Economics Chapter 12 During the summer Alex runs a lawn-mowing service

Unlock access to all the studying documents.

View Full Document

Reference: Ref 12-22

(Table: Variable Costs for Lawns) Look at the table Variable Costs for Lawns.

During the summer, Alex runs a lawn-mowing service, and lawn-mowing is a

perfectly competitive industry. The table shows his variable costs for lawn-mowing

and the number of lawns mowed. His only fixed cost is $1,000 for the mower. His

variable costs include fuel, his time, and mower parts. He calculates the variable

costs as shown in the table. What is Alex‘s break–even price?

Answer $100.00

272. Multiple Choice: (Table: Variable Costs for Lawns) Lo...

Question (Table: Variable Costs for Lawns) Look at the table Variable Costs for Lawns.

During the summer Alex runs a lawn–mowing service, and lawn-mowing is a

perfectly competitive industry made up of 100 identical firms. The table shows his

variable costs for lawn-mowing and the number of lawns mowed. Alex‘s fixed cost

is $1,000 for the mower. His variable costs include fuel, his time, and mower parts.

If the price for mowing a lawn is $60, how many lawns will Alex mow?

Answer 0

273. Multiple Choice: (Table: Variable Costs for Lawns) Lo...

Question

Points: 0

(Table: Variable Costs for Lawns) Look at the table Variable Costs for Lawns.

During the summer Alex runs a lawn–mowing service, and lawn-mowing is a

perfectly competitive industry made up of 100 identical firms. The table shows his

variable costs for lawn-mowing and the number of lawns mowed. Alex‘s fixed cost

is $1,000 for the mower. His variable costs include fuel, his time, and mower parts.

If the price for mowing a lawn is $60, how much is Alex‘s total revenue at the profit–

maximizing output?

Answer $60

274. Multiple Choice: (Table: Variable Costs for Lawns) Lo...

Question (Table: Variable Costs for Lawns) Look at the table Variable Costs for Lawns.

During the summer Alex runs a lawn–mowing service, and lawn-mowing is a

perfectly competitive industry made up of 100 identical firms. The table shows his

variable costs for lawn-mowing and the number of lawns mowed. Alex‘s fixed cost

is $1,000 for the mower. His variable costs include fuel, his time, and mower parts.

If the price for mowing a lawn is $60, how much is Alex‘s total cost at the profit–

maximizing output?

Answer $60

275. Multiple Choice: (Table: Variable Costs for Lawns) Lo...

Question (Table: Variable Costs for Lawns) Look at the table Variable Costs for Lawns.

During the summer Alex runs a lawn–mowing service, and lawn-mowing is a

perfectly competitive industry made up of 100 identical firms. The table shows his

variable costs for lawn-mowing and the number of lawns mowed. Alex‘s fixed cost

is $1,000 for the mower. His variable costs include fuel, his time, and mower parts.

If the price for mowing a lawn is $60, how much is Alex‘s profit at the profit–

maximizing output?

Answer $10

Points: 0

276. Multiple Choice: (Table: Variable Costs for Lawns) Lo...

Question (Table: Variable Costs for Lawns) Look at the table Variable Costs for Lawns.

During the summer Alex runs a lawn–mowing service, and lawn-mowing is a

perfectly competitive industry made up of 100 identical firms. The table shows his

variable costs for lawn-mowing and the number of lawns mowed. Alex‘s fixed cost

is $1,000 for the mower. His variable costs include fuel, his time, and mower parts.

If the price for mowing a lawn is $60, how much is Alex‘s profit per unit at the profit–

maximizing output?

$10.00

277. Multiple Choice: (Table: Variable Costs for Lawns) Lo...

Question (Table: Variable Costs for Lawns) Look at the table Variable Costs for Lawns.

During the summer Alex runs a lawn–mowing service, and lawn-mowing is a

perfectly competitive industry made up of 100 identical firms. The table shows his

variable costs for lawn-mowing and the number of lawns mowed. Alex‘s fixed cost

is $1,000 for the mower. His variable costs include fuel, his time, and mower parts.

If the price for mowing a lawn is $40, how many lawns will Alex mow?

Answer 0

278. Multiple Choice: (Table: Variable Costs for Lawns) Lo...

Question (Table: Variable Costs for Lawns) Look at the table Variable Costs for Lawns.

During the summer Alex runs a lawn–mowing service, and lawn-mowing is a

perfectly competitive industry made up of 100 identical firms. The table shows his

variable costs for lawn-mowing and the number of lawns mowed. Alex‘s fixed cost

is $1,000 for the mower. His variable costs include fuel, his time, and mower parts.

If the price for mowing a lawn is $40, how much is Alex‘s total revenue at the profit–

maximizing output?

