Biology Forums - Study Force

Assume a perfectly competitive firm sells its output for 150 per unit. At its current 2,000 units of output, marginal cost is 140 and increasing, and average variable cost is 143 . Assuming it wants to maximize its profits, it should:
 a. increase output.
 b. decrease output, but not shut down.
  c. maintain its current output rate.
 d. shut down.

QUESTION 2

Government policies designed to change the distribution of income to one that is more equal involve taking from the rich and giving to the poor.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 3

An increase in the cost of lumbering activities will:
 a. increase the quantity of wood supplied to the furniture market.
  b. decrease the quantity of wood supplied to the furniture market.
  c. decrease the supply of wood to the furniture market.
  d. increase the supply of wood to the furniture market.

QUESTION 4

Firms under perfect competition produce:
 a. homogeneous products.
  b. unique products.
  c. either standardized or differentiated products.
  d. differentiated products.
  e. antique products.

QUESTION 5

Assume that a firm's total revenue is less than its total cost for the level of output it is producing. In the short run, this firm should:
 a. expand output.
 b. contract output.
 c. shut down.
 d. There is not enough information to answer the question.

QUESTION 6

A proportional tax is a tax whose rate increases as the tax base widens.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 7

The area above the supply curve and below the market price represents:
 a. the consumer surplus
  b. the producer surplus.
  c. the deadweight loss of the producer.
  d. the deadweight loss of the consumer.

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All are correct

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