Consider the following graph of an individual firm in a perfectly competitive market. Price and Cost /ATC P Quantity (a) As MR curve is below the ATC curve, does the firm make a profit or a loss? [ Select ] (b) In long run, will the market price increase or decrease? [ Select ] Question 15 2 pts Refer to the following graph. If the firm maximizes profit, calculate the total cost (TC). Answer: The total cost = $Price $5i3 $42 3G 27" $15 3E] 45 Eli] Cilia ntlt'jr Question 16 3 pts Suppose the wages per worker paid by a firm decreases. (i) Will this affect the MC curve of the firm? [Select] V (ii) Will the ATC curve of the firm shift up or shift down? [ Select] v Question 17 2 pts The accompanying table represents the quantity produced, the total revenue, and the total cost of a firm operating in a perfectly competitive market. Find the profit-maximizing quantity. Total Revenue Total Cost _ l_ I_ _I_ :-$24 $20 Question 18 2 pts Refer to the accompanying table. Find the market price such that the firm makes 0 economic profits. (Hint: ATC = AFC + AVC) Answer: The firm makes 0 economic profits if the market price = $ Question 19 2 pts Suppose a perfectly competitive paper firm can produce 10 tons of paper at an output level where marginal revenue is equal to marginal cost. The price per ton of paper is $100 and the average total cost is $75. How much is the maximized profit? Answer: The maximized profit = $ Question 20 2 pts Susan is willing to pay $65 for a new pair of shoes. Mary is willing to pay $50 for the same shoes. The shoes have a price of $45. What is the total consumer surplus for Susan and Mary? Answer: The total consumer surplus = $ Question 21 6 pts Consider the following graph. arc/arcqu'mc (a) What is the value of Q when MC is at its minimum? [Select] v (b) When Q increases, does AFC decrease? [Select] V (c) What is the vertical gap between ATC and AVC? [Se'ect] V (01) Find the range of Q such that ATC is increasing with Q. [ Select] v Question 22 2 pts Consider the following table which shows the demand and supply of good M. Find the shortage if a price ceiling = $1.00 is imposed. Quantity demanded of good M Quantity supplied of good M 100,000 65,000 92 , 000 80 .000 $1.25 86,000 86,000 $1.50 80,000 100,000 75,000 115,000 $2.00 68.000 116,000 Firm A sells pizzas. Assume that the market for pizzas is perfectly competitive. The following shows the graph for firm A. Use the given information to answer questions 23 - 28. Question 23 0 pts (This is a bonus question. This question is worth 2 points.) According to the above graph, does firm A operate in short run or in long run? Explain. cFirm A operates in long run because there is no variable cost. cFirm A operates in long run because the rm currently suffers a loss. cFirm A operates in short run because the firm currently makes a profit. cFirm A operates in short run because the MR curve is a horizontal straight line. Question 24 2 pts Find the quantity of output when firm A maximizes profit. Question 25 2 pts Calculate the total revenue when rm A maximizes profit. Answer: The total revenue = $ Question 26 2 pts Calculate the maximized profit. Answer: The maximized profit = $ Question 27 1.5 pts How much is the profit made by the firm in long run if the firm maximizes profit? Answer: The maximized profit in long run = $ Question 28 1.5 pts How much is the MR in long run? Answer: The MR in long run = $ Consider the market for aluminum. There is only one seller in the market for aluminum. Use the given information to answer questions 29 - 34. Price $110 . $10 $25 320 MC 4m] sun 30\" BSD Quantity Question 29 0 pts (This is a bonus question. This question is worth 3 points.) Explain why the market for aluminum can be dominated by one firm. Edit View Insert Format Tools Table \"100% 12pt v Paragraph v p 0 words Question 30 2 pts The firm maximizes profit, what is the price charged by the firm? Answer: The price charged by the firm = $ Question 31 2 pts The firm maximizes profit, how much is the quantity of output? Question 32 2 pts How much is the maximized profit? Answer: The maximized profit = $ Question 33 2 pts Suppose the firm maximizes profit. Calculate the CS. (Don't forget to multiply 0.5 for calculating the area of a triangle) (Hint: CS is the area between the demand curve and price paid) Answer: The CS = $ Question 34 2 pts Suppose the government regulates the firm such that the firm makes a zero profit. Find the quantity of output sold by the firm. C400 (3600 (3300 (31,000 Consider the market for beer as shown below. Use the given information to answer questions 35 - 37. Question 35 1.5 pts Suppose the government imposes a price floor of $8 on beer, how much is the black-market price? (Hint: Find the quantity supplied and the willingness to pay.) Answer: The black-market price = $ Question 36 2 pts The government imposes a price floor of $8 on beer. If the government buys back the surplus beer, how much does the government need to spend to buy back the surplus beer? Answer: The government needs to spend $ Question 37 1.5 pts Suppose the government removes a binding price floor, will the quantity supplied increase or decrease? [ Select ] v Use the following table to answer questions 38 - 41. Q TC MC ATC AVC 0 30 80 N 120 3 155 4 195 5 245 6 300 7 385 8 485 Question 38 2 pts How much is the TFC? (Hint: When Q = 0, how much is the TC?) Answer: TFC = $ Question 39 2 pts How much is the ATC when Q = 5? Answer: ATC = $. Question 40 2 pts How much is the AVC when Q = 2? Answer: AVC = $_ Question 41 2 ptsHow much is the MC when Q = 7? Answer: MC = $ A store sells good A. The market price of good A is $40. It has the following cost and output structure. Assume the market for good A is perfectly competitive. Use the given information to answer questions 42 - 46. Output Total cost 0 $50 80 2 100 3 120 4 145 175 6 210 250 8 335 Question 42 2 pts How much is the MR? Answer: MR = $. Question 43 2 pts Find the total revenue when Q = 2. Answer: total revenue = $. Question 44 2 pts Find the profit-maximizing output.Question 45 2 pts Find the maximized profit. Answer: The maximized profit = $ Question 46 1.5 pts Suppose the market price of good A increases, will the maximized profit made by the firm increase or decrease? [Select] v Atax is imposed on a market for a good as shown in the graph below. 81 is the supply curve before the tax is imposed, and S2 is the supply curve after the tax is imposed. Use the following graph to answer questions 47 - 51. 55' 55 Quantity Question 47 1 pts Is the tax levied on buyers or sellers? [Se'eCt] v Question 48 2 pts Find the price paid by the buyers after the tax is imposed. Answer: The price paid by the buyers after tax = $ Question 49 1.5 pts Find the tax burden on buyers per unit of quantity? Answer: The tax burden on buyers per unity of quantity = $ Question 50 2 pts Calculate the PS after tax. (Don't forget to multiply by 0.5 to get the area of a triangle.) Answer: PS after tax = $ Question 51 2 pts Calculate the DWL after tax. (Don't forget to multiply by 0.5 to get the area of a triangle.) Answer: DWL after tax = $ No new data to save. Last checked at 1:23pm Submit Quiz