Suppose Al, Betty, and Carl own the only fishing companies in your village

  Suppose Al, Betty, and Carl own the only fishing companies in your village. Suppose the
                            market price today is $10 per fish. Suppose Al catches 4,000 fish with an average total
                            cost of $7.50, Betty catches 6,000 fish with an average total cost of $6, and Carl catches
                            10,000 fish with an average total cost of $7. How much would Betty’s average total cost
                            have to fall in order for her to make as much total profit as Carl?

a. $1

b. $2

c. $4

d. $5

e. Betty cannot make as much profit as Carl with only 6,000 fish.

132.              Suppose Al, Betty, and Carl own the only fishing companies in your village. Suppose the
                            market price today is $10 per fish. Suppose Al catches 4,000 fish with an average total
                            cost of $7.50, Betty catches 6,000 fish with an average total cost of $6, and Carl catches
                            10,000 fish with an average total cost of $5. What is the average profit per fish in the
                            village today?

a. $2.40

b. $4.20

c. $3.80

d. $2

e. $5

133.              Suppose Al, Betty, and Carl own the only fishing companies in your village. Suppose the
                            market price today is $10 per fish. Suppose Al catches 4,000 fish with an average total
                            cost of $7.50, Betty catches 6,000 fish with an average total cost of $6, and Carl catches
                            10,000 fish with an average total cost of $5. If everyone is a profit maximizer, what is
                            Betty’s marginal cost?

a. $6

b. $7

c. $8

d. $9

e. $10

134.              Suppose you are producing where MC = AVC = $3 and this is loss minimizing. If market
                            reports predict that the price of your product will reach a long-run equilibrium level that
                            is $4 higher than it is today, you should

a. increase output in advance of the expected price increase

b. remain in business

c. shut down

d. remain in business only if your most efficient production level has an average total
cost less than or equal to $7

              e.               shut down until the price increases, then get back in business135.Suppose a profit-maximizing firm finds itself producing 1,000 cellular phones each
                            week. The profit is $400 per week. What will the profit be if it were to minimize
                            costs at that output level?

a. $100

b. $200

c. $300

d. $400

e. $500

136.              Suppose a fishing boat currently brings 10,000 fish to market and earns a profit of
                            $40,000 when the price of fish is $8. Suppose the boat dealer had overcharged the boat
                            owner for the boat. Upon receiving a refund of $25,000 from the dealer, what will happen
                            to the AVC of producing 10,000 fish?

a. increases by $25

b. increases by $2.50

c. does not change

d. decreases by $2.50

e. decreases by $25

137.              Suppose a fishing boat currently brings 10,000 fish to market and earns a profit of
                            $40,000 when the price of fish is $8. Suppose the boat dealer had overcharged the boat
                            owner for the boat. Upon receiving a refund of $25,000 from the dealer, what will happen
                            to the ATC of producing 10,000 fish?

a. increases by $25

b. increases by $2.50

c. does not change

d. decreases by $2.50

e. decreases by $25

138.              Suppose a fishing boat currently brings 10,000 fish to market and earns a profit of
                            $40,000 when the price of fish is $8. Suppose the boat dealer had overcharged the boat
                            owner for the boat and refunded the overcharged amount. If the profit increases to $7.50
                            per fish, what was the value of the refund from the dealer?

a. $2.50

b. $25,000

c. $3.50

d. $35,000

e. $75,000

139.              Suppose two fishing boats are both run by profit-maximizing captains. Bob’s boat cost
                            him $500,000 and Debra’s boat cost her $400,000. If they both have identical boats and
                            their labor and fuel costs are the same, who will catch more fish?

a. Bob will catch 20 percent fewer fish

b. Debra will catch 20 percent fewer fish

c. they will catch the same

d. Bob will catch 25 percent more fish

e. Debra will catch 25 percent more fish

140.              Suppose a fishing boat currently brings 10,000 fish to market each day and earns a profit
                            of $40,000 when the price of fish is $12. Suppose that there are 100 workers on the boat,
                            and each works 10 hours each day. If their health insurance premiums, paid by the boat
                            owner, increase by $80 per worker, what will the new profit be?

a. $80,000

b. a loss of $40,000

c. $48,000

d. $32,000

e. a loss of $760,000