Microeconomics
Unit 3 Practice Sheet
Part 1: Production Function- Use the table to answer the questions.
1. What is the marginal product of the 4th worker? Show your work.
2. After which worker does the law of diminishing marginal returns set it? Why?
Part 2: Costs of
Production- Fill in the
blanks in the chart and
answer the question.
3. Why does the marginal
cost of each unit initially
fall then increase as
more units are
produced?
Part 3: Cost Curves- Use the graph below to answer the questions. Show your work.
4. What is the marginal cost of the 8th unit?
5. Calculate the fixed cost of producing 4 units?
6. Calculate the total variable cost of producing 9
units?
7. Calculate the total cost of producing 9 units?
8. Calculate the average fixed cost of 8 units?
9. Why does the marginal cost (MC) intersect the
average total cost(ATC) at the ATC’s minimum?
© Copyright Jacob Clifford 2020. Ultimate Review Packet
Teachers- Do NOT use this in your classroom. Contact me if you want to use this resource with your students
Microeconomics
Unit 3 Practice Sheet
Part 4: Perfect Competition- Use the graph below for a perfectly competitive firm to answer the
questions.
10. If the price is $8, what is the profit
maximizing quantity?
11. Calculate the total cost at the profit
maximizing quantity.
12. Calculate the profit or loss at the
profit maximizing quantity.
13. How much profit will this firm earn if
they increase the price $2 higher
than the market price?
14. What is the profit maximizing price
and quantity in the long-run?
15. If the market price is $5, will the firm earn economic profit, accounting profit, neither, or both? Why?
Part 5: Chart Practice - Use the chart to answer the questions.
16. If the market price is $15, what is the profit maximizing quantity?
17. Calculate the total revenue at the profit maximizing quantity.
18. Calculate the profit or loss at the profit maximizing quantity.
19. Calculate the profit or loss of producing 7 units.
20. Calculate the profit or loss of producing 3 units.
21. Assume that the market price fell to $10. Calculate the profit or
loss at the profit maximizing quantity.
22. If the market price is $10, should this firm shut down in the short-run? Why or why not?
© Copyright Jacob Clifford 2020. Ultimate Review Packet
Teachers- Do NOT use this in your classroom. Contact me if you want to use this resource with your students
