Econ Chapter 4 Textbook Questions

question

If a firm in a competitive market operates where marginal cost is above the price, then the firm should

a. Increase output
b. Decrease output
c. Keep output constant
d. Sell the plant to the German

answer

b. Decrease output

question

If a firm in a competitive market operates where marginal cost is below the price, then the firms should

a. Increase output
b. Decrease output
c. Keep output constant
d. Buy more plants from the Canadians

answer

a. Increase output

question

If a firm in a competitive market operates where marginal cost is equal to the price, then the firm should

a. Increase output
b. Decrease output
c. Keep output constant
d. Sponsor Nascar

answer

c. Keep output constant

question

If fixed costs increase, then the entire supply curve

a. Shifts to the right
b. Shifts to the left
c. Stays constant
d. Becomes steeper

answer

c. Stays constant

question

If an industry is characterized by diseconomies of scale, then we would expect in that industry

a. A few very large firms
b. Many very small firms
c. A mixture of small and large firms
d. Elon Musk to own at least 50% of all firms

answer

b. Many very small firms

question

If an industry is characterized by constant returns to scale, then we would expect in that industry

a. A few very large firms
b. Many very small firms
c. A mixture of small, medium and large firms
d. Prices to be high

answer

c. A mixture of small, medium and large firms

question

In a competitive industry we would expect

a. That firms take the price as given
b. That there are a few firms that dictate the price
c. Each firm to produce where the price is above marginal cost
d. Each firm to produce where the price is below marginal cost

answer

a. That firms take the price as given

question

When average costs are downward sloping, we would expect marginal costs

a. To be above average costs
b. To be below average costs
c. To be horizontal
d. To be vertical

answer

b. To be below average costs

question

When average costs are U-shaped, there are
a. Economies of scale at low levels of production and diseconomies of scale at high levels of production
b. Diseconomies of scale at low levels of production and economies of scale at high levels of production
c. Constant returns to scale
d. Economies of scale for all levels of production

answer

a. Economies of scale at low levels of production and diseconomies of scale at high levels of production

question

When average costs are U-shaped, then marginal costs
a. Intersect average costs where average costs are upward sloping
b. Intersect average costs where average costs are downward sloping
c. Intersect average costs where average costs are minimized
d. Are also U-shaped

answer

c. Intersect average costs where average costs are minimized

question

If fixed costs decrease, then

a. Variable costs decrease
b. Total costs decrease
c. Marginal costs decrease
d. Average variable costs decrease

answer

b. Total costs decrease

question

Moore's Law is an example of
a. Economies of scale
b. Diseconomies of scale
c. Constant returns to scale
d. None of the above

answer

d. None of the above

question

If the price increase, a competitive firm will

a. Produce more
b. Produce less
c. Experience a shift to the right of the supply curve
d. Experience a shift to the left of the supply curve

answer

a. Produce more

question

If the price drops below minimum average costs, a competitive firm will

a. Produce more
b. Produce less
c. Produce zero
d. Not change its production

answer

c. Produce zero

question

A competitive firm will

a. Take the price a given
b. Act as price taker
c. Be unable to influence the price
d. All of the above

answer

d. All of the above

question

Imagine Jack owns a plant in Columbus, IN that makes ball bearings. Jack builds a new plant to make ball bearings in Kokomo, IN. Production in the second plant exactly duplicates all inputs from the Columbus plant. All prices of inputs are the same in Columbus and Kokomo. Then we would expect costs in Kokomo to be

a. Higher than in Columbus
b. Lower than in Columbus
c. The same as in Columbus
d. Astronomical

answer

c. The same as in Columbus

question

Imagine Jack owns a plant in Columbus, IN that makes ball bearings. Jack builds a new plant to make ball bearings in Kokomo, IN. Production in the second plant exactly duplicates all inputs from the Columbus plant. All prices of inputs are the same in Columbus and Kokomo. Then we would expect costs in Kokomo to be

