1. By definition, a fixed input: (a) Cannot be varied in quantity within a specific period of time (b) Can always be varied within a specific window of time (c) Never costs more than a variable input (d) Always costs more than a variable input 2. For a firm, the long-run is: (a) A period of more than 1 year (b) A period of more than 10 years (c) A period of time when all inputs are variable (d) A period of time when at least one input is fixed 3. Average total cost is total cost divided by: (a) The # of inputs (b) Quantity produced (c) Price (d) The # of firms 4. Marginal cost measures: (a) The rate at which average total cost changes as quantity produced changes (b) The rate at which total cost changes as price changes (c) The rate at which total cost changes as quantity produced changes (d) The rate at which fixed cost changes as quantity produced changes Refer to the figure below to answer the following questions 5. From the figure above, the firm earns economic profit from producing the ard unit of output: (a) 1 (b) - 1 (c) 0 (d) There is not enough information to answer this questionRefer to the figure below to answer the following questions 6. This firm is earning economic profit at it profit-maximizing level of output (a) Zero (b) Positive (c) Negative (d) There is not enough information to answer this question 7. This firm is operating in the: (a) Long run (b) Short-run (c) Medium-run (d) There is not enough information to answer this question B. At this firm's profit-maximizing level: (a) p= mr (b) p = me (c) p mc 4. This firm is better of shutting down if it wishes to maximize profits. (a) True (b) FalseRefer to the figure below to answer the following questions 10. This firm is earning economic profit at it profit-maximizing level of output (a) Zero (b) Positive (c) Negative (d) There is not enough information to answer this question 11. This firm is better of shutting down if it wishes to maximize profits. (a) True (b) False Refer to the figure helow to answer the following questions 12. For a competitive firm, the red lines in the figure above trace out (approximately) its: (a) Marginal costs (b) Short-run supply curve (c) Long-run supply curve 3 (d) Zero-profit points13. The vertical distance between the ATC and AVC curve declines as output increases be- (a) There is no reason why they should converge (b) AFC declines as output increase's (c) Prices decline as supply increases (d) Firms become more productive as output increases 14. What level of economic profit, 7, will this firm be earning at its profit-maximizing quantity of output? (a) 1=0 (b) = = -fc (0) =30 (d) There is not enough information to answer the question Refer to the figure below to answer the following questions P= mr 1.5 25 15. How much should this firm produce in order to maximize profits? (a) 0 (b) 1.5 (c) 2.5 (d) There is not enough information to answer the question 16. What level of economic profit, a, will this firm be earning at its profit-maximizing quantity of output? (a) 1=0 (b) = -fc (0) =30 (d) There is not enough information to answer the question20. At p" quantity demand is: (a) Less than quantity supplied (b) Greater than quantity supplied (c) Equal to quantity supplied (d) There is not enough information to answer the question Refer to the figure below to answer the following questions: Market for Widgets 21. A shift in the demand curve for widgets from D to D' may reflect: (a) A decrease in marginal utility from widgets (b) An increase in marginal utility from widgets (c) Rising production costs for widgets (d) Falling production costs for widgets 22. A shift in the demand curve from D to D' could be explained by: (a) A shift in tastes in favor of widgets (b) The rise in price of complements in consumption of widgets (c) Rising production costs for widgets (d) Falling production costs for widgets 23. A shift in demand from D to D' results in a decline in market price from p to p' because: (a) Dissatisfied buyers at p" will compete with one another by bidding down price (b) Dissatisfied sellers at p" will compete with one another by bidding up price (c) Dissatisfied sellers at p" will compete with one another by bidding down price (d) There is not enough information to answer the questionMarket for Eggs 24. The shift in supply from 5 to S' may reflect: (a) Decreased tastes for omlets (b) Increased tastes for omlets (c) The rising marginal cost of producing eggs in response to increased cases of bird flu (d) The declining marginal cost of producing eggs in response to improved vaccines against bird flu 25. The shift in supply from 5 to S" and the resulting change in market price will: (a) Reduce consumer surplus (b) Increase consumer surplus (c) Have no impact on consumer surplus (d) There is not enough information to answer the questionP= MF 17. This firm is earning - at its profit-maximizing level of output: (a) Positive economic profit (b) Zero economic profit (c) Negative economic profit (d) There is not enough information to answer the question 18. This firm would produce additional output if: (a) AFC declines (b) Marginal cost increases (c) ATC increases (d) Market price rises Refer to the figure below to answer the following questions: 19. p" reflects: (a) Surplus price (b) Equilibrium price (c) Shortage price 5