In the graph above, the point d represents values resulting in ____________.
Answer
Correct Answer:
Unemployment
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How do shifts in supply affect a constant-cost industry in the long run?
Answer
Correct Answer:
Eliminate profits
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______ are factors outside the firm’s control that raise the firm’s costs as industry output expands.
Answer
Correct Answer:
External diseconomies of scale
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In a(n) ______ industry, cost curves do not change as output changes.
Answer
Correct Answer:
Constant-cost
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A firm will get a normal return on the use of its resources at ______ economic profits in the ______ run.
Answer
Correct Answer:
Zero; long
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In an expanding market, the market supply curve will ______.
Answer
Correct Answer:
Shift to the right
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Which of the following will most likely happen if P < ATC?
Answer
Correct Answer:
A firm will operate in the short run but take a loss.
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A graph shows the portion of the marginal costs above the average variable costs for all the firms in the corn market for a period of six months. This graph is a ______.
Answer
Correct Answer:
Short-run market supply curve
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A firm will always shut down when it cannot cover its average ______ costs.
Answer
Correct Answer:
Variable
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Which of the following shows the equilibrium output that a firm will provide at various prices in the short run?
Answer
Correct Answer:
A short-run supply curve
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Which of the following is an accurate statement about a firm with zero economic profits?
Answer
Correct Answer:
It can cover both its implicit and explicit costs
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What is the term used for the additional income derived from the production of one unit of the good?
Answer
Correct Answer:
Marginal revenue
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A firm maximizes profits by maximizing the difference between ______.
Answer
Correct Answer:
Total revenue and total costs
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In a perfectly competitive market, a supplier will have the most difficulty selling his product when his price is ______ the market price.
Answer
Correct Answer:
Higher than
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Which of the following is an accurate statement about a perfectly competitive market?
Answer
Correct Answer:
It has few barriers to either entry or exit.
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In a perfectly competitive market, there are ______ buyers and ______ sellers.
Answer
Correct Answer:
Many; many
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The portion of the MC curve above the AVC curve is called the short-run supply curve.
Answer
Correct Answer:
True
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Short-run market curve is the _____ summation of the individual firms’ supply curves in the market
Answer
Correct Answer:
Horizontal
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A firm should always produce at the output where _____ is called the profit-maximizing level of output.