Question : 15.4   Chapter Figures The figure above shows a firm’s total revenue : 1241207

 

15.4   Chapter Figures

 

The figure above shows a firm’s total revenue and total cost curves.

 

1) Based on the figure above, when the firm maximizes its profit, it produces ________ cans per day.

A) 0

B) more than 0 and less than 5

C) 5 or more but less than 10

D) 10

E) more than 10

2) To maximize its profit, the firm in the figure above produces ________ cans per day and ________.

A) 0; incurs an economic loss of less than $20

B) between 3 to 5 cans; earns a normal profit

C) 10; earns an economic profit of $2.90

D) 10; earns an economic profit of $29

E) more than 10; earns an economic profit

 

The figure above shows a firm’s marginal revenue and marginal cost curves.

 

3) Based on the figure above, the price of a can is $8; if the price increased to $12, then the firm would

A) produce zero cans.

B) decrease the amount of cans produces it but not to zero.

C) not change the amount of cans it produces.

D) increase the amount of cans it produces.

E) More information is needed to determine what action the firm will take.

4) Suppose the firm’s marginal cost of producing a can increases by $1 per can. Then, based on the figure above, the firm would

A) produce zero cans.

B) decrease the amount of cans it produces but not to zero cans.

C) not change the amount of cans it produces.

D) increase the amount of cans it produces.

E) More information is needed to determine what action the firm will take.

 

The figure above shows the cost curves and marginal revenue curve for a perfectly competitive firm.

 

5) Based on the figure above, what is the price of a can?

A) $0.

B) $3.00 per can

C) $5.14 per can

D) None of the above prices is correct.

E) More information is needed to determine the price of a can.

6) Based on the figure above, if the firm produces 7 cans per day, the firm ________ maximizing its profit and is ________.

A) is; incurring an economic loss

B) is; making a normal profit

C) is; making an economic profit

D) is not; incurring an economic loss

E) is not; making a normal profit

 

7) Suppose the price of a can was $5.14. In this case, to maximize its profit, the firm illustrated in the figure above would

A) increase its production and would make an economic profit.

B) not change its production and would make a normal profit.

C) not change its production and would make an economic profit.

D) increase its production and would incur an economic loss.

E) not change its production and would incur an economic loss.

 

8) The firm in the figure above is ________ that is equal to ________.

A) making an economic profit; $5.14 × 7

B) making an economic profit; $3.00 × 7

C) incurring an economic loss; $5.14 × 7

D) incurring an economic loss; ($5.14 – $3.00) × 7

E) making an economic profit; ($5.14 – $3.00) × 7

The figure above shows some of a firm’s cost curves and its marginal revenue curve.

 

9) Based on the figure above, what is the price of a can?

A) $0

B) $8.00 per can

C) $5.10 per can

D) None of the above prices is correct.

E) More information is needed to determine the price of a can.

 

10) Based on the figure above, if the firm produces 10 cans per day, the firm ________ maximizing its profit and is ________.

A) is; incurring an economic loss

B) is; making zero economic profit

C) is; making an economic profit

D) is not; incurring an economic loss

E) is not; making zero economic profit