Economics Micro & Macro (CliffsAP)

Part IV: AP Macroeconomics & Microeconomics Tests

39. Question 39 refers to the following graph.

The graph above shows the cost of production curves for a monopoly. What is the monopoly’s total profit when it

produces 100 units?

A. $1,500

B. $500

C. $1,000

D. $2,000

E. $3,000

Average

Total Cost

Marginal Cost

Marginal Demand

Revenue

100 150 Quantity

$20

$15

$10

$5

Price/Costs

37. What will happen to the supply and demand
    curves in the short run if the cost of production
    falls?

Demand Curve Supply Curve

A. Shifts to the right Stays the same

B. Shifts to the right Shifts to the right

C. Shifts to the left Stays the same

D. Stays the same Shifts to the right

E. Stays the same Stays the same

38. A firm in a perfectly competitive market has a
    marginal revenue of $30 per unit. Which of the
    following is true if the firm can produce 574 units
    for a total cost of $1,752 or 575 units for $1,782?
    A. To sell 575 units they need to lower their
    price.
    B. To sell 575 units they need to raise their
    price.
    C. The firm should produce 574 units.
    D. The firm should produce 575 units.
    E. Unit number 575 is not worth it.