Given a perfectly competitive market structure at the profit-maximizing output level, a firm's ...

Given a perfectly competitive market structure at the profit-maximizing output level, a firm's total fixed cost is 15, total variable cost is 137, marginal revenue is 4, and the quantity demanded is 65 . The total profit earned by the firm is 108.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 2

Average cost regulation of a natural monopoly does not involve:
 a. production at a socially inefficient level of output.
 b. a tendency for average total cost curves to shift upward over time.
 c. a subsidy.
 d. production at the output level at which demand intersects the average total cost curve.

QUESTION 3

A customs union is an organization of nations whose members:
 a. have impenetrable trade barriers among themselves but impose no trade barriers on nonmembers.
  b. have no trade barriers among themselves but impose common trade barriers on nonmembers.
  c. have no trade barriers among themselves but each member country chooses its own trade policies with nonmember countries.
  d. retaliate each other by raising reciprocal tariffs and calling for fair trade.
  e. neither have trade barriers among themselves nor impose any restriction on the nonmember countries.

QUESTION 4

Assume that the world price of Commodity X is 9 per unit while its domestic price is 8, and the marginal cost of production is 6 per unit. If the government imposes a price ceiling of 7 on domestic output:
 a. the import of Commodity X from the world market would stop.
  b. the world price of Commodity X would decline.
  c. a surplus of Commodity X would accumulate in the domestic market.
  d. a shortage of Commodity X would be observed in the domestic market.

QUESTION 5

When a perfectly competitive firm's demand curve lies above its average total cost curve, the firm incurs an economic loss at that level of output.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 6

Average cost regulation of a natural monopoly:
 a. generates economic losses for the seller.
 b. necessitates a subsidy payment to the firm.
 c. creates incentives that tend to shift ATC curves in an upward direction.
  d. imposes a price that is less than marginal cost.

QUESTION 7

Agreements to abolish most barriers to trade among nations are known as:
 a. collusive trade agreements.
  b. discriminatory trade agreements.
  c. neutral trade agreements.
  d. preferential trade agreements.
  e. retaliatory trade agreements.