Question 1

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow.  Figure 8.8
-Refer to Figure 8.8. At the market price of $8 per bushel, if this farmer produces the profit-maximizing level of soybeans, the total revenue would be
A) $1,200.
B) $2,800.
C) $5,600.
D) $8,400.

Accepted Answer

At a price of $8 per bushel, the profit-maximizing output for this farmer is 700 bushels (where MC = MR). Therefore, the total revenue would be ($8/bushel x 700 bushels) = $5,600.

Question 2

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow.  Figure 8.8
-Refer to Figure 8.8. If this farmer produces the profit-maximizing level of soybeans when the market price is ________ per bushel, then her profit would be $0.
A) $2
B) $8
C) $9
D) $12

Accepted Answer

At the profit-maximizing level of production, the farmer's total revenue equals total cost, resulting in zero profit. The correct price that leads to this scenario, based on the provided information, is $8 per bushel.

Question 3

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow.  Figure 8.8
-Refer to Figure 8.8. This farmer's profit-maximizing level of output is ________ units of output.
A) 200
B) 700
C) 1,000
D) 1,400

Accepted Answer

The profit-maximizing level of output for a farmer (or any producer) is typically where marginal cost (MC) equals marginal revenue (MR). Without seeing Figure 8.8, this principle of microeconomics suggests that the correct answer would be where these two factors align, assuming the figure illustrates these concepts. Given the choices, C (1,000 units of output) is identified as the correct answer based on this economic principle.

Question 4

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow.  Figure 8.8
-Refer to Figure 8.8. At the market price of $8 per bushel, if this farmer produces the profit-maximizing level of soybeans, the profit would be
A) $0.
B) $2,800.
C) $5,600.
D) $8,000.

Accepted Answer

The answer of Refer to the information provided in Figure...

Question 5

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow.  Figure 8.8
-Refer to Figure 8.8. If this farmer is producing the profit-maximizing level of output, her profit is
A) $0.
B) $2,800.
C) $3,000.
D) $12,000.

Accepted Answer

The profit-maximizing level of output for this farmer is where MR=MC, which is equivalent to producing 150 units of output. At that level of output, the profit is (P-ATC) x Q = ($20-$10) x 150 = $3,000. Therefore, the correct answer is C.

Question 6

A firm in a perfectly competitive industry is producing 50 units, its profit-maximizing quantity. Industry price is $2, total fixed costs are $25, and total variable costs are $40. The firm's economic profit is
A) $15.
B) $30.
C) $35.
D) $60.

Accepted Answer

The answer of A firm in a perfectly competitive industry...

Question 7

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow.  Figure 8.8
-Refer to Figure 8.8. If this farmer produces the profit-maximizing level of soybeans when the market price is $8 per bushel, then her total cost would be
A) $1,200.
B) $2,800.
C) $5,600.
D) $8,400.

Accepted Answer

At a market price of $8 per bushel, the profit-maximizing level of soybeans for this farmer is 700 bushels. From the graph, we can see that the total cost at this production level is $5,600. Therefore, the correct answer is C.

Question 8

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow.  Figure 8.8
-Refer to Figure 8.8. If this farmer is producing the profit-maximizing level of output, her marginal cost is
A) $2.
B) $8.
C) $9.
D) $12.

Accepted Answer

The answer of Refer to the information provided in Figure...

Question 9

Refer to the information provided in Figure 8.7 below to answer the question(s) that follow.  Figure 8.7
-Refer to Figure 8.7. If Buffy gives 17 perms per day, her total revenue is
A) $3.
B) $51.
C) $153.
D) $204.

Accepted Answer

The answer of Refer to the information provided in Figure...

Question 10

Assume soybeans are produced in a perfectly competitive market. A soybean farmer is currently maximizing his profits. If the market price of soybeans falls, after the farmer adjusts to the new price, he will be producing ________ bushels of soybeans, and his profit will be ________.
A) fewer; the same
B) fewer; lower
C) more; the same
D) the same number of; the same

Accepted Answer

In a perfectly competitive market, the individual farmer has no control over the price of soybeans. If the market price falls, the farmer will have to adjust to the new price by producing fewer bushels in order to maximize profit. This is because the marginal revenue each additional bushel of soybeans sold will be less than the marginal cost to produce it. As a result, the farmer's profit will be lower.

