1. Which of the following best explains why wages in service industries have increased along with wages in manufacturing industries, even though service industry productivity has not increased as much? because a. the opportunity cost of working in the service industry is the wage in the manufacturing industry b. the opportunity cost of working in the manufacturing industry is the wage in the service industry C. the service and manufacturing industry are complements d. working in the service industry yields much more util e. MC >MB for service industry workers
• 1. Which of the following best explains why wages in service industries have increased along with wages in manufacturing industries, even though service industry productivity has not increased as much? Because • a. the opportunity cost of working in the service • industry is the wage in the manufacturing industry. • b. the opportunity cost of working in the manufacturing • industry is the wage in the service industry. • c. the service and manufacturing industry are • complements. • d. working in the service industry yields much more • utility. • e. MC > MB for service industry workers
a firm's profit is equal to which of the following? the value of its sales b. marginal revenue minus marginal cost total sales minus wages d. total revenue minus total cost none of the above
• 2. A firm's profit is equal to which of the following? • a. the value of its sales • b. marginal revenue minus marginal cost • c. total sales minus wages • d. total revenue minus total cost • e. none of the above
3. Which of the following is not a characteristic of a perfectly competitive fa rm pe entec t y elastic demand curve b. price taker control over market price cde many sellers all of the above are characteristics of perfectly competitive firms
• 3 . Which of the following is not a characteristic of a perfectly competitive firm? • a. perfectly elastic demand curve • b. price taker • c. control over market price • d. many sellers • e. all of the above are characteristics of • perfectly competitive firms
Which of the following can a firm vary in the long-run? a. no factors of production b. all factors of production all but one factor of production d. only one factor of production more information about the firm is needed to answer this question
• 4. Which of the following can a firm vary in the long-run? • a. no factors of production • b. all factors of production • c. all but one factor of production • d. only one factor of production • e. more information about the firm is • needed to answer this question
5. When the quantity of an input can be altered in the short-run the input is fixed abcde variable implicit explicit efficient
• 5. When the quantity of an input can be altered in the short-run, the input is • a. fixed. • b. variable. • c. implicit. • d. explicit. • e. efficient
a perfectly competitive firm will maximize profit when a. total revenue exceeds total cost b. marginal revenue exceeds marginal cost price equals marginal cost d. price equals marginal benefit marginal benefit exceeds marginal cost
• 6. A perfectly competitive firm will maximize profit when • a. total revenue exceeds total cost. • b. marginal revenue exceeds marginal cost. • c. price equals marginal cost. • d. price equals marginal benefit. • e. marginal benefit exceeds marginal • cost
7. A firm will shut down when it is not earning a profit b. price does not equal marginal cost d price is less than average cost revenue is less than variable costs revenue is less than total costs
• 7. A firm will shut down when • a. it is not earning a profit. • b. price does not equal marginal cost. • c. price is less than average cost. • d. revenue is less than variable costs. • e. revenue is less than total costs
8. An increase in supply could be caused by which of the following? a an improvement in technology b. an increase in input prices an increase in income d. an increase in the price of the product a decrease in the number of suppliers
• 8. An increase in supply could be caused by which of the following? • a. an improvement in technology • b. an increase in input prices • c. an increase in income • d. an increase in the price of the product • e. a decrease in the number of suppliers
The difference between the price a seller receives and her marginal cost is Known as a profit b. marginal revenue average fixed cost cde pI roaucer surplus excess supply
• 9. The difference between the price a seller receives and her marginal cost is known as • a. profit. • b. marginal revenue. • c. average fixed cost. • d. producer surplus • e. excess supply
10. The difference between a firm's average total cost and its average variable cost is its a. profit b. marginal revenue average fixed cost cde producer surplus excess supply
• 10. The difference between a firm’s average total cost and its average variable cost is its • a. profit. • b. marginal revenue. • c. average fixed cost. • d. producer surplus • e. excess supply