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AP Micro - Unit 3 Review Flashcards | StudBud
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AP Micro - Unit 3 Review
AP Micro - Unit 3 Review
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#AP Micro, #Short-run costs, #Long-run costs, #perfect competition, #theory of the firm
Flashcards
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Questions
27
Answers
1
If marginal cost is less than average total cost then
ATC is decreasing.
ATC is increasing.
MC is decreasing.
MC is increasing.
2
The price elasticity of demand for any particular perfectly competitive firm's output is
less than 1.
equal to one.
infinite.
equal to zero.
3
All of the following are characteristics of perfect competition EXCEPT
many firms.
firms are price takers.
homogeneous product.
significant barriers to entry.
4
From points A to C the firm is incurring
constant returns
negative returns
decreasing returns
increasing returns
5
A perfectly competitive firm's demand curve is best described as
perfectly inelastic
perfectly elastic
upward sloping
downward sloping
6
In the table, the price of the product is
$20
$400
$10
$100
7
The firm's short run supply curve is the
MC above price C
ATC above price C
MC above price B
AVC above price B.
8
Productive efficiency means that
P = minimum of AVC
P = MC
P = minimum of ATC.
P = MR
9
At point C on the graph the firm is beginning to enter
constant returns
negative returns
decreasing returns
increasing returns
10
A production function shows how
the government regulates production.
inputs are converted in outputs.
outputs are used to produce inputs.
perfect competition is very efficient.
11
At price "p", in the short run this firm will
earn a loss but continue to produce.
earn positive profits.
shut down.
exit the market.
12
A firm maximizes profits by producing the quantity found where
marginal revenue = marginal cost
total revenue = total cost
price = marginal revenue
marginal cost is minimized
13
Another name for an opportunity cost (or a cost we do not see is)
an explicit cost.
an implicit cost.
fiscal cost.
out of pocket cost.
14
The measure of how much more we can produce if we hire just one more worker is
variable product.
average product.
marginal product.
total product.
15
In perfect competition, efficiency is generally attained in
both the short-run and long-run.
only in the long-run.
neither the short-run or long-run.
only the short run.
16
A profit maximizing firm producing 10 units with an ATC of $17 that sell for $25 each will earn
per unit losses of $8.
total losses of $250.
total profits of $80.
total profits of $250.
17
When the firm increases production from 200 units to 300 units it is experiencing
diseconomies of scale
economies of scale
constant returns to scale
18
Which of the following defines the short run?
when all inputs are fixed
when at least one input is fixed
when all inputs are variable
when at least one input is variable
19
Ray quits his $40k/yr teaching job to open a cafe and brings in $40k after costs, his profit is
$40k according to economists
$0 according to accountants
$20k according to accountants
$0 according to economists
20
If a firms's long run average total costs are falling as output increases it has entered
constant returns to scale
economies of scale
diseconomies of scale
21
Economic profit is total revenue minus
marginal costs.
total cost.
average variable costs.
fixed costs.
22
Your accountant does not factor in __________ ___________ when measuring profit.
economic profit
variable costs
opportunity costs
economic loss
23
When a firm's output is zero, total cost equals
variable cost.
marginal cost.
zero.
fixed cost.
24
What will happen to the long-run?
The market price will decrease
The firm's output will decrease.
Firms will enter the market.
Firms will exit the market.
25
A technological change that increases productivity shifts the ______ curve(s) upward
marginal product (MP)
average product (AP)
TP,MP,and AP
total product (TP)
26
The formula for Total Cost is
TC=TFC+TVC
TC=TMC+TVC
TC=MC+FC
TC=MC+VC
27
Which of the following is always considered the long-run?
1 year.
6 months.
when all costs are variable.
when all costs are fixed.
