in the short run? A) Average total cost will increase. B) Marginal cost will increase. C) Average variable cost will increase. D) The profit-maximizing level of output will increase. Show Answer Correct Answer: A) Average total cost will increase. 5. If a monopolist is charging a price such that marginal revenue is greater than marginal cost, then the monopolist A) Will be earning profit. B) Will be earning loss. C) Can improve its profit by reducing its price. D) Can improve its profits by raising its price. Show Answer Correct Answer: C) Can improve its profit by reducing its price. 6. Firms can only pursue other objectives apart from profit maximisation if they are making at least normal profit. A) That is a fallacy. B) True. C) False. D) It depends.. Show Answer Correct Answer: B) True. 7. Producers must understand the marginal benefit of making an additional unit, which shows the A) Actual gain. B) Eventual gain. C) Possible gain. D) Unlikely gain. Show Answer Correct Answer: C) Possible gain. 8. By investing in many companies, mutual funds increase the chance of buying stocks that will be A) Risky. B) Equitable. C) Profitable. D) Aggressive. Show Answer Correct Answer: C) Profitable. 9. A CD is a? A) Color Display. B) Call Data. C) Concept Definition. D) Certificate of Deposit. Show Answer Correct Answer: D) Certificate of Deposit. 10. Profit-maximising output level occurs when MC=MR. This is known as the "MC = MR profit-maximising rule" . 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. ← PreviousRelated QuizzesFinance QuizzesProfit Quiz 1Profit Quiz 2Profit Quiz 3Profit Quiz 4 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books