Question

At the shut-down point, the:

a. firm is making an accounting profit.

b. firm is indifferent to whether it operates or shuts down.

c. firm is making a normal profit.

d. industry will attract new entrants.

Which of the inputs can be altered in the short run?

a. The number of hours that existing employees work.

b. The amount of heavy machinery used in the plant.

c. The total number of plants in operation.

d. The capacity of the plant.

In what type of market structure does a firm have no close substitutes for its product?

a. monopolistic competition

b. oligopoly

c. perfect competition

d. monopoly

By producing a number of products that are interdependent, firms are able to produce and market these goods at lower costs. This is known as:

a. economies of scope.

b. diseconomies of scale.

c. constant returns to scale.

d. economies of scale.

Corn is a perfectly competitive commodity. In the marketplace, the demand curve for corn is:

a. upward sloping.

b. downward sloping.

c. perfectly inelastic.

d. perfectly elastic.

Answer 1

1.Shut down is a point where a firm is only able to cover average variable cost.So,it is indifferent between shutting down and staying in business.

Answer-B

2.In the short run a firm can only alter the quantity of variable inputs like wages and work hours.

Answer-A

3.A monopoly produces unique products with no close substitutes.

Answer-D

4.Economies of scale is when a firm can produce goods at a lower cost than other existing firms.

Answer-D

5.The demand curve for a perfectly elastic.

Answer-D