For questions 1-3 refer to the graph below:
Question 1: The type of competition LEAST described by the graph above is:
A. monopolistic
B. perfect
C. imperfect
D. market
Question 2: What could this type of firm due to increase profit:
A. Increase production
B. Reduce marginal cost
C. Increase price
D. It is nearly impossible in the long run.
Question 3: Where would this firm produce at:
A. Point D
B. Point C
C. Point B
D. Point A
Question 4: A coal burning electricity plant generates enough electricity to light most of a state, but they also produce air pollution. The air pollution is referred to as:
A. Unnecessary risk
B. Negative externality
C. Marginal cost
D. Opportunity cost
Question 5: Carl’s Clothes sells 500 shirts a week at an average $10 a shirt. It costs them $100 a day to keep the doors open, what is their average revenue for the week?: *
A. $500,000
B. $5,000
C. $4,300
D. $1,000
Question 6: At the beginning of the year the CPI was 300, but during the year inflation rose 5%, what was the CPI at the end of the year:
A. 350
B. 450
C. 315
D. 300
Question 7: CPI or consumer price index is best described as:
A. The overall price level
B. The disposable income of an average family
C. The price for an set basket of goods
D. How much people are willing to buy on average
Question 8: Which of the following scenarios would explain a decrease in supply:
A. Cheaper inputs
B. An increase in price
C. Higher employment
D. Shortage of inputs
Question 9: An electronic firm has found that their MC is still positive, meaning that they should hire more employees. When is it economically sound to stop hiring:
A. When the MC = 0
B. When the MC < 0
C. Just before MC = 0
D. When MC = TC
Question 10: A firm’s costs are described by the equation: TC(Y) = U + V + X(Y). Which variable(s) represent fixed cost:
A. X and Y
B. TC
C. U and V
D. U