Giuseppe's Pizza is a perfectly competitive firm. The firm's costs are shown in the table above. If the market price is 15, the firm will
A) shut down.
B) leave the market in the long run.
C) stay in the market in the long run.
D) make an economic profit.
Ques. 2A firm has excess capacity if its output is
A) less than the quantity at which marginal cost is minimized.
B) less than the quantity at which economic profit is maximized.
C) less than the quantity at which average total cost is minimized.
D) more than the quantity at which average total cost is minimized.
Ques. 3The figure above shows the labor demand and labor supply curves for workers in local fast-food restaurants. The fast-food restaurant industry is competitive. A decrease in the supply of labor shifts the labor supply curve from LS0 to LS1.
Fast-food restaurants hire ________ and total labor income earned by the fast-food workers ________. A) 40 hours of labor a day; increases
B) 30 hours of labor a day; decreases
C) 40 hours of labor a day; decreases
D) 30 hours of labor a day; increases
Ques. 4If the price of a ticket to Sea World exceeds the marginal cost of the ticket by 13, a producer surplus exists for Sea World. Is this statement true or false?
What will be an ideal response?
Ques. 5If the above figure illustrated a perfectly competitive industry, the equilibrium market output would be equal to
A) 7.
B) 11.
C) 13.
D) 22.
Ques. 6Propecia was developed to treat mild to moderate male pattern hair loss in men. Marco has hair loss and he is willing to pay any amount of money to be able to buy this drug each month. Marco's price elasticity of demand is ________.
A) perfectly inelastic
B) perfectly elastic
C) elastic
D) inelastic
Ques. 7If the x-axis variable increases while the y-axis variable decreases, the variables x and y are negatively related.
Indicate whether the statement is true or false
Ques. 8Steve owns a motorcycle valued at 5,000 and that is his only asset. There is a 5 percent chance that Steve will have an accident within a year. If he does have an accident, his motorcycle is worthless.
Steve's utility of wealth curve is shown in the figure above. An insurance company agrees to pay Steve the full value of his motorcycle in case of an accident if he buys the company's insurance policy. The company's operating expenses are 500 per policy. What is the minimum premium that the insurance company will accept? A) 1,000
B) 2,000
C) 500
D) 1,500
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