Answer $1,000

Points: 0

279. Multiple Choice: (Table: Variable Costs for Lawns) Lo...

Question (Table: Variable Costs for Lawns) Look at the table Variable Costs for Lawns.

During the summer Alex runs a lawn–mowing service, and lawn-mowing is a

perfectly competitive industry, made up of 100 identical firms. The table shows his

variable costs for lawn-mowing and the number of lawns mowed. Alex‘s fixed cost

is $1,000 for the mower. His variable costs include fuel, his time, and mower parts.

If the price for mowing a lawn is $40, how much is Alex‘s total cost at the profit–

maximizing output?

Answer $1,000

280. Multiple Choice: (Table: Variable Costs for Lawns) Lo...

Question (Table: Variable Costs for Lawns) Look at the table Variable Costs for Lawns.

During the summer Alex runs a lawn–mowing service, and lawn-mowing is a

perfectly competitive industry made up of 100 identical firms. The table shows his

variable costs for lawn-mowing and the number of lawns mowed. Alex‘s fixed cost

is $1,000 for the mower. His variable costs include fuel, his time, and mower parts.

If the price for mowing a lawn is $40, how much is Alex‘s profit at the profit–

maximizing output?

Answer –$10

281. Multiple Choice: (Table: Variable Costs for Lawns) Lo...

Question

Points: 0

(Table: Variable Costs for Lawns) Look at the table Variable Costs for Lawns.

During the summer Alex runs a lawn–mowing service, and lawn-mowing is a

perfectly competitive industry made up of 100 identical firms. The table shows his

variable costs for lawn-mowing and the number of lawns mowed. Alex‘s fixed cost

is $1,000 for the mower. His variable costs include fuel, his time, and mower parts.

If the price for mowing a lawn is $40, how much is Alex‘s profit per unit at the profit–

maximizing output?

–$20.00

282. Multiple Choice: (Table: Variable Costs for Lawns) Lo...

Question (Table: Variable Costs for Lawns) Look at the table Variable Costs for Lawns.

During the summer Alex runs a lawn–mowing service, and lawn-mowing is a

perfectly competitive industry made up of 100 identical firms. The table shows his

variable costs for lawn-mowing and the number of lawns mowed. Alex‘s fixed cost

is $1,000 for the mower. His variable costs include fuel, his time, and mower parts.

If the price for mowing a lawn is $70, how many lawns will Alex mow?

Answer 20

283. Multiple Choice: (Table: Variable Costs for Lawns) Lo...

Question (Table: Variable Costs for Lawns) Look at the table Variable Costs for Lawns.

During the summer Alex runs a lawn–mowing service, and lawn-mowing is a

perfectly competitive industry made up of 100 identical firms. The table shows his

variable costs for lawn-mowing and the number of lawns mowed. Alex‘s fixed cost

is $1,000 for the mower. His variable costs include fuel, his time, and mower parts.

If the price for mowing a lawn is $70, how much is Alex‘s total revenue at the profit–

maximizing output?

$1,800

Points: 0

284. Multiple Choice: (Table: Variable Costs for Lawns) Lo...

Question (Table: Variable Costs for Lawns) Look at the table Variable Costs for Lawns.

During the summer Alex runs a lawn–mowing service, and lawn-mowing is a

perfectly competitive industry made up of 100 identical firms. The table shows his

variable costs for lawn-mowing and the number of lawns mowed. Alex‘s fixed cost

is $1,000 for the mower. His variable costs include fuel, his time, and mower parts.

If the price for mowing a lawn is $70, how much is Alex‘s total cost at the profit–

maximizing output?

Answer $3,500

285. Multiple Choice: (Table: Variable Costs for Lawns) Lo...

Question (Table: Variable Costs for Lawns) Look at the table Variable Costs for Lawns.

During the summer Alex runs a lawn–mowing service, and lawn-mowing is a

perfectly competitive industry made up of 100 identical firms. The table shows his

variable costs for lawn-mowing and the number of lawns mowed. Alex‘s fixed cost

is $1,000 for the mower. His variable costs include fuel, his time, and mower parts.

If the price for mowing a lawn is $70, how much is Alex‘s profit at the profit–

maximizing output?

Answer $3,500

286. Multiple Choice: (Table: Variable Costs for Lawns) Lo...

Question (Table: Variable Costs for Lawns) Look at the table Variable Costs for Lawns.

During the summer Alex runs a lawn–mowing service, and lawn-mowing is a

perfectly competitive industry made up of 100 identical firms. The table shows his

variable costs for lawn-mowing and the number of lawns mowed. Alex‘s fixed cost

is $1,000 for the mower. His variable costs include fuel, his time, and mower parts.

If the price for mowing a lawn is $70, how much is Alex‘s profit per unit at the profit–

maximizing output?

