Question

4. Figure 6-10 link: https://imgur.com/a/KNpbC4H

Choose and explain your answer thoroughly with math--graphical, algebraically, numerically.

The firm depicted inFigure 6-10currently is producing 200 units of output per day. If it decides to increase its output level to 375 units, then it will:

a. adjust from point F to point G in the short run

b. be unable to adjust to point G in the short run because some inputs are fixed

c. be unable to adjust to point G in the long run because some are fixed

d. be unable to adjust to point H in the short run because some inputs are fixed

e. adjust from point F to point H in the long run

5. Figure 7.13 link: https://imgur.com/a/6CmnrNB

Consider the marginal revenue and marginal cost curves shown inFigure 7.13. Assume that the firm represented is able to cover its variable costs if it operates in the short run. What is the firm's optimal output level? Choose and explain your answer thoroughly with math--graphical, algebraically, numerically.

a. 150 units

b. 80 units

c. 50 units

d. less than 50 units

e. between 50 and 80 units

6)Figure 8.7 link: https://imgur.com/a/lNhDKNu

6a) Figure 8.7shows cost curves for Penny's Parasols, a perfectly competitive firm. At which of the point would Penny's Parasols be certain to close down?

A,B,C,D, or E.Explain:

6b) Figure 8.7shows cost curves for Penny's Parasols, a perfectly competitive firm. At which point(s) would Penny's Parasols endure economic losses, but continue to produce in the short run?

D,F,A,C, or E.Explain:

6c) Which point inFigure 8.7represents a break-even situation for a perfectly competitive firm?

A,B,C,D, or E.Explain:

6d) At which point inFigure 8.7would a perfectly competitive firm earn the same profit, or suffer the same loss, by producing rather than by shutting down?

A,B,C,D, or F.Explain:

Choose and explain your answer above thoroughly--graphical, algebraically, numerically.

7) Figure 8.8 link: https://imgur.com/a/dDuGVq9

7.a) In short-run equilibrium, the perfectly competitive firm ofFigure 8.8earns a total economic profit of

a.1000

b.$950

c.$825

d.$1,425

e.$575

Explain:

7.b) Assuming the perfectly competitive firm ofFigure 8.8survives in the long-run, it produces

a. 200

b. 275

c. 475

d. 575

e. None of the above

Explain:

Choose and explain your answer above thoroughly--graphical, algebraically, numerically.