WorksheetsMicro - πmax
Total questions: 28
Worksheet time: 9mins
Name
Class
Date
1.
What is profit defined as?
a)
π = TR - TC
b)
π = AFC - ATC
c)
π = TR
d)
The cost of producing one unit of a good or service
2.
How is total revenue calculated in a perfect competition scenario?
a)
P X Q
b)
P - Q
c)
P + Q
d)
P divided by Q
3.
What is the profit maximizing rule?
a)
Marginal revenue = marginal cost
b)
Fixed costs are minimized
c)
Production quantity is maximized
d)
TR = TC
4.
What is profit?
a)
π = TR − TC
b)
The amount of revenue earned.
c)
Total revenue minus total cost.
d)
The total cost of production.
5.
What is total revenue?
a)
Price times quantity.
b)
The sum of all costs incurred.
c)
The amount earned after subtracting costs.
d)
Total cost minus total profit.
6.
What does profit maximization entail?
a)
Choosing the level of output at which marginal revenue equals marginal cost.
b)
Increasing output continuously.
c)
Selecting the output level that generates the highest revenue.
d)
Minimizing costs at all levels of output.
7.
When does a firm maximize profit?
a)
When marginal revenue equals marginal cost.
b)
At any level of output.
c)
When total cost is minimized.
d)
When total revenue exceeds total cost.
8.
What happens if marginal revenue is greater than marginal cost?
a)
Profits are still rising and output should be increased.
b)
Output should be decreased.
c)
Profits are at their maximum.
d)
There are losses.
9.
What should a firm do if marginal revenue is less than marginal cost?
a)
Output should be reduced until marginal revenue equals marginal cost.
b)
Seek external funding.
c)
Exit the market.
d)
Increase output continuously.
10.
What is the profit at output levels Q1 and Q2?
a)
Zero.
b)
Positive.
c)
Negative.
d)
Varied.
11.
At what output level does a firm earn a profit?
a)
Between Q1 and Q2.
b)
Exactly at Q2.
c)
Above Q2.
d)
Below Q1.
12.
What is total revenue in perfect competition?
a)
Increases in a straight line with each unit at the amount of the price.
b)
Is fluctuating and unpredictable.
c)
Remains constant regardless of output.
d)
Decreases with each additional unit.
13.
How does a firm achieve optimal output?
a)
By choosing the output level where marginal revenue equals marginal cost.
b)
By increasing total revenue.
c)
By minimizing total cost.
d)
By expanding market share.
14.
What is profit?
a)
The combined effect of total revenue and total cost
b)
The total quantity of output
c)
The amount of revenue earned
d)
The total cost of production
15.
What is total revenue?
a)
Price times quantity
b)
Price divided by quantity
c)
Total cost minus total revenue
d)
Total quantity of output
16.
What is the profit maximizing rule?
a)
Marginal revenue equals marginal cost
b)
Price is greater than cost
c)
Total cost is minimized
d)
Total revenue exceeds total cost
17.
At what output levels is profit zero?
a)
Q1 and Q2
b)
Output levels beyond Q2
c)
Output level Q*
d)
Output levels from zero up to Q1
18.
What happens if marginal revenue is greater than marginal cost?
a)
Profits are still rising
b)
Profits are falling
c)
Profits are negative
d)
Profits are maximized
19.
What does it mean when marginal revenue equals marginal cost?
a)
Profit is maximized
b)
Output is maximized
c)
Revenue is maximized
d)
Cost is minimized
20.
What is the slope at the point of maximum profit?
a)
Equal to zero
b)
Infinite
c)
Negative
d)
Positive
21.
What level of output yields the highest profit?
a)
Output level Q*
b)
Output level Q1
c)
Output level zero
d)
Output level Q2
22.
What should the firm owner choose to maximize profit?
a)
The level of output at which marginal revenue equals marginal cost
b)
The level of output that minimizes cost
c)
The lowest output level possible
d)
The highest output level possible
23.
What happens if marginal revenue is less than marginal cost?
a)
Profits are falling
b)
Profits are maximized
c)
Profits are negative
d)
Profits are rising
24.
How is total revenue calculated?
a)
Total revenue is calculated as price times quantity.
b)
Total cost divided by quantity.
c)
Price divided by quantity.
d)
Total cost minus total revenue.
25.
What is profit defined as?
a)
Profit is the combined effect of total revenue and total cost.
b)
Total output minus total cost.
c)
Total revenue minus total sales.
d)
Total revenue plus total cost.
26.
At what output level does profit equal zero?
a)
At output levels Q1 and Q2.
b)
At output levels from Q1 to Q2.
c)
At output level Q*.
d)
At output level zero.
27.
What is the profit maximizing rule?
a)
Marginal revenue equals marginal cost.
b)
Total revenue is greater than total cost.
c)
Marginal revenue is less than marginal cost.
d)
Marginal revenue is greater than marginal cost.
28.
What should a profit maximizer do if marginal revenue is greater than marginal cost?
a)
Increase output until marginal revenue equals marginal cost.
b)
Stop production immediately.
c)
Increase output regardless of marginal cost.
d)
Continue producing at the same output level.
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