WGU C211 - Quiz Retake Questions
What is the change in total cost equal to in the marginal cost equation? - ANSMarginal cost
multiplied by change in quantity.
Fixed costs equal: - ANSTotal costs minus variable costs
Economic profit is distinct from accounting profit because - ANSEconomic profit incorporates
both explicit and implicit costs.
Total costs include: - ANSVariable costs plus fixed costs
Marginal costs consider - ANSThe increase in total cost arising from an extra unit of
production.
What response best describes the relationship between marginal costs and total costs? -
ANSWhenever marginal cost is less than average total cost, average total cost is falling.
Which statement is true about productivity? - ANSThe value of marginal product of labor
equals wage in a competitive firm.
A production function expresses the relationship between: - ANSQuantity of resource inputs
and product/service outputs.
Opportunity costs include: - ANSThe income the entrepreneur could have earned working for
an employer.
Economists and decision makers study and then make decisions or judgments based on
(select best answer): - ANSMarginal analysis.
The primary reason that the marginal cost curve declines and then increases is: - ANSFirms
experience increasing marginal product, then diminishing marginal product.
When do marginal costs eventually rise? - ANSWith the quantity of output.
Consider the following example: A perfectly competitive firm finds that at current production
levels marginal cost is greater than marginal revenue. What action should this firm take in
order to pursue the maximization of profit? - ANSDecrease the target output.
A competitive firm is characterized by: - ANSTrading of identical products.
Competitive firms experience marginal revenue that is: - ANSEqual to price.
In the short-run, a competitive firm would continue to produce under the following
circumstance: - ANSTotal revenue exceeds total variable costs.
, What fundamental shape does a demand curve take in a competitive market? -
ANSHorizontal.
For a perfectly competitive firm which condition is true? - ANSThe demand curve is the same
as the marginal revenue curve.
Which condition is true for perfectly competitive firms in the long-run? - ANSThey will exit the
market if total revenue is less than total costs.
Which statement is true concerning marginal costs? - ANSMarginal costs typically decline
and then increase with the quantity of output.
What rule is used by perfectly competitive firms to determine shut-down in the short-run? -
ANSPrice is less than average variable costs
What is true of perfectly competitive firms in the long-run? - ANSEconomic profits will not be
achievable.
What two market structures have common profit characteristics in the long run? -
ANSPerfect competition and monopolistic competition.
Consider the structure/shape of the demand curve for the various firm types. In what way
does a monopoly's demand curve differ from a perfectly competitive firm's demand curve? -
ANSThe monopoly's demand curve is downward sloping and the competitive firm's demand
curve is horizontal.
Monopolistic firms seek to maximize profit. What condition allows them to achieve this goal?
- ANSWhen marginal revenue equals marginal cost.
In pursuing the maximization of profit, monopolies set price at a point that is: - ANSAbove
marginal cost.
Consider demand for the various firm types. How does a monopoly's demand curve compare
to the demand curve for a perfectly competitive firm? - ANSIt is less elastic.
A monopoly's demand curve is: - ANSThe same as the market demand curve.
What is a key characteristic of the demand curve for a monopoly? - ANSIt is the same as the
market demand curve.
In the long-run, how do monopolistically competitive firms garner economic profits? -
ANSThey earn zero economic profits in the long-run.
What is true of a monopolistically competitive firm's demand curve? - ANSIt is less elastic
than a perfectly competitive firm.
What is the change in total cost equal to in the marginal cost equation? - ANSMarginal cost
multiplied by change in quantity.
Fixed costs equal: - ANSTotal costs minus variable costs
Economic profit is distinct from accounting profit because - ANSEconomic profit incorporates
both explicit and implicit costs.
Total costs include: - ANSVariable costs plus fixed costs
Marginal costs consider - ANSThe increase in total cost arising from an extra unit of
production.
What response best describes the relationship between marginal costs and total costs? -
ANSWhenever marginal cost is less than average total cost, average total cost is falling.
Which statement is true about productivity? - ANSThe value of marginal product of labor
equals wage in a competitive firm.
A production function expresses the relationship between: - ANSQuantity of resource inputs
and product/service outputs.
Opportunity costs include: - ANSThe income the entrepreneur could have earned working for
an employer.
Economists and decision makers study and then make decisions or judgments based on
(select best answer): - ANSMarginal analysis.
The primary reason that the marginal cost curve declines and then increases is: - ANSFirms
experience increasing marginal product, then diminishing marginal product.
When do marginal costs eventually rise? - ANSWith the quantity of output.
Consider the following example: A perfectly competitive firm finds that at current production
levels marginal cost is greater than marginal revenue. What action should this firm take in
order to pursue the maximization of profit? - ANSDecrease the target output.
A competitive firm is characterized by: - ANSTrading of identical products.
Competitive firms experience marginal revenue that is: - ANSEqual to price.
In the short-run, a competitive firm would continue to produce under the following
circumstance: - ANSTotal revenue exceeds total variable costs.
, What fundamental shape does a demand curve take in a competitive market? -
ANSHorizontal.
For a perfectly competitive firm which condition is true? - ANSThe demand curve is the same
as the marginal revenue curve.
Which condition is true for perfectly competitive firms in the long-run? - ANSThey will exit the
market if total revenue is less than total costs.
Which statement is true concerning marginal costs? - ANSMarginal costs typically decline
and then increase with the quantity of output.
What rule is used by perfectly competitive firms to determine shut-down in the short-run? -
ANSPrice is less than average variable costs
What is true of perfectly competitive firms in the long-run? - ANSEconomic profits will not be
achievable.
What two market structures have common profit characteristics in the long run? -
ANSPerfect competition and monopolistic competition.
Consider the structure/shape of the demand curve for the various firm types. In what way
does a monopoly's demand curve differ from a perfectly competitive firm's demand curve? -
ANSThe monopoly's demand curve is downward sloping and the competitive firm's demand
curve is horizontal.
Monopolistic firms seek to maximize profit. What condition allows them to achieve this goal?
- ANSWhen marginal revenue equals marginal cost.
In pursuing the maximization of profit, monopolies set price at a point that is: - ANSAbove
marginal cost.
Consider demand for the various firm types. How does a monopoly's demand curve compare
to the demand curve for a perfectly competitive firm? - ANSIt is less elastic.
A monopoly's demand curve is: - ANSThe same as the market demand curve.
What is a key characteristic of the demand curve for a monopoly? - ANSIt is the same as the
market demand curve.
In the long-run, how do monopolistically competitive firms garner economic profits? -
ANSThey earn zero economic profits in the long-run.
What is true of a monopolistically competitive firm's demand curve? - ANSIt is less elastic
than a perfectly competitive firm.
