microeconomic homewoek

1. A firm is experiencing a loss of $5,000 per year when operating. The firm has fixed costs of $8,000 per year. The firm should _________ in the short run and should _________ in the long run.

Select one:

a. operate; shut down

b. shut down; operate

c. operate; operate

d. shut down; shut down

2. A local snow cone business sells snow cones in one size for $5. It has the following cost and output structure per hour. 

To maximize profit, the firm should produce how many snow cones per hour?

Select one:

a. 25

b. 30

c. 35

d. 40

3. A producer would decide to produce in a competitive market in which she will earn zero profit in the long run because

Select one:

a. in the short run her profit is positive.

b. the zero profit in the long run is, in fact, zero accounting profit, and only matters on the books.

c. the producer has a high cost of exiting this market, and counting that cost, it's better for her to continue operating at zero profit.

d. at zero profit, her revenue will cover all her costs, both explicit and implicit (opportunity cost).

4. Use the graph to answer the questions below. At what price is the firm breaking even?

Select one:

a. P5

b. P4

c. P1

5. Use the graph to answer the questions below. At what price is the firm experiencing an economics loss?

Select one:

a. P5

b. P4

c. P1

6. Use the graph to answer the questions below. At what price is the firm making an economic profit?

Select one:

a. P2

b. P4

c. P6

7.

What is the profit-maximizing output?

Select one:

a. 15

b. 20

c. 25

d. 30

8. Which of the following can be considered a competitive market?

Select one:

a. international market for coffee beans

b. market for U.S. treasury bonds

c. market for fast food

d. market for cars

10. What is the capacity of Pittsburgh’s new stadium? ________ 

Select one:

a. 48,000

b. 38,000

c. 44,000

d. 42,000