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12th
grade
AP Micro Unit 3 Cost of Production and Market Structures
25 questions
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- 1. Multiple ChoiceWhich allows increasing returns to occur with production?increasing costsworker specializationunderutilizationfixed resources
- 2. Multiple ChoiceTony opens up a hot chocolate stand for two hours. He spends $10 for ingredients and sells $60 worth of tasty beverages. In the same two hours, he could have provided Uber services (illegally because he isn't 18) and earned $40. Tony's accounting profit is ____ and an economic profit of ____.$50, $10$90, $50$10, $50$50, $90
- 3. Multiple ChoiceWhich description fits the total-cost curve when the marginal product of labor diminishesThey are linear.The slope increases as output increases.The slope decreases as input increases.The curve is a parabolic inverse "u" that contains a peak.
- 4. Multiple ChoiceThe marginal cost curve typically does which of the following?Increases at a fixed rate.Decreases and eventually increases.Decreases at a decreasing rate.Increases and eventually decreases.
- 5. Multiple ChoiceThe term for costs that cannot be avoided in the short runTotal CostFixed CostAverage CostVariable Cost
- 6. Multiple ChoiceTerm for costs that change with productionFixed CostAverage CostVariable CostMarginal Cost
- 7. Multiple ChoiceExtra cost of producing one more unitMarginal costVariable CostFixed CostAverage Cost
- 8. Multiple ChoiceATC x ___=TCVariable CostQuantityPriceNone of the Above
- 9. Multiple ChoiceWhat is the only curve that continues to fall as output increases?Average Fixed CostAverage Variable CostAverage Total CostMarginal Cost
- 10. Multiple ChoiceThese costs are calculate by diving the cost by the outputFixed CostAverage CostTotal CostVariable Cost
- 11. Multiple ChoiceThe demand curve for a perfectly competitive firm is:perfectly inelastic.perfectly elastic.downward sloping.relatively but not perfectly elastic.
- 12. Multiple ChoiceIn the short run, a perfectly competitive firm produces output and breaks even if:the firm produces the quantity at which P < ATC.the firm produces the quantity at which P = ATC.the firm produces the quantity at which P > ATC.the firm produces the quantity at which P = (TR/Q + TC/Q) × Q.
- 13. Multiple ChoiceZoe's Bakery determines that P < ATC and P > AVC. Zoe should:continue to operate even though she is taking an economic loss.continue to operate, as she is making an economic profit.shut down immediately, as she is taking an economic loss.raise the price until she has maximized her profits.
- 14. Multiple ChoiceThe difference between a firm's total revenue and its total opportunity cost is the firm'smarginal revenueeconomic profitmarginal profitnormal profit
- 15. Multiple ChoiceWhen marginal revenue equals marginal cost, a perfectly competitive firm isdetermining the price it will set.maximizing its revenuesestablishing its shutdown pointmaximizing its profit.
- 16. Multiple ChoiceWhich of the following is a condition of perfect competition?products produced by rival firms are perfect substitutesindividual firms can affect market supplyindustry sales are smallrestricted entry and exit
- 17. Multiple ChoiceThe market structure with the most control over prices and as a result, the highest prices is:MonopolyMonopolistic CompetitionPerfect CompetitionOligopoly
- 18. Multiple ChoiceIn this market structure, products are similar but have some differences.MonopolyMonopolistic CompetitionPerfect CompetitionOligopoly
- 19. Multiple ChoiceWhen companies that form on oligopoly cooperate together to set or fix prices at a given level, they are engaging inMonopolyVertical IntegrationCollusionRationing
- 20. Multiple ChoiceU.S. agriculture is most closely associated with which of the following markets?monopolistic competitionperfect competitionmonopolyoligopoly
- 21. Multiple ChoiceIf competition is inconvenient and impractical, what kind of monopoly tends to
develop?natural monopolygeographic monopolytechnological monopolygovernment monopoly - 22. Multiple ChoiceIf a company was trying to figure out a way to advertise the differences in their
shoes, that company would most likely fit in the market structure ofPerfect CompetitionMonopolistic CompetitionOligopolyMonopoly - 23. Multiple ChoiceThis is a market dominated by a few large sellersoligopolymonopolymonopolistic competitionperfect competition
- 24. Multiple ChoiceAT&T, Verizon, and T-Mobile are an example of a(n)MonopolyOligopoly
- 25. Multiple ChoiceWhat type of market structure has a few firms, and a lot of control over price?Perfect CompetitionOligopolyMonopolistic CompetitionMonopoly
- Answer choicesTagsAnswer choicesTags