1.) The competitive firm's demand curve is
a.) unit elastic over the relevant range of output.
b.) perfectly elastic over the relevant range of output
c.) perfectly inelastic over the relevant range of output
d.) elastic above the market price and inelastic below themarket price
.
2.) If you were operating a fast-food restaurant, which of thefollowing would represent a fixed cost of production in the shortrun?
a.) an annual business license fee paid to the localgovernment
b.) wages paid to workers
c.) the cost of electricity to light the restaurant
d.) the cost of paper supplies (napkins, bags, etc.
.
3.) If MR > MC, then
a.) profits will be at their maximum.
b.) the firm is producing too much of the good to be maximizingprofits
c.) the firm can increase its profits or minimize its losses byincreasing output.
d.) the firm is necessarily incurring losses
