Microeconomics Quiz

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Questions and Answers

What does elasticity of supply tell us?

  • How much supply responds to a change in quantity demanded.
  • How much sellers will increase production in response to a change in price. (correct)
  • How much producers will increase production with changes in consumers' income.
  • How much sellers will change their price as their quantity supplied changes.

What does the elasticity of supply tell us?

  • How much sellers will change their price as their quantity supplied changes
  • How much supply responds to a change in quantity demanded
  • How much sellers will increase production in response to a change in price (correct)
  • How much producers will increase production with changes in consumers' income

When the average total cost curve is rising, where will the marginal cost curve be?

  • Falling with greater output
  • Above the average total cost curve (correct)
  • Below the average total cost curve
  • Below the average fixed cost curve

When the average total cost curve is rising, what will happen to the marginal cost curve?

<p>Above the average total cost curve. (A)</p> Signup and view all the answers

What is the slope of the marginal cost curve as output increases?

<p>Slopes downward to the right. (B)</p> Signup and view all the answers

What is the slope of the marginal cost curve?

<p>Slopes downward to the right as output increases (B)</p> Signup and view all the answers

What is a monopoly?

<p>There is only one producer of a good or service (B)</p> Signup and view all the answers

What is a monopoly?

<p>There is only one producer of a good or service. (D)</p> Signup and view all the answers

What happens to a firm's marginal cost curve when technology improves?

<p>Downward and supply increases. (C)</p> Signup and view all the answers

When technology improves, where does the firm's marginal cost curve shift?

<p>Downward and supply increases (D)</p> Signup and view all the answers

Why should a perfectly competitive firm decrease output if price is less than marginal cost?

<p>The firm is producing units that cost more to produce than the firm receives in revenue, thus reducing its profits (or increasing its losses) (A)</p> Signup and view all the answers

What are implicit costs?

<p>Are the value of resources used for which no monetary payment is made (C)</p> Signup and view all the answers

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