The Figure Given Below Shows Three Short Run Average Total

question 13

Multiple Choice

The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm.Figure 8.3

-Assume that a firm's marginal revenue curve intersects the rising portion of the marginal cost curve at 100 units of output. At this output level, a profit-maximizing firm's total cost is $1,000. If the price of the product is $3 per unit and the firm produces at the profit-maximizing level, the firm will earn an economic profit equal to:

• A)-$1,000.
• B)-$700.
• C)-$400.
• D)-$600.
• E)$200.

---

Definitions:

Transfer Payments

Payments made by the government to individuals without any expectation of goods or services in return, such as welfare or social security.

Redistribution Programs

Government policies designed to redistribute income and wealth from wealthier segments of society to poorer ones, often through taxation, welfare, and public services.

Human Capital

The economic value of a worker's experience and skills, including education, training, intelligence, and health, influencing productivity and earning potential.

Economic Income

Comprises the total earnings from work, investments, and other sources, after considering inflation and changes in purchasing power over time.