Question

1. When the short-run marginal cost curve is upward-sloping,

The average total cost curve is upward-sloping

There are diseconomies of scale.

The average total cost curve is above the marginal cost curve.

Diminishing returns occurs with greater output.

2. Marginal revenue is the change in

Group of answer choices

Average revenue when output is changed.

Average revenue when price is changed.

Total revenue when output is changed.

Total revenue when price is changed.

3.The shutdown point occurs where price equals the minimum of

AFC.

MR.

AVC.

ATC.

4. Economic profit is the difference between

Accounting profit and explicit costs.

Accounting profits and external costs.

Total costs and total economic costs.

Total revenues and total economic costs.

5. If the equilibrium price in a perfectly competitive market for walnuts is $4.99 per pound, then an individual firm in this market can

Not sell additional walnuts unless the firm lowers its price.

Sell more only by increasing its advertising budget.

Sell an additional pound of walnuts at $4.99.

Not sell additional walnuts at any price because the market is at equilibrium.

6. Profit per unit is equal to

TR - ATC.

P - MR.

TR - TC.

P - ATC.

Answer 1

1. When the short run marginal cost is upward sloping, diminishing returns occurs with greater output , because increasing MC implies decreasing marginal product. Hence, option(D) is correct.

2. Marginal revenue is the change in total revenue when output is changed. Hence, option(C) is correct.

3. The shutdown point occurs where price equals the minimum of AVC. Hence, option(C) is correct.

4. Economic profit is the difference between total revenue and total economic costs. Hence, option(D) is correct.

5. If P= $4.99 in perfectly competitive market , then an individual firm in this market can sell an additional pound of walnuts at $4.99. Hence, option(C) is correct.

6. Profit per unit is equal to P-ATC. Hence, option(D) is correct.