chương 7 và 8

Firms in competitive market set a goal to

• maximize its total revenue.

• maximize its profit.

• .minimize its explicit costs.

• minimize its total cost

Thu Dung Company produced and sold 500 tires. The average cost of production per tire was $50. Each tire sold for a price of $65. Thu Dung Company’s total profits are

• $7,500.

• . $25,000.

• $32,500.

• $67,500

A production function shows realtionship between 

• cost and profit.

• inputs and output

• ouput and cost.

• output and profit.

The marginal product of labor can be caculated

• profit divided by the change in labor.

• output divided by the change in labor

• labor divided by the change in output

• labor divided by the change in total cost.

Costs that do not change with the quantity of output produced are known as:

• marginal costs.

• average costs

• fixed costs.

• explicit costs.

With firms that produces and sells cars, which the following costs would be a

variable cost?

• The firm pays the $30 million each year for accounting services

• The cost of the steel that is used in producing cars

• The firm pays rent for office space in Chicago

• All of the above are correct

Katy’s Cookie has average variable costs of $2 and average fixed costs of $3 when it produces 100 units of output (cookies). The firm's total cost is

• $100.

• $200.

• . $300.

• . $500.

To maximize profit, firms operating in competitive markets produce output levels where marginal revenue equals 

• price.

• average revenue.

• total revenue divided by output

• All of the above are correct.

Firm will maximize profit if it produce at level output that

• marginal revenue equals average total cost.

• marginal revenue equals average variable cost

• marginal revenue equals marginal cost.

• average revenue equals average total cost.

In competitive marrket, firm will shut down if price is

• less than average total cost.

• less than average variable cost

• . greater than average variable cost but less than average total cost.

• greater than marginal cost.