WorksheetsEcon Unit 3 Test Version 1 Minus 6 questions, 2025-26
Total questions: 20
Worksheet time: 10mins
Name
Class
Date
1.
What term describes when utility-maximizing consumers and profit-maximizing producers settle on an agreeable price?
a)
Long-Run Average Total Cost
b)
Competitive Market Equilibrium
c)
Marginal Cost
d)
Total Revenue
2.
The concept that states, "As more labor is added to a fixed amount of capital, the additional output from each new worker eventually declines," is known as:
a)
Long-Run Average Total Cost
b)
Diminishing Marginal Returns
c)
Competitive Market Equilibrium
d)
Perfect Competition
3.
Which concept explains the minimized cost per unit of output when a firm can fully adjust all inputs?
a)
Long-Run Average Total Cost
b)
Diminishing Marginal Returns
c)
Competitive Market Equilibrium
d)
Individual Consumer Surplus
4.
A market in which all market participants are price-takers.
a)
Perfect Competition
b)
Allocative Efficiency
c)
Marginal Revenue
d)
Marginal Cost
5.
What term describes costs that do not depend on the quantity of output produced?
a)
Variable Costs
b)
Fixed Costs
c)
Marginal Costs
d)
Opportunity Costs
6.
When a company’s long-run average cost goes down as it produces larger quantities, this is known as:
a)
Economies of Scale
b)
Marginal Costs of Production
c)
Marginal Benefits of Consumption
d)
Diseconomies of Scale
7.
The additional cost of producing one more unit of a product.
(a)
8.
Firms whose actions have no effect on the market price of the good or service it sells.
(a)
9.
When resources produce the greatest total benefit; MB = MC.
(a)
10.
The additional quantity of output produced by using one more unit of that input.
(a)
11.
The ability of a firm or group of firms to influence the price and output level of a product or service in the market.
(a)
12.
The relationship between the quantity of inputs a firm uses and the quantity of output it produces.
(a)
13.
A hat maker pays $500 per month in rent for his production facility. This cost is best described as …
a)
an opportunity cost.
b)
an external cost.
c)
a variable cost.
d)
a fixed cost.
14.
Charlie initially leased a one-room space and started a small day care center with only 4 children and one staff member. But he found that the costs per child were very high. When he leased a larger space, and expanded the center to have more children and staff, the cost per child fell. Which of the following factors came into play when Charlie expanded the center?
a)
Economics of Scale
b)
Diseconomies of Scale
c)
Economic Profit
d)
Accounting Profit
15.
On the graph above, the onset of diminishing marginal returns occurs beyond
a)
Point A
b)
Point D
c)
Point C
d)
Point E
16.
A firm’s short-run marginal cost curve will eventually increase because of
a)
economies of scale (increasing returns to scale).
b)
diseconomies of scale (decreasing returns to scale).
c)
diminishing marginal returns.
d)
increasing marginal returns.
17.
Under perfect competition, explain whether this firm is making normal profit, positive profits, or negative profits.
4 lines
18.
At which price will this perfectly competitive firm make an economic profit?
a)
P1
b)
P2
c)
P3
d)
P4
19.
Assume that in the short run at the profit-maximizing output, the price is lower than average variable cost. The perfectly competitive firm should
a)
Increase its price
b)
Decrease its price
c)
Increase its output
d)
Decrease its output
20.
For a perfectly competitive firm, if the market price is $8 then
a)
marginal revenue is greater than $8.
b)
marginal revenue is less than $8.
c)
marginal revenue is equal to $8.
d)
average revenue is greater than $8.
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