18.Assuming that at quantity Q, the average total cost is minimized. When the firmmarginally increases production at Q,
(A) Marginal cost will decrease
(B) Average variable cost will increase.
(C) Average total cost will decrease.
(D) Average fixed cost will increase.

19.The table below shows a firm’s output and the corresponding long-run cost. According to the table,(A) Only economies of scale exist.(B) Only diseconomies of scale exist.(C) Economies of scale exist first, then diseconomies of scale.(D) Diseconomies of scale exist first, then economies of scale.

20.For a perfectly competitive firm, other things being equal,(A) Its total cost does not change with output.(B) Its fixed cost does not change with output.(C) Its marginal revenue does not change with output.(D) Both ( B ) and ( C ) are correct.

21.Under which of the following circumstances will a perfectly competitive firmchoose to temporarily shut down:(A) Total revenue is less than total cost.(B) Total revenue is less than total variable cost.(C) Market price is less than average variable cost.(D) Both ( B ) and ( C ) are correct.

22.Assuming labor is the only variable factor of production. For a profit-maximizingperfectly competitive firm, when market demand decreases, its labor employmentwill ____ and the marginal product of the last unit of labor employed will ____.(A) Increase, increase (B) Increase, decrease(C) Decrease, increase (D) Decrease, decrease

23.In the long run, the condition for a firm to exit the market is(A) Price is less than average variable cost.(B) Price is less than average total cost.(C) Economic profit is zero.(D) Both ( B ) and ( C ) are correct.

24.Assuming no externalities. When a perfectly competitive market reachesequilibrium,(A) Marginal social benefit equals marginal social cost.(B) Marginal social benefit is greater than marginal social cost.(C) Marginal social benefit is less than marginal social cost.(D) All of the above are possible.

25.The profit-maximizing output for a perfectly competitive firm is(A) The quantity at the intersection of the rising marginal revenue line and thefalling marginal cost curve.(B) The quantity at the intersection of the horizontal marginal revenue line andthe falling marginal cost curve.(C) The quantity at the intersection of the horizontal marginal revenue line andthe rising marginal cost curve.(D) None of the above.

26.In 2022, Mark Hong purchased a 2020 Honda Civic from his neighbor for his son,purchased a 2019 "one owner" Camry from Larchmont Toyota for his wife, bought a 2022new Ford for himself, and sold his 2016 Dodge Caravan to his teenage nephew. Which,if any, of these transactions will be included in GDP in 2022?(A) all four transactions(B) all three purchases but not the sale(C) the purchase of the Ford and the Caravan(D) only the purchase of the Ford

27.Suppose Firm A buys a new copier for its store for $1000. A year later, when thisfirm wants to upgrade to a new copier, it finds that the old copier is only worth$750. Over the year the copier was used, ________ has occurred.(A) replacement investment (B) gross investment(C) depreciation (D) net investment

28.According to the Department of Statistics in country A, in the second quarter of2019 personal consumption expenditures grew by 1.7 percent, gross private domesticinvestment grew by 3.0 percent, government expenditure on goods and servicesdecreased by -0.9 percent, imports grew by 2.9%, and exports grew by 6.0%. Giventhese data, it is most likely that(A) GDP growth was positive in the 2nd quarter.(B) GDP growth was negative in the 2nd quarter.(C) the economy hit a business cycle peak.(D) the economy hit a business cycle trough.

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