[Solved] The Following Graph Depicts the Various Cost Curves for a Representative
Question 17
Multiple Choice
Question 17The following graph depicts the various cost curves for a representative competitive firm producing quantity Q1:
-Refer to the above graph to answer this question.If the price of the product is P1,what does the graph suggest?
A)The firm is operating from the optimal size plant but is not necessarily producing the optimal output.
B)The firm is producing the optimal output but is not necessarily operating from the optimal size plant.
C)The firm is neither operating from the optimal size plant nor necessarily producing the optimal output.
D)The firm is producing the optimal output and is also operating from the optimal size plant.
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- Q12:What is productive efficiency? A)Production of a combination of products that best satisfies consumers' demands. B)The maximization of inputs for a given level of output. C)The production of an output at the lowest possible average cost. D)The minimization of output for a given level of inputs.
- Q13:What is the term for the production of that combination of products which best satisfies consumers' demands? A)Allocative efficiency. B)Productive efficiency. C)Marginal efficiency. D)Optimal efficiency.
- Q14:What is allocative efficiency? A)Production of a combination of products that best satisfies consumers' demands. B)The maximization of inputs for a given level of output. C)The production of an output at the lowest possible cost. D)The minimization of output for a given level of inputs.
- Q15:The following graph depicts the various cost curves for a representative competitive firm producing quantity Q1:
-Refer to the above graph to answer this question.If the price of the product is P1,what does the graph suggest?
A)The market is achieving productive efficiency but not necessarily allocative efficiency.
B)The market is achieving allocative efficiency but not necessarily productive efficiency.
C)The market is achieving neither productive efficiency nor allocative efficiency.
D)The market is achieving both allocative efficiency and productive efficiency.
- Q16:The following graph depicts the various cost curves for a representative competitive firm producing quantity Q1:
-Refer to the above graph to answer this question.If the price of the product is P1,what does the graph suggest?
A)The firm is making economic profits in the short run but not in the long run.
B)The firm is making economic profits in the long run but not in the short run.
C)The firm is making economic profits in both the short run and the long run.
D)The firm is not making economic profits in either the short run or the long run.
- Q18:What is implied if P = MC > AC? A)The market is achieving productive efficiency but is not achieving allocative efficiency. B)The market is achieving allocative efficiency but is not achieving productive efficiency. C)The market is achieving neither productive efficiency nor allocative efficiency. D)The market is achieving both allocative efficiency and productive efficiency.
- Q19:What is implied if an economy achieves allocative efficiency? A)Products are being produced at their lowest cost. B)Everyone is able to obtain everything he or she desires. C)The cost of an additional item would be less than its price. D)The income of the society is being equitably distributed. E)The best combination of goods is being produced.
- Q20:In what way is the market system costless? A)Public goods are not sold but are provided free of charge. B)It does not require the costly presence of bureaucrats to coordinate it. C)External costs are generally very small in the market system. D)Many services,like television programming,are provided free of charge by the market.
- Q21:What does the term market failure mean? A)The inability of markets to ensure that people get what they want. B)The inability of markets to ensure that an efficient or equitable allocation of resources is attained. C)The inability of the government to ensure that productive or allocative efficiency is attained. D)The inability of the government to ensure that people get what they want.
- Q22:Which of the following terms refers to the impossibility of preventing non-buyers from enjoying the benefits of a product? A)Non-consumption. B)Non-excludable. C)Non-rival. D)Externalities.
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