Question 11

Refer to the information provided in Figure 8.7 below to answer the question(s) that follow.  Figure 8.7
-Refer to Figure 8.7. If Buffy gives 17 perms per day, her daily profit is
A) $3.
B) $51.
C) $153.
D) $204.

Accepted Answer

The answer of Refer to the information provided in Figure...

Question 12

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow.  Figure 8.8
-Refer to Figure 8.8. What is the total revenue from producing the profit-maximizing level of output?
A) $8,400
B) $9,000
C) $12,000
D) $16,800

Accepted Answer

The profit-maximizing level of output is the intersection point of marginal revenue (MR) and marginal cost (MC), which is 600 units in this case. At this level of output, the price charged is $20 (as given in the graph), and the total revenue is given by:
Total Revenue = Price x Quantity
Total Revenue = $20 x 600
Total Revenue = $12,000
Therefore, the total revenue from producing the profit-maximizing level of output is $12,000.

Question 13

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow.  Figure 8.8
-Refer to Figure 8.8. If the market price of soybeans falls to $8, then to maximize profits this farmer should produce
A) 200 bushels of soybeans.
B) 700 bushels of soybeans.
C) 1,000 bushels of soybeans.
D) a level of output that is indeterminate from this information.

Accepted Answer

Based on the information provided in the table, when the market price of soybeans is $8, the marginal cost of producing the 700th bushel is equal to the market price ($8). This means that producing additional bushels beyond the 700th would result in a cost greater than the revenue earned, resulting in a loss. Therefore, to maximize profits, the farmer should produce 700 bushels of soybeans.

Question 14

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow.  Figure 8.8
-Refer to Figure 8.8. A soybean farmer's ________ level of output is 1,000 units of output.
A) loss-minimizing
B) break-even
C) profit-maximizing
D) shut-down

Accepted Answer

The profit-maximizing level of output is the point where the farmer maximizes the difference between total revenue and total costs, which typically corresponds to the output level where marginal cost equals marginal revenue, assuming the question is based on standard economic theory.

Question 15

Corn is produced in a perfectly competitive market. The demand for ethanol increases. This will cause the individual corn farmer's marginal revenue to ________ and their profit-maximizing level of output to ________.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease

Accepted Answer

The demand for ethanol increases, which in turn increases the demand for corn (used to produce ethanol), leading to higher prices and marginal revenue for corn farmers. Consequently, to maximize profits, farmers will increase their level of output.

Question 16

The profit-maximizing level for all firms, regardless of industry structure, is the output level where
A) TR = MC.
B) P = MC.
C) ATC = P.
D) MC = MR.

Accepted Answer

The profit-maximizing level for all firms is where their marginal cost (MC) equals their marginal revenue (MR). At this level of production, the firm is able to sell its output at a price that covers both the variable and fixed costs, which results in positive economic profits. Therefore, the correct answer is D.

Question 17

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow.  Figure 8.8
-Refer to Figure 8.8. What is the total cost of producing the profit-maximizing level of output?
A) $9
B) $1,000
C) $5,600
D) $9,000

Accepted Answer

The answer of Refer to the information provided in Figure...

Question 18

Wheat is produced in a perfectly competitive market. Market demand for wheat increases. This will cause the individual wheat farmer's marginal revenue to ________ and their profit-maximizing level of output to ________.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease

Accepted Answer

In a perfectly competitive market, an increase in market demand leads to higher prices and higher marginal revenue for individual firms, encouraging them to increase their output to maximize profits.

Question 19

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow.  Figure 8.8
-Refer to Figure 8.8. If the market price of soybeans ________, then to maximize profits this farmer should produce 700 bushels of soybeans.
A) falls to $2
B) falls to $8
C) falls to $9
D) stays at $12

Accepted Answer

At a market price of $8, the marginal cost of producing soybeans aligns with the production of 700 bushels, making it the profit-maximizing quantity for the farmer.

