A price-taking firm makes air conditioners.The market price of one of their new air conditioners is $140. The firm's total cost information is given in the table below: How many air conditioners should the firm produce per day if its goal is to maximize its profit? conditioners per day An individual's supply curve shows his or her: profit from producing at each quantity. willingness to pay at each quantity. hourly wage for producing at each quantity. opportunity cost of producing at each quantity. As the market price of a service increases, more people will decide to perform that service because: service jobs are in higher demand than manufacturing jobs. more people will find that the market price exceeds their reservation price. higher prices always result in higher revenue. higher-priced services are more prestigious. Which of the following is most likely to be a variable factor of production at a university? The location of the university. The school mascot. the long Which of the following factors of production is likely to be fixed in the short run? The location of the firm. A variable factor of production: is variable only in the short run. . The number of employee-hours. The amount of paper used. When some factors of production are fixed. constant quantities of the variable factor. is fixed in the long run but variable in the short run. in order to increase production by equal amounts. is variable in both the short run and the long run. the long variable. The location of a firm will be a _________ factor of production in ________ run. the short fixed. plays no role in the law of diminishing marginal returns. The number of teaching assistants. a firm would need to add successively: larger and larger quantities of the fixed factors. both the short and long fixed. larger and larger quantities of the variable factor. smaller and smaller quantities of the variable factor. The amount of electricity consumed. variable. The size of the basketball arena or football stadium. reduce output and earn smaller profits or larger losses. but it is going to earn a loss. earn profits. total costs fall. price equals marginal cost. the profit maximizing level of output rises. cut wages and payments to factors of production. Expectations about future demand improve. marginal costs rise. produce less. expand output and earn smaller profits. The price of the good falls. Demand for the good falls. total costs are minimized. the costs of the variable factors of production are minimized. Assuming the perfectly competitive firm is experiencing diminishing marginal returns to its variable factors of production. It should pick the output level where: total revenues are maximized. if the price of a variable factor of production increases: price rises. In general. . Suppose a perfectly competitive firm knows that it is not going to shut down.A decrease in the price the firm receives for its output will cause the firm to: leave output unchanged and earn smaller profits. earn losses. Which of the following would cause supply to shift to the left? Wages rise. as output price rises. the firm will: produce more. flexible . more inelastic more unpredictable unitary elastic more elastic Mike knows how to make hamburgers (like many other people).14. elastic. the supply curve for hamburgers is __________ because the inputs to production are _________. supply of pizza is ________ compared to supply at a pizza restaurant that does not serve calzones. declining as quantity increases. For Antony. Refer to the supply function above. immobile inelastic. Antony produces more calzones. When the price of pizza is low. sauce. flexible inelastic. mobile inelastic. and got a minimum wage job at Burger King. increasing as quantity increases. with respect to price. equal to one over the entire supply curve. With respect to price elasticity of supply. Antony's Pizza uses the same dough. The elasticity of supply along this curve is: greater than one over the entire supply curve. and cheese for pizza and calzones. Refer to the figure above. horizontal at the market price. upward sloping. total consumer surplus received by the buyers is: $100 $625 $125 $200 A price-taker confronts a demand curve that is: vertical at the market price. .17. When the market is in equilibrium. whether to change the price of their product. downward sloping. The most important decision that sellers make is: whether to expand factory facilities. A rational seller will sell another unit if: the price that could be charged is greater than the equilibrium price. a period in which at least one factor of production is fixed. profit. Total revenue minus total explicit and implicit costs defines: marginal earnings. gross earnings. whether to set profit maximization as a goal. the period of time between quarterly accounting reports. one year or less. leave its output decision unchanged. then the firm should: expand output to earn greater profits or smaller losses. factors of production short run output variable cost only inputs in the long run If a perfectly competitive firm produces an output level where price is less than marginal costs. The short run is defined as: a period in which all factors of production are variable.whether to produce another unit. Marginal cost is calculated as: the percentage change in total costs divided by the percentage change in output. the bus and the driver are the ___________ for bus service. the quantity demanded of the seller's output is greater than zero. the cost of making the next unit is less than the revenue gained by selling the next unit. reduce output to earn greater profits or smaller losses. . It takes a bus and a driver to produce bus service for the students in a college town. net worth. Therefore. the profit earned from the sale of the next unit is greater than the profit earned on the sale of the last unit. raise its price. price minus average total cost. (price minus average total cost) times the quantity sold. the change in total costs divided by the change in output. Which firm is most likely to meet the condition for perfect competition that resources are mobile? A farm A sidewalk pretzel vendor A movie theater A department store . the change in output divided by the change in total costs. marginal benefit minus marginal cost.total revenue minus total costs. A firm's total profit equals: price times quantity sold.