Figure 14-4 Suppose a Firm Operating in a Competitive Market Has the Has

question 561

Multiple Choice

Figure 14-4
Suppose a firm operating in a competitive market has the following cost curves:
-Refer to Figure 14-4. When price rises from P3 to P4, the firm finds that

• A)fixed costs decrease as output increases from Q3 to Q4.
• B)it can earn a positive profit by increasing production to Q4.
• C)profit is still maximized at a production level of Q3.
• D)average revenue exceeds marginal revenue at a production level of Q4.

Recognize the role of opportunity costs in determining specialization and trade patterns.

Identify the conditions under which nations gain from trade and how terms of trade affect these gains.

Understand the impact of tariffs, quotas, and free trade on international trade efficiency.

Analyze the significance of export supply and import demand curves in trade.

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Definitions:

Extinction

In behavioral psychology, the process by which a previously reinforced behavior is weakened by no longer being reinforced, leading to a decrease in the occurrence of the behavior.

Generalization

The process by which individuals apply learned behaviors and responses to similar but new situations.

Spread Of Effect

The diffusion of emotional responses or behaviors from one context to another; in learning, it refers to the generalization of behaviors to similar stimuli.

Generalization

The ability to apply learned skills or responses to new situations or stimuli that are similar to the original conditions.