Economics MCQS with Answers 1st Year Chapter 14

A firm earns economic profit when total profit exceeds

explicit costs

normal profit

variable costs

implicit costs

Normal profit is attained where:

TR >TC

TR = TC

AR > MR

AR < MR

If Bali burgers find that their MC of burgers is less than MR they would try to

reduce business

close business

continue as before

expand business

Profit = ?

TR – MC

TR + TC

TC – MC

TR – TC

Normal profit is

part of fixed cost

part of economic profit

total revenue minus total cost

part of total cost

In the long run under perfect competition a firm produces at a point where

none is minimum

LAC is minimum

SAC is minimum

both LAC and SAC are minimum

A firm attains sub-normal profit under perfect competition when its:

AR < P

AC = P

AR = P (Price)

AC < P

There are large number of seller and buyers in the market but none is able to influence market price. such a market is called

regular

open

free

competitive

At the point of equilibrium of firm under perfect competition

MC curve must be falling

MC curve must be rising

MR curve must be falling

MR curve must be rising

Profit is maximum when

distance between MR and MC is maximum

distance between MR and AR is maximum

distance between TR and TC is maximum

distance between AR and AC is maximum