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# ECON-102-Firms-I

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## Jose Vazquez

on 1 September 2016

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#### Transcript of ECON-102-Firms-I

ECON 102 The Perfectly Competitive Firm-I Dr. Jose J. Vazquez How much output to produce ? MR = MC Perfect Competition P = MC What to Do in the Short-run? Shutdown Don't Shutdown What to Do in the Long-Run? Enter or Expand Equlibrium Exit When you tell your girlfriend (boyfriend) that you are loosing money on your tutoring services, she (he) recomend that what you should do is increase the price. Is she giving you good advice?

A) YES
B) NO
C) MAYBE Say you earn some extra money by offering tutoring services for ECON 102. Currently you are spending 5 hours a week in your tutoring business, and you are charging \$12/hr. Should you increase the number of hours a week you dedicate to your tutoring bussiness?

A) YES
B) NO

1) Salary you could make bartending = \$10/hr
2) Internet connection = \$50/month

If you charge \$12/hr for your services, then you make ________ of profits with the first hour of tutoring.

A) \$2
B) \$-48
C) \$2
D) \$-38
E) \$0 You have the following operating costs:

1) Salary you could make bartending = \$10/hr
2) Internet connection = \$50/month

If right now you are only working 1 hour each week, and you are charging \$12 per hour, then in order to increase profits you should ________ the number of hours you work each week.

A) increase
B) decrease
C) not change After operating for 2 months, you continue to have losses every week. Now your girlfriend gives you another advise: get out of tutoring bussiness and go bartending instead! What do you think of her advice now? (Continue to assume you have a 1-year contract with the Internet service, bartending pays you \$10/hr, and you can only work 5 hrs each week).

1) Salary you could make bartending = \$10/hr
2) Internet connection = \$50/month

Currently you are spending 5 hours a week in your tutoring business (that is the most you can work every week). If you work in a perfectly competitive market, and if everyone else has the same costs you have, then in the long-run the price of tutoring will be ________ \$12/hr.

A) more than
B) less than
C) exactly Monopoly Shutdown or not P > AVC P < AVC Enter, Exit or Stay P > ATC P = ATC P < ATC Say you are considering whether to go out on a BLIND date tonight with a friend of a friend. Assuming you are an average looking person, living in a place where competition for dates is fierce, which of the following would weight more on your decision to go out on your date or canceling (assume more dates always give you more happiness):

A) how “hot” you think your date is

B) how much time you have spent working out your abs this month

C) how much money you have spent buying nice cloth this month

D) how much you have left to study for the exam tomorrow Do you think the market for dates around here is pretty competitive?

A) YES
B) NO Survival of the Fittest
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