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Submitted By linkinage
Words 2297
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1
Marks: 1
Based on data in the table, which of the statements below is true at a production level of 4 units?

Quantity | Total Revenue | Total Cost | 0 | $0 | $4 | 1 | $20 | $14 | 2 | $40 | $26 | 3 | $60 | $40 | 4 | $80 | $56 | 6 | $120 | $94 | 7 | $140 | $116 | 8 | $160 | $140 | 9 | $180 | $166 |

Choose one answer. | a. Marginal cost is $6. | | | b. Total revenue is greater than total variable cost. | | | c. Total revenue is greater than total cost. | | | d. Marginal revenue is less than marginal cost. | | | e. Both b and c are correct. | |

Question
2
Marks: 1
Susan quit her teaching job, which paid her $36,000 per year, in order to start her own catering business. She spent $12,000 of her savings, which had been earning 10% interest per year, on equipment for her business. She also borrowed $12,000 from her bank at (10% interest) and spent it on equipment. For the past several months, she has spent $1000 per month on ingredients and other variable costs. She has also taken in $3500 in monthly revenue for the past several months.
Choose one answer. | a. In the short run, Susan should shut down her business and in the long run she should exit the industry. | | | b. In the short run, Susan should continue to operate her business, but in the long run she should exit the industry. | | | c. In the short run, Susan should continue to operate her business, but in the long run she will probably face competition from newly entering firms. | | | d. In the short run, Susan should continue to operate her business, and she is also in long-run equilibrium. | |

Question
3
Marks: 1
A firm in a competitive market has the following cost structure.

Output | Total Cost | 0 | $5 | 1 | $10 | 2 | $12 | 3 | $15 | 4 | $24 | 5 | $40 |

This firm will shut down
Choose one answer. | a. if

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