Refer to Figure 12-18. Use the figure above to answer the following questions
a. How can you determine that the figure represents a graph of a perfectly competitive firm? Be specific; indicate which curve gives you the information and how you use this information to arrive at your conclusion.
b. What is the market price?
c. What is the profit-maximizing output?
d. What is total revenue at the profit-maximizing output?
e. What is the total cost at the profit-maximizing output?
f. What is the profit or loss at the profit-maximizing output?
g. What is the firm's total fixed cost?
h. What is the total variable cost?
i. Identify the firm's short-run supply curve.
j. Is the industry in a long-run equilibrium?
k. If it is not in long-run equilibrium, what will happen in this industry to restore long-run equilibrium?
l. In long-run equilibrium, what is the firm's profit maximizing quantity?
a. The perfectly competitive firm is a price taker and therefore faces a perfectly elastic demand curve which is also the MR curve.
b. Market price = $40
c. Profit maximizing output = 200
d. Total revenue = $40 × 200 = $8,000
e. Total cost = ATC × total output = $24 × 200 = $4,800
f. Profit = Total revenue - total cost = $8,000 - 4,800 = $3,200
g. Total fixed cost = AFC × total output = (ATC - AVC) × 150 = $6 × 150 = $900. (Note: fixed cost has the same value at all output rates)
h. The total variable cost at the profit maximizing output level = ($4,800 -
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In defining money according to the transactions approach, you would want to include
A) those assets that are used as a unit of account. B) those assets that are used as a store of value. C) those assets that are used as a medium of exchange. D) those assets that are used as a standard of deferred payment.
Refer to Figure 10-2. Which of the following is consistent with the graph depicted above?
A) New government regulations decrease the profitability of new investment. B) The government runs a budget surplus. C) An expected expansion increases the profitability of new investment. D) There is a shift from an income tax to a consumption tax.
Suppose that X and Y are complementary goods. If the price of good X decreases, we can expect the:
a. demand for good X to increase. b. quantity demanded of good Y to decrease. c. quantity demanded of good Y to increase. d. demand for good Y to decrease. e. demand for good Y to increase.
(Last Word) Theft and burglary:
A. can be viewed as attempts to maximize utility, given certain marginal costs and marginal benefits. B. are examples of irrational behavior. C. are applications of the law of increasing opportunity cost. D. are less economically rational than crimes of passion and violence.