The thought experiment in question 16 illustrates

a. Economies of scale
b. Diseconomies of scale
c. Constants returns to scale
d. Competitive markets

answer

c. Constants returns to scale

question

In the production of electricity, we would expect

a. Economies of scale
b. Diseconomies of scale
c. Constant returns to scale
d. Many small firms

answer

a. Economies of scale

question

In the "therapeutic massage industry", we would expect

a. Economies of scale
b. Diseconomies of scale
c. Constant returns to scale
d. A few large firms

answer

b. Diseconomies of scale

question

Imagine a firm in a competitive market. Suppose that its marginal cost curve shifts down, then we would expect

a. The price to rise
b. The price to fall
c. Its quantity supplied to rise
d. Its quantity supplied to fall

answer

b. The price to fall

1 of 20

question

If a firm in a competitive market operates where marginal cost is above the price, then the firm should

a. Increase output
b. Decrease output
c. Keep output constant
d. Sell the plant to the German

answer

b. Decrease output

question

answer

a. Increase output

question

If a firm in a competitive market operates where marginal cost is equal to the price, then the firm should

a. Increase output
b. Decrease output
c. Keep output constant
d. Sponsor Nascar

answer

c. Keep output constant

question

If fixed costs increase, then the entire supply curve

a. Shifts to the right
b. Shifts to the left
c. Stays constant
d. Becomes steeper

answer

c. Stays constant

question

answer

b. Many very small firms

question

answer

c. A mixture of small, medium and large firms

question

answer

a. That firms take the price as given

question

When average costs are downward sloping, we would expect marginal costs

a. To be above average costs
b. To be below average costs
c. To be horizontal
d. To be vertical

answer

b. To be below average costs

question

answer

a. Economies of scale at low levels of production and diseconomies of scale at high levels of production

question

answer

c. Intersect average costs where average costs are minimized

question

If fixed costs decrease, then

a. Variable costs decrease
b. Total costs decrease
c. Marginal costs decrease
d. Average variable costs decrease

answer

b. Total costs decrease

question

Moore's Law is an example of
a. Economies of scale
b. Diseconomies of scale
c. Constant returns to scale
d. None of the above

answer

d. None of the above

question

If the price increase, a competitive firm will

a. Produce more
b. Produce less
c. Experience a shift to the right of the supply curve
d. Experience a shift to the left of the supply curve

answer

a. Produce more

question

If the price drops below minimum average costs, a competitive firm will

a. Produce more
b. Produce less
c. Produce zero
d. Not change its production

answer

c. Produce zero

question

A competitive firm will

a. Take the price a given
b. Act as price taker
c. Be unable to influence the price
d. All of the above

answer

d. All of the above

question

answer

c. The same as in Columbus

question

Imagine Jack owns a plant in Columbus, IN that makes ball bearings. Jack builds a new plant to make ball bearings in Kokomo, IN. Production in the second plant exactly duplicates all inputs from the Columbus plant. All prices of inputs are the same in Columbus and Kokomo. Then we would expect costs in Kokomo to be

The thought experiment in question 16 illustrates

a. Economies of scale
b. Diseconomies of scale
c. Constants returns to scale
d. Competitive markets

answer

c. Constants returns to scale

question

In the production of electricity, we would expect

a. Economies of scale
b. Diseconomies of scale
c. Constant returns to scale
d. Many small firms

answer

a. Economies of scale

question

In the "therapeutic massage industry", we would expect

a. Economies of scale
b. Diseconomies of scale
c. Constant returns to scale
d. A few large firms

answer

b. Diseconomies of scale

question

answer

b. The price to fall

Continue to order Get a quote

Econ Chapter 4 Textbook Questions

Recent Posts

Recent Comments

Calculate the price of your order

Our guarantees

Money-back guarantee

Zero-plagiarism guarantee

Free-revision policy

Privacy policy

Fair-cooperation guarantee