1. As output expands beyond the break-even point, the vertical distance between
ID: 1101126 • Letter: 1
Question
1. As output expands beyond the break-even point, the vertical distance between the AVC and ATC will
A. get larger
B. Remain constant
C. get smaller
2. Total revenue divided by output equals
A. marginal cost
B. average total cost
C. price
D. average variable cost
E. none of the above.
3. Which statement is false?
A. the minimum point of the AVC curve is the shut-down point.
B. the minimum point of the ATC curve is the break-even point
C. the firm's short-run supply curve runs up the marginal cost curve from the shut-down point all the way up the curve
D. none is false
4. What curve tells us the output at which a firm is producing at peak efficiency?
A. AFC
B. AVC
C. ATC
D.demand
5. Under perfect competition there must be
A. perfect mobility of resources and perfect knowledge
B. neither perfect mobility nor perfect knowledge
C. perfect mobility but not perfect knowledge
D. perfect knowledge but not perfect mobility
6. Under perfect competition
A. many firms have some influence over price
B. a few firms have influence over price
C. no firms have any influence over price
7. Which statement is false?
A. A monopoly is both a firm and an industry
B. A monopoly is an imperfect competitor
C. there are no monopolies in the United States
D. none of these statements is false.
8.The monopolist and the perfect competitor differ in that
A. they face different demand curves
B. the monopolist does not always produce at an output in which MC=MR
C. the monopolist is always a large firm
D. the monopolist is more efficient.
9. Which statement is true?
A. the monopolist operates at the minimum point of her average total cost curve.
B. Once a monopoly is set up, it is impossible to dislodge it
C. Monopolies are always large firms.
D. Price is always ready off the demand curve.
10. The most important legal barrier to entry into an industry is
A. government licensing
B. patents
C. government franchising
D. none of these
Explanation / Answer
1) C. get smaller
2)A. marginal cost
3) D none is false
4) C. ATC
5) A. perfect mobility of resources and perfect knowledge
6) B. a few firms have influence over price
7) C. there are no monopolies in the United States
8) A. they face different demand curves
9)B. Once a monopoly is set up, it is impossible to dislodge it
10) A. government licensing
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