ECO 561 Week 2 Knowledge Check (Quiz)

For more classes visit www.snaptutorial.com Purely competitve firms increase total revenue by 2. What are two ways for a competitve firm to determine the optimal level of production, that is, the level of production that will maximize profit or minimize losses? 3. Suppose that a firm determines that its marginal revenue is greater than its marginal cost, it would be better to 4. It is profitable for a firm to continue employing additional resources as long as 5. As additional units are produced, the marginal revenue product falls for all firms because marginal product decreases. For firms operating in industries that are not perfectly competitve, marginal revenue product also falls because 6. All things being equal, an increase in demand for a product, 7. Marginal cost can be defind as the additon to---------------------of one more unit of output. 8. If a firm stars small and, over time, builds successively larger plant sizes or adds additonal work space in an office, average total costs are most likely to 9. Demand for resources, including labor, depend on its 10. The primary difference between increasing-and decreasing-cost industries lies in 11. When adding labor or other factors of production, buisnesses may see their total product rise, but see their per-unit increase in return for each additional unit diminish. This phenomenon 12. In the short run, firms should shut down if 13. When you are considering the value of a resource in its next best use, you are considering its 14. Of the four major market structures-perfectly competitive, monopolistic competition, oligopoly, monopoly-reducing variable costs of production