The figure above shows a perfectly competitive firm. To maximize its profit, the firm will produce ________ units of output and the price will be ________ for a unit.
A) 30; 40
B) 30; 30
C) 20; 40
D) 20; 30
Ques. 2The indifference curves in the figure above (I1, I2, and I3 ) reflect Peter's consumption preferences. Peter prefers consuming ________ to consuming ________.
A) 48 slices of pizza and 12 chocolate bars; 24 slices of pizza and 24 chocolate bars
B) 40 slices of pizza and 20 chocolate bars; 48 slices of pizza and 12 chocolate bars
C) 24 slices of pizza and 24 chocolate bars; 40 slices of pizza and 20 chocolate bars
D) 32 slices of pizza and 8 chocolate bars; 16 slices of pizza and 16 chocolate bars
Ques. 3The opportunity cost of leisure is
A) the substitution effect.
B) the income effect.
C) a person's income.
D) a person's wage rate.
Ques. 4Antitrust law is the law that regulates ________ and prevents them from becoming ________.
A) oligopolies; monopolies
B) monopolies; oligopolies
C) monopolistically competitive firms; oligopolies
D) oligopolies; monopolistically competitive firms
Ques. 5In the figure above, compared to a perfectly competitive industry with the same costs, a single-price, unregulated monopoly will decrease production by
A) zero.
B) 2 units per day.
C) 4 units per day.
D) 6 units per day.
Ques. 6In the long run, monopolistically competitive firms make zero economic profit because of
A) excess capacity.
B) product variety.
C) easy entry and exit.
D) government regulation.
Ques. 7The above table shows some cost data for Tracey's Tents. What is the marginal cost of the 3rd tent?
A) 25
B) 20
C) 70
D) 120
Ques. 8Suppose the government has declared beer to be an illegal substance and imposes a fine on anyone caught buying a beer. Selling beer, however, remains legal.
Using the above figure, in which CBL is the cost of breaking the law, what is the equilibrium price and quantity with this new law in effect? A) 5 per quart and 300 quarts of beer
B) 3 per quart and 500 quarts of beer
C) 3 per quart and 100 quarts of beer
D) 1 per quart and 300 quarts of beer
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