Homework Set 7 一 選擇題 經濟學原理與實習上 ( 作業 )

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1 Homework Set 7 一 選擇題 1. Which of the following is not a characteristic of a competitive market? a. Buyers and sellers are price takers. b. Each firm sells a virtually identical product. c. Free entry is limited. d. Each firm chooses an output level that maximizes profits. 2. When firms are said to be price takers, it implies that if a firm raises its price, a. buyers will go elsewhere. b. buyers will pay the higher price in the short run. c. competitors will also raise their prices. d. firms in the industry will exercise market power. 3. Which of the following statements regarding a competitive market is not correct? a. There are many buyers and many sellers in the market. b. Firms can freely enter or exit the market. c. Price equals average revenue. d. Price exceeds marginal revenue. 4. Which of the following statements is correct? a. For all firms, marginal revenue equals the price of the good. b. Only for competitive firms does average revenue equal the price of the good. c. Marginal revenue can be calculated as total revenue divided by the quantity sold. d. Only for competitive firms does average revenue equal marginal revenue. 5. If ABC Company sells its product in a competitive market, then a. the price of that product depends on the quantity of the product that ABC Company produces and sells since ABC Company s demand curve is downward sloping. b. ABC Company's total revenue must be proportional to its quantity of output. c. ABC Company's total cost must be a multiple of its quantity of output. d. ABC Company's total revenue must be equal to its average revenue. 6. If the market elasticity of demand for potatoes is -0.3 in a perfectly competitive market, then the individual farmer's elasticity of demand a. will also be b. depends on how large a crop the farmer produces. c. will range between -0.3 and d. will be infinite. 1

2 7. For a certain firm, the 100th unit of output that the firm produces has a marginal revenue of $10 and a marginal cost of $11. It follows that the a. production of the 100th unit of output increases the firm's profit by $1. b. production of the 100th unit of output increases the firm's average total cost by $1. c. firm's profit-maximizing level of output is less than 100 units. d. production of the 110th unit of output must increase the firm s profit by less than $1. 8. Christopher is a professional tennis player who gives tennis lessons. The industry is competitive. Christopher hires a business consultant to analyze his financial records. The consultant recommends that Christopher give fewer tennis lessons. The consultant must have concluded that Christopher s a. total revenues exceed his total accounting costs. b. marginal revenue exceeds his total cost. c. marginal revenue exceeds his marginal cost. d. marginal cost exceeds his marginal revenue. 9. A firm in a competitive market has the following cost structure: Output ATC $10 2 $8 3 $7 4 $8 5 $10 If the firm's fixed cost of production is $3, and the market price is $10, how many units should the firm produce to maximize profit? a. 1 unit b. 2 units c. 3 units d. 4 units 10. Consider a firm operating in a competitive market. The firm is producing 40 units of output, has an average total cost of production equal to $5, and is earning $240 economic profit in the short run. What is the current market price? a. $9 b. $10 c. $11 d. $12 2

3 11. A firm that shuts down temporarily has to pay a. its variable costs but not its fixed costs. b. its fixed costs but not its variable costs. c. both its variable costs and its fixed costs. d. neither its variable costs nor its fixed costs. 12. In the long run, a firm will exit a competitive industry if a. total revenue exceeds total cost. b. the price exceeds average total cost. c. average total cost exceeds the price. d. Both a and b are correct. 13. The competitive firm's short-run supply curve is that portion of the a. average variable cost curve that lies above marginal cost. b. average total cost curve that lies above marginal cost. c. marginal cost curve that lies above average variable cost. d. marginal cost curve that lies above average total cost. 14. Joe's Garage operates in a perfectly competitive market. At the point where marginal cost equals marginal revenue, ATC = $20, AVC = $15, and the price per unit is $10. In this situation, a. Joe's Garage is earning a positive economic profit. b. Joe's Garage should shut down immediately. c. Joe's Garage is losing money in the short run but should continue to operate. d. the market price will rise in the short run to increase profits. Figure 14-8 In the figure below, panel (a) depicts the linear marginal cost of a firm in a competitive market, and panel (b) depicts the linear market supply curve for a market with a fixed number of identical firms. Price (a) Firm MC Price (b) Market MC $2.00 $2.00 $1.00 $ Quantity Q1 Q2 Quantity 3

4 15. Refer to Figure If there are 400 identical firms in this market, what is the value of Q2? a. 4,000 b. 8,000 c. 40,000 d. 80, If all existing firms and all potential firms have the same cost curves, there are no inputs in limited quantities, and the market is characterized by free entry and exit, then the long-run market supply curve a. is horizontal and equal to the minimum of long-run marginal cost for each firm. b. must slope downward. c. must slope upward. d. is horizontal and equal to the minimum of long-run average cost for each firm. 17. In the long run the market supply a. must always be horizontal. b. could be upward sloping if the cost of production falls as new firms enter the market. c. could be upward sloping if the cost of production rises as new firms enter the market. d. could be upward sloping if technological improvements lower the cost of producing in the market. 18. In the short- run average costs eventually increase because of, and in the long run average costs eventually increase because of. a. diminishing returns; diseconomies of scale. b. diseconomies of scale; diminishing returns. c. constant returns to scale; decreasing returns to scale. d. increasing returns to scale; diseconomies of scale. 二 問答題 1. 請你畫出短期時經濟利潤為正的完全競爭廠商 MC ATC 與 AVC 相對位置, 並且回答以下問題 : 1) 當短期時, 經濟利潤為正的總收入 (TR) 總成本(TC) 總變動成本(TVC) 總固定成本 (TFC) 邊際成本(MC) 以及利潤 ( ) 為多少?( 請用圖形面積表示 ) 2) 請問短期時完全競爭廠商的供給曲線是哪一段? 廠商所面對的需求曲線又是哪一條? 3) 請問該完全競爭廠商短期時的停業點 (shutdown point) 在哪裡? 該廠商在短期時有沒有可能面臨虧損還繼續生產? 為什麼? 4

5 2. 下圖為長期下個別完全競爭廠商的成本結構圖, 請利用圖形分析下列問題 : 1) 假設產業 (industry) 內的所有廠商具有相同的成本結構, 請在上圖的右邊畫出長期的市場供給曲線 2) 承上題, 假設期初所有廠商皆處於長期均衡, 且廠商所生產的商品為劣等財, 若消費者的所得增加, 將會對市場的長 短期分別造成什麼影響?( 假設該產業是成本固定產業 ) 5