# ECON 112 QUIZ 3

Econ 112 Take-Home Quiz 3 1
Chapter 11 Questions
1. A fixed cost:
A) will exist only in the long run.
B) depends on the level of output.
C) can be positive, even if the firm doesn’t produce any output in the short run.
D) decreases until the point of diminishing returns is reached.
2. Marginal cost is the:
A) increase in total cost when one more unit of output is produced.
B) reduction in cost from economies of scale.
C) ratio of average total cost to total cost.
D) increase in output from the addition of one unit of labor.
Use the following to answer question 10:
Figure: The Average Total Cost Curve
3. (Figure: The Average Total Cost Curve) Look at the figure The Average Total Cost Curve. In the figure, the total cost of producing three pairs of boots is approximately:
a. \$24.
b. \$72.
c. \$75.
d. \$216.
4. Average total cost is:
a the change in variable cost divided by the change in quantity.
b total cost divided by quantity.
c the change in quantity divided by the change in labor costs.
d total cost times quantity.
Econ 112 Take-Home Quiz 3 2
5. In the short run:
A. all inputs are fixed.
B. all inputs are variable.
C. some inputs are fixed and some inputs are variable.
D. all costs are variable.
6. Diminishing marginal returns occur when:
A. each additional unit of a variable factor adds more to total output than the previous unit.
B. an additional variable factor adds less to total output than the previous unit.
C. the marginal product of a variable factor is increasing but at a decreasing rate.
D. total product decreases.
7. Which of the following cost concepts is correctly defined?
A. MC = ΔTC / ΔFC
B. ATC = VC + FC
C. ATC = AVC + AFC
D. TC = AVC + AFC
Use the following to answer question 15:
8. (Table: Production Function for Soybeans) The table shows a production function for soybeans. Assume that the fixed input,
Econ 112 Take-Home Quiz 3 3
capital, is 10 acres of land and a tractor, which have a combined cost of \$150 per day. The cost of labor is \$100 per worker per day.
The total cost of producing 25 bushels of soybeans is:
A) \$50
B) \$100
C) \$150
D) \$250
9. When a cherry orchard in Oregon adds a worker, the total cost of production increases by \$24,000. Adding the worker increases total cherry output by 600 pounds. Therefore, the marginal cost of the last pound of cherries produced is:
A. \$19.
B. \$4,000.
C. \$24,000.
D. \$40
10. The larger the output, the greater the quantity of output over which fixed cost is spread. Called the ________ effect, this leads
to a ___________.
A) spreading; lower average fixed cost.
B) spreading; higher average fixed cost.
C) diminishing returns; lower average variable cost.
D) diminishing returns; higher average variable cost.
Chapter 12 Questions
11. Which of the following is true for firms operating under perfect competition?
A. There are significant barriers to entry
B. There is a very high fixed cost, which reduces the number of firms in the industry
C. They must accept the market price, regardless of their output level
D. They can earn economic profit in the long run
Figure #1 – Perfectly Competitive Industry
Econ 112 Take-Home Quiz 3 4
12. (Using the information in Figure #1). If the market price were \$6, firms would earn:
A. Positive economic profit
B. Negative economic profit
C. Zero economic profit
13. (Using the information in Figure #1). If the market price were \$10, firms would earn:
A. Positive economic profit
B. Negative economic profit
C. Zero economic profit
14. (Using the information in Figure #1). If the market price were \$4, firms would earn:
A. Positive economic profit
B. Negative economic profit
C. Zero economic profit
15. (Using the information in Figure #1). The shut-down price is:
A. \$2
B. \$4
C. \$6
D. \$8
16. (Using the information in Figure #1). The break-even price is:
A. \$2
B. \$4
C. \$6
D. \$8
17. (Using the information in Figure #1). In the long run, firms would expect the market price to be:
A. \$8
Econ 112 Take-Home Quiz 3 5
B. \$6
C. \$4
D. \$2
18. (Using the information in Figure #1). If the short run price were \$10, then in the long run firms would:
A. Continue to receive the economic profit/loss
B. Enter the industry
C. Exit the industry
Chapter 13 Questions
19. Firms under monopoly maximize profit by choosing an output level where:
A. P=MC
B. MR=P
C. MR=MC
D. D=MC
Figure #2 – Monopoly