Answer –$10

Points: 0

287. Multiple Choice: (Table: Variable Costs for Lawns) Lo...

Question (Table: Variable Costs for Lawns) Look at the table Variable Costs for Lawns.

During the summer Alex runs a lawn–mowing service, and lawn-mowing is a

perfectly competitive industry made up of 100 identical firms. The table shows his

variable costs for lawn-mowing and the number of lawns mowed. Alex‘s fixed cost

is $1,000 for the mower. His variable costs include fuel, his time, and mower parts.

Which of the following is a point on Alex‘s short-run supply curve?

Answer P = $5; Q = 10.

288. Multiple Choice: (Table: Variable Costs for Lawns) Lo...

Question (Table: Variable Costs for Lawns) Look at the table Variable Costs for Lawns.

During the summer Alex runs a lawn–mowing service, and lawn-mowing is a

perfectly competitive industry made up of 100 identical firms. The table shows his

variable costs for lawn-mowing and the number of lawns mowed. Alex‘s fixed cost

is $1,000 for the mower. His variable costs include fuel, his time, and mower parts.

Which of the following is a point on the industry short-run supply curve?

Answer P = $5; Q = 100.

289. Multiple Choice: In a perfectly competitive market:

Question In a perfectly competitive market:

Answer consumers are price-takers.

Points: 0

290. Multiple Choice: Perfectly competitive industries are …

Question Perfectly competitive industries are characterized by:

Answer few sellers and many buyers.

291. Multiple Choice: In perfect competition:

Question In perfect competition:

292. Multiple Choice: When a firm produces at an output lev…

Question When a firm produces at an output level at which MR = MC, it is operating at the:

Answer shut-down level.

293. Multiple Choice: The addition to the total revenue fro...

Question The addition to the total revenue from selling one more unit of the good is:

Answer market price.

Points: 0

294. Multiple Choice: Ashley, who makes knitted caps, deter…

Question Ashley, who makes knitted caps, determines that her marginal cost of producing

one more knitted cap is equal to $10. A consumer offers her $12 if she sells one

more knitted cap to her. Ashley will:

Answer not sell the additional knitted cap, since she does not know what her total

costs will be.

295. Multiple Choice: Tony runs Read Economic Reports. If T…

Question Tony runs Read Economic Reports. If Tony finds that the cost of completing an

additional report is $100 and someone offers him $125 to complete this additional

report, Tony should:

Answer not complete the additional report, since he is at a shut-down point.

296. Multiple Choice: Firms will make a profit in the long ...

Question Firms will make a profit in the long run or short run if the price is:

Answer equal to marginal revenue.

Points: 0

297. Multiple Choice: If a firm‘s economic profits are equa...

Question If a firm’s economic profits are equal to zero, its accounting profits are most likely:

Answer less than zero.

298. Multiple Choice: A firm produces at the output level a...

Question A firm produces at the output level at which its average total costs are minimized.

At this output level, its average total costs are equal to all of the following except:

Answer price.

299. Multiple Choice: Maximizing profits also means that a ...

Question Maximizing profits also means that a firm is attempting to:

Answer make as much output as possible.

300. Multiple Choice: In the short run, a firm will continu...

Question In the short run, a firm will continue to sell its product as long as:

Answer it is making a positive profit.

Points: 0

301. Multiple Choice: In the short run, a firm will produce...

Question In the short run, a firm will produce as long as the price is greater than its:

Answer ATC.

302. Multiple Choice: In the short run, fixed costs:

Question In the short run, fixed costs:

Answer are an important feature in a firm’s decision to produce or not produce.

303. Multiple Choice: A perfectly competitive firm will pro…

Question A perfectly competitive firm will produce:

Answer whenever it can.

304. Multiple Choice: In the short run, for a perfectly com...

Points: 0

Question In the short run, for a perfectly competitive firm, the portion of the MC curve at or

above the shut-down price is also its:

individual demand curve.

305. Multiple Choice: Hank operates a perfectly competitive…

Question Hank operates a perfectly competitive firm in the long run. For several periods the

market price has been $20, and he knows his break–even price is $22. Hank

should:

Answer stay in the industry, since he can cover his fixed costs.

306. Multiple Choice: Figure: The Perfectly Competitive Fir…

Question Figure: The Perfectly Competitive Firm II

Reference: Ref 12-24

(Figure: The Perfectly Competitive Firm II) Look at the figure The Perfectly

Competitive Firm II. If this firm’s MR curve is MR1, the firm will maximize profit by

producing ________ units of output and its economic profit will be ________.

