Production Theory & Customer choices

A firm’s total revenue is $4,000 and total cost is $2,500. What is its economic profit?

• $1,500

• $2,000

• $1,000

• $2,500

• $500

If P = $50, Q = 100, what is total revenue?

• $4,000

• $5,000

• $6,000

• $3,000

• $2,000

If TC = $600 and Q = 20, what is the average total cost (ATC)?

• $30

• $20

• $25

• $15

• $10

A firm's AVC = $20, ATC = $30, and Q = 10. What is the total fixed cost (TFC)?

• $100

• $120

• $80

• $100

• $200

A firm’s profit-maximizing rule is:

• MC = ATC

• MR = MC

• P = AVC

• TR = TC

• TC = 0

TR = $1,000, TC = $1,000. What is economic profit?

• $1,000

• $500

• $0

• –$1,000

• $100

If a firm’s MC = $25 and price is constant at $30, should the firm increase output?

• No

• Yes

• Only if AVC is rising

• Only if FC is zero

• Can’t be determined

A firm has fixed cost = $100, variable cost = $200. What is total cost at output 10?

• $300

• $250

• $100

• $400

• $600

A firm’s marginal cost is $10, price = $10. What is the firm’s condition?

• Profitable

• Loss-making

• Break-even at optimal output

• Needs to increase price

• Needs to shut down

Firm earns revenue $3,000 and total cost $3,500. What is the firm’s economic loss?

• $1,000

• $500

• $300

• $3,000

• $2,000