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Economics Multiple choice

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A perfectly competitive market firm realizes an average of $11.00 and an average total cost of $10.00. Its marginal cost curve crosses the marginal revenue curve at an output level of 100 units. The current profit is $100.00. What is likely to occur in this market?
(A) Price will go down (B) Firms will leave the market (C)Cost will go up (D)Cost will go down

Details: Which is correct.
(A) A firm with fixed cost always has losses for low levels of output.
(B) A firm with fixed cost must incur economic losses if it chooses not to produce output.
(C) A firm with fixed cost can't maximize profit in th short run.
(D) A firm with fixed cost is always able to sell its product for a price that exceeds marginal revenue.

Details: Which of the following state is true aboout fixed cost?

(A) Fixed cost is always large in the long run.
(B) Fixed cost is seldom larger than variable cost.
(C) Fixed cost is a short run phenomenon.
(D) Fixed Cost can never exceed variable cost in a profitable firm.

Subject: Monopolies
Details: One problem with monopolies is that they can
(A) Profiteer at the expense of consumers.
(B) Price their product at a level that forces consumers to pay more then they can afford,
(C)Restrict output below the socially efficient level of production

Subject: Perfectly Competitve Market
Details: Which statement is true in a Perfectly Competitve market.
(A)Changes in demand causes short term changes in the price and no change in quantity supplied to market.
(B) Changes in demand cause no long term changes in price and permanent changes in quantity supplied to the market
(C) Changes in demand cause no changes in price and long term changes in quantity supplied to the market.
(D) Changes in demand cause no chages in price and permanent changes in quantity supplied to the market.

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Economics multiple choice questions

1.The opportunity cost of receiving 100 dollars in the future as opposed to getting that 100 dollars today
is:
a.The foregone interest that could be earned if you had the money today.
b.The taxes paid on any earnings.
c.The value of $100 relative to the total income of that person.
d.The value of $100 relative to the total income of all persons.
2. If firms in the pizza industry are earning negative economic profits, which of the following will most likely occur in the future?
a.Some firms will exit the market
b.The economic profits of the firms in the industry will rise
c.The market price for pizza will rise
d.All of the above
3.The economic principle that producers are willing to produce more output when price is high is depicted by the:
a.Upward slope of the supply curve
b.Extreme steepness of the supply curve.
c.Downward slope of the supply curve.
d.Interaction of the supply and demand curves.

4.Because of consumer-consumer rivalry, the price will tend to:
a.Be driven to a lower price.
b.Rise up to the maximum price the consumers are willing and able to pay.
c.Be the same as the competitive price.
d.Be the same as the monopoly price.

5.Opportunity cost differs from accounting costs because of
a.Implicit costs
b.Accounting profits
c.Economic profits
d.Explicit costs
6.If A and B are substitutes, an increase in the price of good A would:
a.Have no effect on the quantity demanded of B.
b.Lead to an increase in demand for B.
c.Lead to a decrease in demand for B.
d.None of the statements associated with this question are correct.

7.Which of the following increases the potential for sustainable long-run industry profits?
a.Entry
b.The availability of multiple substitute
c.Presence of complements
d.None of the above
8.Negotiations between the buyer and seller of a new car is an example of:
a.Consumer-consumer rivalry.
b.Consumer-producer rivalry
c.Producer-producer rivalry.
d.Monopoly.

9.Property owners move scarce resources towards the production of goods most valued by society because
a.Government controls the allocation of resources.
b.Consumers demand inexpensive goods and services.
c.Managers are solely pursuing the interests of society.
d.Firms attempt to maximize profits.

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