Month: November 2018

The figure below depicts the marginal revenue and costs of a perfectly competitive firm. The firm’s profit is maximised when the firm produces ……… ?

Select ONE answer:

1. 170 units of output.
2. 130 units of output.
3. 90 units of output.
4. 210 units of output.

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 1

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John’s Lawn Care Services is a perfectly competitive firm that currently mows 20 lawns a week. John’s short-run marginal cost is higher than the price he charges and increasing. John will increase his profit if he …… ?

Select ONE answer:

1. charges a lower price.
2. moves more than 20 lawns a week.
3. moves fewer than 20 lawns a week.
4. charges a higher price.

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 3

This work is licensed under a Creative Commons Attribution 4.0 International License.

If marginal revenue exceeds marginal cost, to increase its profit the firm will …….. ?

Select ONE answer:

1. increase its output.
2. keep its output the same.
3. shut down.
4. decrease its output.

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 1

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which of the following statement is NOT a short-run decision?

Select ONE answer:

1. whether to enter or exit an industry.
2. what quantity to produce.
3. whether to produce or shut down.
4. Both answers A and C are correct.

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 1

This work is licensed under a Creative Commons Attribution 4.0 International License.

Marginal revenue is defined as …..……. ?

Select ONE answer:

1. total revenue divided by the total quantity sold.
2. the change in total revenue that results from a one-unit increase in the quantity sold.
3. the value of a firm’s sales.
4. the total revenue from the total amount the firm sells.

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 2

This work is licensed under a Creative Commons Attribution 4.0 International License.

For a perfectly competitive firm, the price is the same as …..……. ?

Select ONE answer:

1. total revenue.
2. average variable cost.
3. marginal revenue.
4. both answers A and B are correct.

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 3

This work is licensed under a Creative Commons Attribution 4.0 International License.

The firm’s goal is to …..……. ?

Select ONE answer:

1. maximize its normal profit.
2. maximize its economic profit.
3. maximize its industry’s revenue.
4. maximize its total revenue.

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 2

This work is licensed under a Creative Commons Attribution 4.0 International License.