Basic economic

1. MC (Marginal cost) is large when output is …., but also when output is high due to lack of resources.

• A, Low

• B, High

• C, Equa

2. MR (Marginal revenue) falls steadily for many reason

• A, 3

• B, 4

• C, 2

3. The shape of the………………reflects the shape of the firm’s demand curve

• A. marginal revenue

• B. marginal cost

• C. total profit

4. If MR exceeds MC (MR>MC) , a 1 unit increase in output will:

• A: increase profits

• B: decrease profits

• C. no change profits

5. Profit maximization occurs when:

• A. MC > MR

• B. MR > MC

• C. MC = MR

6. TR = 3Q^2 - 14 => MR = ? (MR = TR' )

• A. 6Q

• B. 9Q

• C. 6Q- 14

• 9Q - 14

7. MC = 12Q + 11, MR = 75 - 20Q. The profit maximizing output ?

• A. 2

• B. 4

• C. 6

8. If a company had produced 2 hats with a total cost of $12, and now it produces more 3, total are 5 hats at a total cost of $24 . So, the marginal cost of producing that 1 additional unit of hat is :

• A. 3

• B. 2

• C. 4