AnswersTX-Economics Chamberlain P4 T1Elasticity and Incentives

Market Structures and Competition Answers

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1
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To generate higher profits, producers must work to

A
increase their total supply.
B
increase their total expenses.
C
decrease their customer base.
D
decrease their production costs.
2
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Producers must understand the marginal benefit of making an additional unit, which shows the

A
actual gain.
B
eventual gain.
C
possible gain.
D
unlikely gain.
3

What is the best definition of marginal benefit?

A
the possible income from producing an additional item
B
the price of producing one additional unit of a good
C
the additional income gained from selling an additional good
D
the financial gain from business activity minus expenses
4

In order to calculate marginal cost, producers must compare the difference in the cost of producing one unit to the cost of

A
purchasing a unit.
B
distributing that unit.
C
producing the next unit.
D
producing a different unit.
5

Profit equals the total amount of money made minus

A
expenses.
B
prices.
C
revenue.
D
supply.
6

What is the difference between marginal cost and marginal revenue?

A
Marginal cost is the money earned from selling one more unit of a good. Marginal revenue is the money paid for producing one more unit of a good.
B
Marginal cost is the money paid for producing one more unit of a good. Marginal revenue is the money earned from selling one more unit of a good.
C
Marginal cost is the money a producer might make from one more unit. Marginal revenue is the money a producer actually makes from one more unit.
D
Marginal cost is the money a producer actually makes from one more unit. Marginal revenue is the money a producer might make from one more unit.
7

What is the best definition of marginal cost?

A
the possible income from producing an additional item
B
the price of producing one additional unit of a good
C
the additional income gained from selling an additional good
D
the financial gain from business activity minus expenses
8

Brenda’s Boards manufactures skateboards. Each skateboard sells for $45 and includes the following expenses: $3 for the wheels and mounts, $1 for the plastic board, $1 for the paint, and $10 for the labor. What is the total revenue the company makes after selling 10 boards?

A
$300
B
$350
C
$400
D
$450
9

total revenuemarginal revenuemarginal costtotal units produced

A
total revenue
B
marginal revenue
C
marginal cost
D
total units produced
10

debtsprofitsexpensescosts

A
debts
B
profits
C
expenses
D
costs

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