Problem 1.) Demand for the services of Derek Jeter is?
a) horizontal.
b) unrelated to his true productivity.
c) an output demand.
d) derived from the demand for Yankee's tickets when Jeter plays.
Problem 2.) Total cost is calculated as?
a) the sum of total fixed cost and total variable cost.
b) the product of average total cost and price.
c) the sum of all the firm's explicit costs.
d) the sum of average fixed cost and average variable cost.
Problem 3) In the short run, as output increases?
a) the difference between average total cost and average variable cost decreases.
b) the difference between total cost and average variable cost decreases.
c) marginal cost eventually decreases.
d) All of the above are correct.
Problem 4) A firm earns an operating profit if?
a) revenues exceed variable costs of production.
b) revenues equal fixed costs.
c) price is less than average variable costs of production.
d) price equals marginal cost.
Problem 5) Perfectly competitive firms must make all of the following decisions EXCEPT ?
a) how much output to supply.
b) which production technology to use.
c) how much of each input to demand.
d) what price to charge for its output.