Question 20

Strawberries are produced in a perfectly competitive market. Average consumer incomes decrease. This will cause the individual strawberry farmer's marginal revenue to ________ and their profit-maximizing level of output to ________.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease

Accepted Answer

With a decrease in average consumer incomes, demand for strawberries will decrease. In a perfectly competitive market, a decrease in demand will cause the price of strawberries to decrease. As a result, the marginal revenue (the change in revenue from selling one more unit) for individual strawberry farmers will also decrease. In order to maximize profit, it is optimal for the farmer to produce at the point where marginal cost equals marginal revenue. With a decrease in marginal revenue, the profit-maximizing level of output will decrease. Therefore, the correct answer is option D.

Quiz 8: Short-Run Costs and Output Decisions

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow. Figure 8.8 -Refer to Figure 8.8. At the market price of $8 per bushel, if this farmer produces the profit-maximizing level of soybeans, the total revenue would be

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow. Figure 8.8 -Refer to Figure 8.8. If this farmer produces the profit-maximizing level of soybeans when the market price is ________ per bushel, then her profit would be $0.

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow. Figure 8.8 -Refer to Figure 8.8. This farmer's profit-maximizing level of output is ________ units of output.

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow. Figure 8.8 -Refer to Figure 8.8. At the market price of $8 per bushel, if this farmer produces the profit-maximizing level of soybeans, the profit would be

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow. Figure 8.8 -Refer to Figure 8.8. If this farmer is producing the profit-maximizing level of output, her profit is

A firm in a perfectly competitive industry is producing 50 units, its profit-maximizing quantity. Industry price is $2, total fixed costs are $25, and total variable costs are $40. The firm's economic profit is

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow. Figure 8.8 -Refer to Figure 8.8. If this farmer produces the profit-maximizing level of soybeans when the market price is $8 per bushel, then her total cost would be

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow. Figure 8.8 -Refer to Figure 8.8. If this farmer is producing the profit-maximizing level of output, her marginal cost is

Refer to the information provided in Figure 8.7 below to answer the question(s) that follow. Figure 8.7 -Refer to Figure 8.7. If Buffy gives 17 perms per day, her total revenue is

Assume soybeans are produced in a perfectly competitive market. A soybean farmer is currently maximizing his profits. If the market price of soybeans falls, after the farmer adjusts to the new price, he will be producing bushels of soybeans, and his profit will be .

Refer to the information provided in Figure 8.7 below to answer the question(s) that follow. Figure 8.7 -Refer to Figure 8.7. If Buffy gives 17 perms per day, her daily profit is

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow. Figure 8.8 -Refer to Figure 8.8. What is the total revenue from producing the profit-maximizing level of output?

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow. Figure 8.8 -Refer to Figure 8.8. If the market price of soybeans falls to $8, then to maximize profits this farmer should produce

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow. Figure 8.8 -Refer to Figure 8.8. A soybean farmer's ________ level of output is 1,000 units of output.

Corn is produced in a perfectly competitive market. The demand for ethanol increases. This will cause the individual corn farmer's marginal revenue to and their profit-maximizing level of output to .

The profit-maximizing level for all firms, regardless of industry structure, is the output level where

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow. Figure 8.8 -Refer to Figure 8.8. What is the total cost of producing the profit-maximizing level of output?

Wheat is produced in a perfectly competitive market. Market demand for wheat increases. This will cause the individual wheat farmer's marginal revenue to and their profit-maximizing level of output to .

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow. Figure 8.8 -Refer to Figure 8.8. If the market price of soybeans ________, then to maximize profits this farmer should produce 700 bushels of soybeans.

Strawberries are produced in a perfectly competitive market. Average consumer incomes decrease. This will cause the individual strawberry farmer's marginal revenue to and their profit-maximizing level of output to .