AP Micro Unit 3

AP Micro Unit 3

Assessment

Flashcard

Other

12th Grade - University

Practice Problem

Hard

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20 questions

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1.

FLASHCARD QUESTION

Front

The demand curve for a perfectly competitive firm is:

Back

perfectly elastic.

2.

FLASHCARD QUESTION

Front

Zoe's Bakery determines that P < ATC and P > AVC. Zoe should:

Back

continue to operate even though she is taking an economic loss.

3.

FLASHCARD QUESTION

Front

What should you do? Options: Shut Down, Take loss but stay open, Stay open, Normal Profit, Stay open, Positive Economic Profit

Media Image

Back

Stay open, Normal Profit

4.

FLASHCARD QUESTION

Front

What should you do? Options: Shut Down, Stay open and take a loss, Stay open, Positive Economic Profit, Stay open, Normal Profit

Media Image

Back

Shut Down

5.

FLASHCARD QUESTION

Front

All of the following are essential characteristics of a perfectly competitive industry EXCEPT: All products produced by the firms in the industry are homogeneous. All firms in the industry are price takers. Price is equal to marginal revenue for every firm in the industry. There are barriers to entry into and exit from the industry.

Back

There are barriers to entry into and exit from the industry.

6.

FLASHCARD QUESTION

Front

Based on the cost and output data in the table shown, a perfectly competitive firm will shut down if price falls below: $15, $16, $18, $20

Media Image

Back

$15

7.

FLASHCARD QUESTION

Front

A profit-maximizing firm will shut down in the short run any time the firm’s total revenue is less than its:

Back

total variable cost

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