Microeconomic 30 multiple choice questions
(Production and Cost analysis & Perfectly competitive market)
The study guide:
Differentiate economic profit from accounting profit.
Distinguish between long-run and short-run production.
Law of diminishing marginal productivity.
Calculate fixed costs, variable costs, marginal costs, total costs, average fixed costs, average variable costs, and average total costs.
Distinguish the various kinds of cost curves and describe the relationships among them.
Explain why average cost curves are U-shaped.
Distinguish technical efficiency from economic efficiency.
Explain how economies and diseconomies of scale influence the shape of long-run cost curves.
State the envelope relationship between short-run cost curves and long-run cost curves.
Explain the role of the entrepreneur in translating cost of production to supply.
List the six conditions for a perfectly competitive market.
The marginal cost curve is the supply curve for a perfectly competitive firm. Which portion of the MC curve is the supply curve.
Determine the output and profit of a perfect competitor graphically and numerically (using profit maximizing rule.)
Explain why perfectly competitive firms make zero economic profit in the long run.
Explain the adjustment process from short-run equilibrium to long-run equilibrium.