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AP Microeconomics - Unit 5 Test with correct answers
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AP Microeconomics - Unit 5 Test with correct answers
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AP Microeconomics - Unit 5 Test with correctanswers
In nnthe nnshort nnrun, nnif nnthe nnproduct nnprice nnof nna nnperfectly nncompetitive nnfirm nnis nnless nnthan nnthe
nnminimum nnaverage nnvariable nncost, nnthe nnfirm nnwill:
a) nnraise nnits nnprice
b) nnincrease nnits nnoutput
c) nndecrease nnits nnoutput nnslightly nnbut nnincrease nnits nnprofit nnmargin
d) nnlose nnmore nnby nncontinuing nnto nnproduce nnthan nnby nnshutting nndown
e) nnlose nnless nnby nncontinuing nnto nnproduce nnthan nnby nnshutting nndown nn- nncorrect nnanswer-lose nnmore nnby
nncontinuing nnto nnproduce nnthan nnby nnshutting nndown
Which nnof nnthe nnfollowing nnstatements nnbest nndescribes nnthe nngraph nnbelow?
a) nnEconomic nnlosses nnare nnincurred, nnand nnthe nnfirm nnwill nnincrease nnprice nnuntil nnno nnlosses nnare nnincurred.
b) nnEconomic nnlosses nnare nnincurred, nnand nnexit nnof nnfirms nnfrom nnthe nnmarket nnwill nncause nnprices nnto
nnincrease nnin nnthe nnlong nnrun.
c) nnEconomic nnprofits nnare nnearned, nnand nncosts nnwill nnincrease nnuntil nnno nnprofits nnare nnearned.
d) nnEconomic nnprofits nnare nnearned, nnand nnentry nnof nnfirms nninto nnthe nnmarket nnwill nncause nnprices nnto
nndecrease nnin nnthe nnlong nnrun.
e) nnEconomic nnprofits nnare nnearned, nnand nnneither nnexit nnnor nnentry nnof nnfirms nnwill nnoccur nnin nnthe nnlong
nnrun. nn- nncorrect nnanswer-Economic nnlosses nnare nnincurred, nnand nnexit nnof nnfirms nnfrom nnthe nnmarket nnwill
nncause nnprices nnto nnincrease nnin nnthe nnlong nnrun
A nncity nncouncil nnis nndeciding nnwhat nnprice nnto nnset nnfor nna nntrip nnon nnthe nncity's nncommuter nntrain nnline. nnIf
nnthe nncouncil nnwants nnto nnmaximize nnprofits, nnit nnwill nnset nna nnprice nnso nnthat:
a) nnprice nnequals nnmarginal nncost
b) nnprice nnequals nnaverage nncost
, c) nnprice nnequals nnmarginal nnrevenue
d) nnmarginal nnrevenue nnequals nnmarginal nncost
e) nnmarginal nnrevenue nnequals nnaverage nntotal nncost nn- nncorrect nnanswer-marginal nnrevenue nnequals
nnmarginal nncost
Which nnof nnthe nnfollowing nnare nncharacteristics nnof nna nnperfectly nncompetitive nnindustry? nn
I. nnNew nnfirms nncan nnenter nnthe nnindustry nneasily.
II. nnThere nnis nnno nnproduct nndifferentiation.
III. nnThe nnindustry nnis nnperfectly nnelastic nnIV. nnThe nnsupply nncurve nnof nnan nnindividual nnfirm nnin nnthe nnindustry
nnis nnperfectly nnelastic.
a) nnI nnand nnII nnonly
b) nnI nnand nnIII nnonly
c) nnU nnand nnIV nnonly
d) nnI, nnII, nnand nnIV nnonly
e) nnI, nnIII, nnand nnIV nnonly nn- nncorrect nnanswer-I nnand nnII nnonly
A nnperfectly nncompetitive nnfirm nnearning nneconomic nnprofits, nnproduces nnand nnsells nn100 nnunits nnof nnoutput
nnat nna nnprice nnof nn$20 nnper nnunit. nnIf nnits nnmarginal nncost nnof nnincreasing nnoutput nnto nna nnrate nnof nn101 nnunits
nnis nn$18, nnwhich nnof nnthe nnfollowing nnstatements nnis nncorrect?
a) nnThe nntotal nnrevenue nnfrom nnselling nn101 nnunits nnis nnthe nnsame nnas nnthe nntotal nnrevenue nnfrom nnselling
nn100 nnunits.
b) nnThe nntotal nnprofit nnfrom nnselling nn101 nnunits nnis nn$2 nngreater nnthan nnthe nntotal nnprofit nnfrom nnselling nn100
nnunits.
c) nnThe nntotal nncost nnof nnproducing nn101 nnunits nnis nn$2 nngreater nnthan nnthe nntotal nncost nnof nnproducing nn100
nnunits.
d)To nnsell nn101 nnunits, nnthe nnfirm nnmust nnreduce nnits nnprice nnbelow nn$20.
e) nnTo nnsell nn101 nnunits, nnthe nnfirm nnmust nnraise nnits nnprice nnabove nn$20 nn- nncorrect nnanswer-The nntotal
nnprofit nnfrom nnselling nn101 nnunits nnis nn$2 nngreater nnthan nnthe nntotal nnprofit nnfrom nnselling nn100 nnunits
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