WGU-C211 CH 13-17 Exam 2022/2023

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What is the change in total cost equal to in the marginal cost equation? - ANSWER Marginal cost multiplied by change in quantity. Fixed costs equal: - ANSWER Total costs minus variable costs Eco... nomic profit is distinct from accounting profit because: - ANSWER Economic profit incorporates both explicit and implicit costs. Total costs include: - ANSWER Variable costs plus fixed costs. Marginal costs consider: - ANSWER The increase in total cost arising from an extra unit of production. What response best describes the relationship between marginal costs and total costs? - ANSWER Whenever marginal cost is less than average total cost, average total cost is falling. Which statement is true about productivity? - ANSWER The value of marginal product of labor equals wage in a competitive firm. A production function expresses the relationship between: - ANSWER Quantity of resource inputs and product/service outputs. Opportunity costs include: - ANSWER The income the entrepreneur could have earned working for an employer. Economists and decision makers study and then make decisions or judgments based on - ANSWER Marginal analysis. The primary reason that the marginal cost curve declines and then increases is: - ANSWER Firms experience increasing marginal product, then diminishing marginal product. Which of the following statements is accurate? - ANSWER Marginal costs eventually rise with the quantity of output. perfectly competitive firm finds that at current production levels marginal cost is greater than marginal revenue. What action should this firm take in order to pursue the maximization of profit? - ANSWER Decrease the target output. A competitive firm is characterized by - ANSWER Trading of identical products. Competitive firms experience marginal revenue that is: - ANSWER Equal to price n the short-run, a competitive firm would continue to produce under the following circumstance: - ANSWER Total revenue exceeds total variable costs. What fundamental shape does a demand curve take in a competitive market? - ANSWER Horizontal For a perfectly competitive firm which condition is true? - ANSWER The demand curve is the same as the marginal revenue curve. Which condition is true for perfectly competitive firms in the long-run? - ANSWER They will exit the market if total revenue is less than total costs. Which statement is true concerning marginal costs? - ANSWER Marginal costs typically decline and then increase with the quantity of output. What rule is used by perfectly competitive firms to determine shut-down in the short-run? - ANSWER Price is less than average variable costs. What is true of perfectly competitive firms in the long-run? - ANSWER Economic profits will not be achievable. What two market structures have common profit characteristics in the long run? - ANSWER Perfect competition and monopolistic competition. In what way does a monopoly's demand curve differ from a perfectly competitive firm's demand curve? - ANSWER The monopoly's demand curve is downward sloping and the competitive firm's demand curve is horizontal. Monopolistic firms seek to maximize profit. What condition allows them to achieve this goal? - ANSWER When marginal revenue equals marginal cost. In pursuing the maximization of profit, monopolies set price at a point that is: - ANSWER Above marginal cost. How does a monopoly's demand curve compare to the demand curve for a perfectly competitive firm? - ANSWER It is less elastic. A monopoly's demand curve is: - ANSWER The same as the market demand curve. What is a key characteristic of the demand curve for a monopoly? - ANSWER It is the same as the market demand curve. Which condition is NOT true of monopolies? - ANSWER They are welfare optimizing [Show More]

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