_____________________ 0 100 1 50 2 95 3 46.67 4 300 5 270_____________________________________________________________________Figure 8.5Cost Schedule for Sherry's Sweaters5.Refer to Figure 8.5. If Sherry produces zero sweaters, her total fixed costs area.$0.b.$50.c.$100.d. indeterminate from this information.6.Refer to Figure 8.5. If Sherry produces two sweaters, the marginal cost of the second sweater isa.$40.b.$45.c.$72.50.d.$122.50.e.indeterminate from this information.7.If you know that average variable cost is falling, then you can deduce thata.marginal cost is below average variable cost.b.marginal cost is below average fixed cost.c.marginal cost is rising.d. marginal cost is falling.e. none of the above.8.Which of the following is true in the long run for a perfectly competitive firm that is successfully maximizing its profit:a. Economic profit is positive.b. Price equals average fixed cost.c. Price equals minimum average cost.d. None of the above. 9.Refer to Figure 9.7. After Luxury Luggage produces 1,000 suitcases, this graph revealsa.economies of scale.b.diminishing marginal returns.c.diseconomies of scale.d. constant returns to scale.e. external diseconomies10.Resources are efficiently allocated to the production of goods and services for consumers when pricea. equals marginal cost.b. equals marginal revenue.c. is greater than marginal revenued. equals the lowest point on the average variable cost curve.e. none of the above, since efficiency is a long run, not a short run, concept.Answers: 1:C 2:E 3:C 4:D 5:C 6:A 7:A 8:C 9:C 10:AShort Answer1. (5 points) Illustrate the case of a typical firm in perfect competition making an economic profit in the short run. Show all the relevant cost and revenue curves as well as the amount of profit and the price and quantity choices of the firm. Show the effi...