Points: 0

307. Multiple Choice: Figure: The Perfectly Competitive Fir…

Question Figure: The Perfectly Competitive Firm II

Reference: Ref 12-24

(Figure: The Perfectly Competitive Firm II) Look at the figure The Perfectly

Competitive Firm II. If this firm’s MR curve is MR2, then this firm will maximize profit

by producing ________ units of output and its economic profit will be ________.

308. Multiple Choice: The horizontal sum of individual firm…

Question The horizontal sum of individual firms‘ MC curves at and above the shut-down price

is the:

Points: 0

309. Multiple Choice: In a perfectly competitive industry, ...

Question In a perfectly competitive industry, there are 10 firms, each with an MC curve that

can be expressed as follows: MC = 5q, where q is the level of output for each firm.

The minimum point of the AVC curve is $5. Which of the following equations would

describe the industry supply curve for the industry, where Q is the market quantity

and P is the market price?

Answer P = Q for Q ≥ 10

310. Multiple Choice: In the long run, each firm in a perfe...

Question In the long run, each firm in a perfectly competitive industry will:

311. Multiple Choice: If the long-run market supply curve f…

Question If the long–run market supply curve for a perfectly competitive market is horizontal,

then this industry is one that exhibits:

Points: 0

312. Multiple Choice: In a perfectly competitive market, ta...

Question In a perfectly competitive market, tastes and preferences lead to an increase in the

demand for the good. Holding everything else constant, this will lead to an increase

in price that will result in:

313. Multiple Choice: A perfectly competitive industry with...

Question A perfectly competitive industry with constant costs initially operates in long–run

equilibrium. When demand increases, one will observe that:

314. Multiple Choice: A perfectly competitive industry with...

Question A perfectly competitive industry with constant costs initially operates in long–run

equilibrium. When demand increases, one will observe that in the long and short

runs:

Points: 0

315. Multiple Choice: In the long run, all of the firms in ...

Question In the long run, all of the firms in a perfectly competitive industry will:

316. Multiple Choice: Bob runs a pedicure business in a per…

Question Bob runs a pedicure business in a perfectly competitive industry. He knows that he

will break even if the price of pedicures is $15 but that he will have to shut down if

the price is $11. If the market demand in the industry is P = 30 – (0.2)Q and the

market supply is P = (0.2)Q, then in the short run, Bob will:

317. Essay: Why is the market for soybeans a bett...

Question Why is the market for soybeans a better example of perfect competition than the

market for cars?

318. Essay: Why are perfectly competitive firms d...

Question Why are perfectly competitive firms described as “price-takers”?

Points: 0

319. Essay: State and explain the price-taking fi...

Question State and explain the price-taking firm’s optimal output rule.

320. Essay: Why does it make sense for a firm to ...

Question Why does it make sense for a firm to shut down in the short run if the price falls

below minimum average variable cost?

321. Essay: Sam is one of many potato growers who...

Question Sam is one of many potato growers who sell potatoes to a large food–processing

plant. The price of a bushel of potatoes is $4, and Sam sells 100 bushels at that

price. He has $250 of fixed cost. Sam figures if he produces one more bushel of

potatoes, his total variable costs will increase from $175 to $180. Should Sam

produce any more potatoes at $4? Explain. Will he earn a positive economic profit?

Show how you came to your answer.

322. Essay: A perfectly competitive industry is i...

Question A perfectly competitive industry is in long–run equilibrium. Now suppose that firms

in the industry experience a decrease in fixed costs. Describe how this change will

affect short-run economic profits. How will this industry adjust in the long run?

Answer

Points: 0

323. Essay: A perfectly competitive tomato indust...

Question A perfectly competitive tomato industry is in long-run equilibrium. Now suppose

that some consumers are getting sick by eating tomatoes that contain salmonella.

Describe how this change will affect short-run economic profits. What will happen

to the number of tomato growers in the long run? How will price and output in this

industry adjust in the long run?

324. Essay: Consider a perfectly competitive corn...

Question Consider a perfectly competitive corn industry that is experiencing positive

economic profit. Describe how the long–run industry supply curve might slope

upward rather than be horizontal.

325. Essay: Explain how the long-run perfectly co...

Question Explain how the long–run perfectly competitive equilibrium is efficient.

326. Essay: Reference: Ref 12-23 (Table: Lilly‘s...

Question

Points: 0

Delete Points Update Hide Question Details

Select: All None Select by Type:

– Question Type –

Reference: Ref 12-23

(Table: Lilly‘s Apple Orchard) Look at the table Lilly‘s Apple Orchard. Lilly is the

price-taking owner of an apple orchard; her variable costs are given in the table. Her

orchard has fixed costs of $30. If the price of a bushel of apples is $80, how many

bushels will Lilly produce? Is this a long–run equilibrium? If not, what will be the

price of a bushel of apples in the long run? Show your work.