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Friday Chapter 14 Review

Authored by Michael Sheehan

Social Studies

9th - 12th Grade

Used 9+ times

Friday Chapter 14 Review
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18 questions

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1.

MULTIPLE SELECT QUESTION

45 sec • 1 pt

The individual price-taking firm faces …

(more than one answer is correct)

A perfectly inelastic demand curve

A horizontal demand curve

A perfectly elastic demand curve

A vertical demand curve

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Over the long run, which of the following statements is true about profit-maximizing firms in a perfectly competitive market?

Economic profits are zero

Economic profits are negative

Economic profits are positive

Accounting profits are zero

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Media Image

Suppose that at price P1, motorcycle manufacturers are making positive economic

profits. Assuming the market in motorcycles is perfectly competitive, which of

the following will occur in the long run?

The supply curve will shift to the right

The demand curve will shift to the right

Price will rise

Price will remain constant

Marginal costs will increase

4.

MULTIPLE SELECT QUESTION

45 sec • 1 pt

Media Image

Suppose now that motorcycle producers are making economic losses. Which of

the following will happen in the long run?

(more than one is correct)

Competitive pressures will drive economic profits toward zero

Some firms will exit the market

The supply curve will shift to the right

The price of motorcycles will rise

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Media Image

Suppose that competitive pressures drive the price of motorcycles downward.

Which of the following statements is an accurate description of the situation that

results?

Revenues and profits are reduced

Revenues fall, while profits remain constant

The supply curve shifts to the left

Marginal cost rises

The demand curve shifts to the right

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Media Image

In the figure, by increasing its output from Q1 toQ2, the firm

increases its profit

increases its marginal revenue

reduces its marginal revenue

decreases its profit

Answer explanation

At Q1, TR-TC=0

At Q2, TR-TC is positive

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Media Image

In the figure, by increasing its output from Q2 to Q3, the firm

increases its marginal revenue

reduces its marginal revenue

decreases its profit

increases its profit

Answer explanation

At Q2, TR-TC is positive.

At Q3, TR-TC is zero

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