Econ Exam

question

Which costs are affected by the level of output produced?

answer

variable costs

question

implicit costs

answer

Indirect, non-purchased, or opportunity costs of resources provided by the entrepreneur

question

accounting cost are

answer

explicit cost

question

When the marginal product of labor is greater than the average product of labor, then the average product of labor must be

answer

increasing

question

When marginal cost is less than average total cost, average total cost must be

answer

decreasing

question

Economies of scale happen when the firm's long run average total cost ________ as output increases.

answer

decreases

question

What is the relationship between price, average revenue, and marginal revenue for a firm in a perfectly competitive market?

answer

Price is equal to both average revenue and marginal revenue.

question

In perfect competition, long-run equilibrium occurs when the economic profit is

answer

zero

question

In a perfectly competitive industry with constant costs, the long-run supply curve will be

answer

horizontal

question

In a perfectly competitive industry with increasing average costs, the long-run supply curve will be

answer

upward sloping

question

Which of the following terms best describes the result of the forces of competition driving the market price to the minimum average cost of the typical firm?

answer

Productive efficiency

question

Which of the following terms best describes a state of the economy in which production reflects consumer preferences?

answer

allocative efficiency

question

Which of the following rights is given to the holder of a patent?

answer

the exclusive right to a new product for a limited period

question

The more cell phones in use, the more valuable they become to consumers. This is an example of

answer

network externalities

question

Assume that an industry that began as a perfectly competitive industry becomes a monopoly. Compared to when the industry was perfectly competitive, the monopolist will

answer

charge a higher price and produce less output.

question

What is the value of the Herfindahl-Hirschman Index (HHI) when there are four firms in an industry and each firm has an equal market share?

answer

2500

question

The Department of Justice and the FTC consider markets as highly concentrated if the post-merger HHI for a proposed horizontal merger is

answer

above 2,500

question

Profit happens when

answer

price is higher than AVG

question

shutdown when

answer

avc is equal to mr

question

average revenue

answer

total revenue/quantity

question

Natural monopoly happens when the

answer

average total cost curve is decreasing

1 of 21

question

Which costs are affected by the level of output produced?

answer

variable costs

question

implicit costs

answer

Indirect, non-purchased, or opportunity costs of resources provided by the entrepreneur

question

accounting cost are

answer

explicit cost

question

When the marginal product of labor is greater than the average product of labor, then the average product of labor must be

answer

increasing

question

When marginal cost is less than average total cost, average total cost must be

answer

decreasing

question

Economies of scale happen when the firm's long run average total cost ________ as output increases.

answer

decreases

question

What is the relationship between price, average revenue, and marginal revenue for a firm in a perfectly competitive market?

answer

Price is equal to both average revenue and marginal revenue.

question

In perfect competition, long-run equilibrium occurs when the economic profit is

answer

zero

question

In a perfectly competitive industry with constant costs, the long-run supply curve will be

answer

horizontal

question

In a perfectly competitive industry with increasing average costs, the long-run supply curve will be

answer

upward sloping

question

Which of the following terms best describes the result of the forces of competition driving the market price to the minimum average cost of the typical firm?

answer

Productive efficiency

question

Which of the following terms best describes a state of the economy in which production reflects consumer preferences?

answer

allocative efficiency

question

Which of the following rights is given to the holder of a patent?

answer

the exclusive right to a new product for a limited period

question

The more cell phones in use, the more valuable they become to consumers. This is an example of

answer

network externalities

question

Assume that an industry that began as a perfectly competitive industry becomes a monopoly. Compared to when the industry was perfectly competitive, the monopolist will

answer

charge a higher price and produce less output.

question

What is the value of the Herfindahl-Hirschman Index (HHI) when there are four firms in an industry and each firm has an equal market share?

answer

2500

question

The Department of Justice and the FTC consider markets as highly concentrated if the post-merger HHI for a proposed horizontal merger is

answer

above 2,500

question

Profit happens when

answer

price is higher than AVG

question

shutdown when

answer

avc is equal to mr

question

average revenue

answer

total revenue/quantity

question

Natural monopoly happens when the

answer

average total cost curve is decreasing

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