Biology Forums - Study Force

A perfectly competitive firm maximizes profits or minimizes losses in the short-run by producing at the output level at which:
 a. marginal revenue equals marginal cost.
  b. total revenue equals total cost.
  c. total revenue is at a maximum.
  d. none of these.

QUESTION 2

When economists look at the percentage change in quantity demanded generated by a change in income, they are looking at:
 a. price elasticity of demand.
  b. income elasticity of demand.
  c. price elasticity of supply.
  d. cross elasticity of demand.
  e. cross elasticity of supply.

QUESTION 3

A perfectly competitive firm in the short-run can earn:
 a. positive economic profits.
  b. negative economic profits.
  c. zero economic profits.
  d. all of these are possible

QUESTION 4

If a consumer's purchases of a product increases as income increases, this good is classified as a(n):
 a. superior good.
  b. inferior good.
  c. substitute good.
  d. complementary good.
  e. normal good.

QUESTION 5

In the short run, a perfectly competitive firm's most profitable level of output is where:
 a. total revenue minus total cost is at a maximum.
  b. marginal cost equals marginal revenue.
  c. Both of the above.
  d. Neither of the above.

QUESTION 6

If we measure the income elasticity of a good as 1.8, this means this good is a(n):
 a. luxury good.
  b. substitute good.
  c. complementary good.
  d. inferior good.
  e. good from the food group.

QUESTION 7

A perfectly competitive firm in the short-run maximizes its profit by producing the output where:
 a. marginal cost equals price.
  b. marginal cost equals marginal revenue.
  c. total revenue minus total cost is at a maximum.
  d. all of these.

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