Question 1 (2 points)
 
Refer to the above figure. Profits for this firm are negative
Question 1 options:
A) 
only for all points less than B.
B) 
only at points B and C.
C) 
for points between B and C.
D) 
for all points less than B and greater than C.
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Question 2 (2 points)
 
In the above figure, if the firm is facing demand curve d2, then to maximize profits it will produce at output level
Question 2 options:
A) 
A.
B) 
B.
C) 
C.
D) 
D.
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Question 3 (2 points)
 
A firm earning economic losses should operate in the short run as long as
Question 3 options:
A) 
the price per unit sold is greater than the average fixed cost per unit produced.
B) 
the price per unit sold is greater than the average variable cost per unit produced.
C) 
marginal revenue is at least the price per unit sold.
D) 
the price per unit sold is equal to or greater than the marginal cost of production.
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Question 4 (2 points)
 
In the above figure, assume d3 is the demand curve faced by this firm. Which is true?
Question 4 options:
A) 
This firm is earning an economic profit.
B) 
This firm is experiencing an economic loss.
C) 
This firm is breaking even.
D) 
This firm’s total revenues equal HRD0.
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Question 5 (2 points)
 
The profit-maximizing level of output for a firm occurs at the point at which
Question 5 options:
A) 
P = ATC.
B) 
P = AVC.
C) 
MR = MC.
D) 
MR = ATC.
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Question 6 (2 points)
 
In a long-run equilibrium, a perfectly competitive firm’s average total cost is
Question 6 options:
A) 
minimized.
B) 
maximized.
C) 
zero.
D) 
equal to average fixed cost.
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Question 7 (2 points)
 
Signals are
Question 7 options:
A) 
used by economic decision-makers to inform others about their plans.
B) 
the method by which government planners inform economic decision-makers about the types of decisions they should make.
C) 
the method by which firms determine their profit maximizing…