32) Bill owns a lawn-care company in Windermere, Florida, whose cost curves are illustrated in the above figure. The market equilibrium price in this perfectly competitive market equals $32 per lawn mowed. At this price, how many lawns will Bill mow per week?
A) more than 10 and less than 30
B) 30
C) 40
D) 50
E) 0
33) Bill owns a lawn-care company in Windermere, Florida, whose cost curves are illustrated in the above figure. The market equilibrium price in this perfectly competitive market equals $32 per lawn mowed. Bill's average total cost curve is ATC, so his total cost of production equals
A) $0 because Bill shuts down.
B) more than $0 and less than $1,200 per week.
C) more than $1,200 and less than $1,400 per week.
D) more than $1,400 per week and less than $1,800 per week.
E) more than $1,800 per week.
34) Bill owns a lawn-care company in Windermere, Florida, Florida, whose cost curves are illustrated in the above figure. The market equilibrium price in this perfectly competitive market equals $32 per lawn mowed. If Bill's average total cost curve is ATC, his total economic ________ equals ________.
A) loss; $800 per week
B) profit; $1,280 per week
C) profit; $480 per week
D) loss; $1,280 per week
E) profit; $32 per week
35) If the market supply curve and market demand curve for a good intersect at 600,000 units and there are 10,000 identical firms in the market, then each firm is producing
A) 600,000 units.
B) 60,000,000,000 units.
C) 60,000 units.
D) 60 units.
E) 10,000 units.
36) In the short run, a perfectly competitive firm
A) must make an economic profit.
B) must incur an economic loss.
C) must make zero economic profit.
D) might make an economic profit, zero economic profit, or incur an economic loss.
E) None of the above answers is correct.
37) A perfectly competitive firm definitely makes an economic profit in the short run if price is
A) equal to marginal cost.
B) equal to average total cost.
C) greater than average total cost.
D) greater than marginal cost.
E) greater than average variable cost.
38) If a perfectly competitive firm is maximizing its profit and is making an economic profit, which of the following is correct?
i.Price equals marginal revenue.
ii.Marginal revenue equals marginal cost.
iii.Price is greater than average total cost.
A) i only
B) i and ii only
C) ii and iii only
D) i and iii only
E) i, ii, and iii
39) The market for watermelons in Alabama is perfectly competitive. A watermelon producer making zero economic profit could make an economic profit if the
A) average total cost of selling watermelons does not change.
B) average total cost of selling watermelons rises.
C) average total cost of selling watermelons falls.
D) marginal cost of selling watermelons does not change.
E) marginal cost of selling watermelons rises.
40) Juan's Software Service Company is in a perfectly competitive market. Juan has total fixed cost of $25,000, average variable cost for 1,000 service calls is $45, and marginal revenue is $75. Juan's makes 1,000 service calls a month. What is his economic profit?
A) $5,000
B) $25,000
C) $45,000
D) $75,000
E) $50,000
41) If a perfectly competitive firm finds that price is less than its ATC, then the firm
A) will raise its price to increase its economic profit.
B) will lower its price to increase its economic profit.
C) is making an economic profit.
D) is incurring an economic loss.
E) is making zero economic profit.
42) A perfectly competitive furniture-rental firm in Phoenix incurs an economic loss if the average total cost of each rental is
A) greater than the marginal revenue of each rental.
B) less than the marginal revenue of each rental.
C) equal to the marginal revenue of each rental.
D) equal to the price of each rental.
E) greater than the average variable cost of each rental.
