Q11. A competitive firm will tend to expand its output as long as marginal:
   

A)   revenue is greater than the average cost.

B)   revenue is greater than marginal cost.

C)   cost is less than average cost.

Q12. In the short run, if price is below average total cost (ATC) the firm will:

A)     raise prices.

B)     keep running as long as it is covering its variable costs.

C)     produce more.

Q13. In the long run, if price is below average total cost (ATC) the firm will:

A)   keep running.

B)   shut down.

C)   cover its variable costs.

Q14. In the long run, a perfectly competitive firm will earn:

A)   small economic profits.

B)   zero economic profits.

C)   large economic profits.

Q15. Under perfect competition, a firm will be inclined to increase output as long as which of the following conditions exists?

A)   Marginal revenue is greater than the average cost.

B)   Marginal cost is less than average cost.

C)   Marginal revenue is greater than marginal cost.

[此贴子已经被作者于2009-1-6 13:48:56编辑过]

答案和详解如下：

Q11. A competitive firm will tend to expand its output as long as marginal:

A)   revenue is greater than the average cost.

B)   revenue is greater than marginal cost.

C)   cost is less than average cost.

Correct answer is B)

All firms will continue to expand production until marginal revenue = marginal cost.

Q12. In the short run, if price is below average total cost (ATC) the firm will:

A)     raise prices.

B)     keep running as long as it is covering its variable costs.

C)     produce more.

Correct answer is B)

In the short run, if the firm is covering its average variable costs and some of its fixed costs it will continue to operate as long as the situation is temporary.

Q13. In the long run, if price is below average total cost (ATC) the firm will:

A)   keep running.

B)   shut down.

C)   cover its variable costs.

Correct answer is B)

If the price is below ATC then the firm is losing money. If the firm believes the price will never exceed ATC the only way to eliminate fixed costs is to go out of business.

Q14. In the long run, a perfectly competitive firm will earn:

A)   small economic profits.

B)   zero economic profits.

C)   large economic profits.

Correct answer is B)

Zero economic profits means the firm is earning a normal rate of return and a positive accounting profit. Since perfectly competitive firms have no barriers to entry, economic profits cannot be positive in the long run because new competitors will enter the market place driving down economic profits to zero.

Q15. Under perfect competition, a firm will be inclined to increase output as long as which of the following conditions exists?

A)   Marginal revenue is greater than the average cost.

B)   Marginal cost is less than average cost.

C)   Marginal revenue is greater than marginal cost.

Correct answer is C)

A firm will continue to expand output as long as it is possible to earn an economic profit. In other words, a firm will expand output as long as marginal revenue is greater than marginal cost.

production

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