20. (Using the information in Figure #2). If the industry were perfectly competitive, the industry output level would be:
A. 4
B. 3
C. 2
D. 1
21. (Using the information in Figure #2). A monopolist would maximize profit by producing ____ units.
A. 1
B. 2
C. 3
D. 4
Econ 112 Take-Home Quiz 3 6
22. (Using the information in Figure #2). A monopolist would maximize profit by charging ____ per unit.
A. \$4
B. \$6
C. \$8
D. \$10
23. (Using the information in Figure #2). A monopolist would receive short run economic profit of:
A. \$24
B. \$16
C. \$12
D. \$8
24. (Using the information in Figure #2). In the long run, the monopolist continues to earn the same profit as in the short run:
A. True
B. False
25. A natural monopoly arises when entering an industry requires:
A. Very high fixed cost
B. Approval by strict regulations
C. Very high taxes
D. Specialized technical knowledge
Figure #3 – Monopoly with constant MC of \$3 and no fixed cost
26. (Using the information in Figure #3). The profit maximizing quantity for this monopolist is:
A. 10
B. 20
C. 30
D. 40
27. (Using the information in Figure #3). Using the formula for economic profit: Profit=(P-ATC)xQ*, determine profit for the monopolist:
A. \$40
B. \$60
C. \$80
D. \$150
Econ 112 Take-Home Quiz 3 7
Chapter 14 Questions
Figure #4 – Oligopoly (Duopoly) Payoff Matrix
28. (Using the information in Figure #4). When a one-time game is played, the dominant strategy for West Mfg. is to:
A. Charge a low price
B. Charge a high price
29. (Using the information in Figure #4). The Nash equilibrium is:
A. Both firms charge a low price
B. West Mfg charges a low price, East Mfg charges a high price
C. West Mfg charges a high price, East Mfg charges a low price
D. Both firms charge high price
E. A Nash equilibrium does not exist
30. (Using the information in Figure #4). If the game were repeated 100 times more, the firms would most likely:
A. Always play the Nash equilibrium
B. Always charge a high price
C. Sometimes play a high price
D. Impossible to determine
31. Firms officially agree to collaboratively set industry output to maximize industry profit. This is known as:
A. Tacit collusion
B. Nash equilibrium
C. Cartel
32. Firms who behave cooperatively to maximize joint profits, but are not actively communicating, are engaging in:
A. Overt-collusion
B. Nash equilibrium
C. Tacit collusion
Econ 112 Take-Home Quiz 3 8
Chapter 15 Questions
33. Industries under monopolistic competition have:
A. No barriers to entry
B. Significant barriers to entry
C. Extremely high fixed cost
D. Very strict regulations
34. Monopolistic competitors produce:
A. Commodities
B. Standardized products
C. Differentiated products
D. Inputs
Figure #5 – Monopolistic Competition
35. (Using the information in Figure #5). The profit maximizing level of output for this monopolistic competitor is:
A. 1
B. 3
C. 4
D. 6
36. (Using the information in Figure #5). The profit maximizing price for this monopolist is:
A. \$5
B. \$7
C. \$9
D. \$11
37. (Using the information in Figure #5). In the short run, this monopolistic competitor is earning:
A. Positive economic profit
B. Negative economic profit
Econ 112 Take-Home Quiz 3 9
C. Zero economic profit
38. (Using the information in Figure #5). In the long run, profits will:
A. Remain the same
B. Increase to zero
C. Decrease to zero
39. (Using the information in Figure #5). In the long run, the:
A. MC curve will shift up
B. MC curve will shift down
C. Demand curve will shift right
D. Demand curve will shift left

Don't use plagiarized sources. Get Your Custom Essay on
ECON 112 QUIZ 3
Just from \$13/Page Pages (550 words)
Approximate price: -

Why Work with Us Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree. We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help. Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support. Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed. Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services. Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

## Calculate the price of your order

Total price:
\$0.00

How it works? Fill in the order form and provide all details of your assignment. Proceed with the payment

Choose the payment system that suits you most. Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.  ## Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.  An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.  Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.  Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.