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# econ test

question
Total ________ equals price times quantity
revenue
question
Zero __________ profit is the revenue needed for a company to break even and meet operating costs without a loss.
economic
question
The marginal revenue
extra or additional revenue associated with the production of an additional unit of output.
question
The level of profit that occurs when the total revenue is less than the total cost is called an economic
loss
question
To find total revenue, multiply the price and the quantity
...
question
A profit-maximizing ____________ will always operate on the elastic portion of a linear demand curve.
monopolist
question
Total revenue minus the _________ costs and __________ costs of production is economic profit. (
explicit and implicit
question
Profit implies that monopoly firms should expand production up to the point where the marginal revenue equals the marginal cost.
...
question
A company can break even and meet operating costs without a loss when it earns _____ economic profit.
zero
question
Reason:
To find MR, you will first need to find Total Revenue at 5 units and 10 units. TR = P × Q. TR at 5 = (35)(5) = \$175. TR at 10 = (30)(10) = \$300. MR = change in TR/change in Q. At 10 units, MR = (300 − 175)/(10 − 5) = (125)/(5) = \$25.
...
question
The demand curve faced by a perfectly competitive firm is perfectly
elastic
question
As the market price decreases, all else held constant, a profit-maximizing firm will ________ its production.
decrease
question
To find the profit maximizing quantity and price, first find where MR = MC. This is at a quantity of 7, which is the profit maximizing quantity. Then, find where 7 units intersects the demand curve, at a price of \$6.
...
question
equals the total revenue minus the total cost.
profit
question
If selling another unit of output increases revenue, demand is
elastic
question
Compared to an unregulated natural monopoly, what is true about the price charged and quantity produced when a natural monopoly is regulated?
Price is lower and Quantity is higher
question
Pure monopolies do not achieve allocative efficiency meaning that they do not produce the amount of output that maximizes the sum of and surplus.
...
question
The difference between the economic surplus when the market is at its competitive equilibrium and the economic surplus when the market is not in equilibrium is the.
question
Monopolies do not achieve ___ efficiency, because they do not produce in such a way that their price equals marginal cost.
allocative
question
Productive efficiency is:
using the fewest resources possible to produce a good or a service.
question
Price discrimination is best described as
the practice of selling the same good or service to different consumers at different prices.
question
The perfect monopoly extracts all surplus from consumers, yielding higher profits than any other pricing method when it employs which of the following?
Perfect price discrimination
Personal pricing
First-degree price discrimination
question
By charging consumers the highest price they are willing and able to pay, the pure monopoly
extracts all surplus from consumers.
question
Suppose Carl's Candies sells 100 boxes of candy for \$5 each. The total fixed cost of the 100 boxes is \$100 and the average variable cost of the 100 boxes is \$1.50 per box. Carl's makes a total profit of:
250
question
In a pure monopoly, the firm is willing to sell to anyone willing and able to pay at least the marginal cost of production.
The result is that output is produced where D = MC
question
When a pure monopoly practices first-degree price discrimination, the demand curve becomes the
marginal revenue
question
Second-degree price discrimination is also known as pricing.
block pricing
question
By charging consumers the highest price they are willing and able to pay, the pure monopoly extracts all surplus from consumers yielding higher than any other pricing method available to the firm.
...
question
Price discrimination is only possible when a firm is a price
maker
question
The vertical distance between the average variable cost and the average total cost curves is equal to the:
average fixed cost.
question
A profit-maximizing firm should produce a level of output where:
marginal revenue equals marginal cost.
question
The long run is:
a period of time in which all inputs of production are variable
question
Total variable cost divided by the amount of output produced is equal to:
average variable cost.
question
When the marginal cost falls below the average cost, the average cost should be decreasing.
...
question
If marginal cost is greater than average total cost, then
Average total cost is increasing
question
A curve showing _____________ the average total cost possible for any given level of output when all inputs of production are variable is the long-run average cost curve.
average
question
The long-run average total cost curve is generally
u shaped
question
what is Economic profit
money earned after taking explicit and implicit costs into account.
question
what is Accounting profit
net income for a company or revenue minus expenses.
question
law of diminishing marginal utility
the principle that consumers experience diminishing additional satisfaction as they consume more of a good or service during a given period of time
question
marginal product
the increase in output that arises from an additional one unit of input
question
Caculate marginal product
divide the change in total product by the change in labor.
question
Rectangular Approach
A rectangle is a pattern that occurs on price charts. A rectangle is formed when the price reaches the same horizontal support and resistance levels multiple times. The price is confined to moving between the two horizontal levels, creating a rectangle.
question
average revenue
total revenue divided by the quantity sold
question
total revenue
Price x Quantity the total amount of money a firm receives by selling goods or services
question
perfectly competitive industry
occurs when all companies sell identical products
question
natural monopoly
a market that runs most efficiently when one large firm supplies all of the output
question
Franchise monopoly
When the government grants a company the sole right to sell or manufacture a product or service in a particular area
question
A monopolist can be a loss
if the Average Cost lies above Average Revenue
1 of 49
question
Total ________ equals price times quantity
revenue
question
Zero __________ profit is the revenue needed for a company to break even and meet operating costs without a loss.
economic
question
The marginal revenue
extra or additional revenue associated with the production of an additional unit of output.
question
The level of profit that occurs when the total revenue is less than the total cost is called an economic
loss
question
To find total revenue, multiply the price and the quantity
...
question
A profit-maximizing ____________ will always operate on the elastic portion of a linear demand curve.
monopolist
question
Total revenue minus the _________ costs and __________ costs of production is economic profit. (
explicit and implicit
question
Profit implies that monopoly firms should expand production up to the point where the marginal revenue equals the marginal cost.
...
question
A company can break even and meet operating costs without a loss when it earns _____ economic profit.
zero
question
Reason:
To find MR, you will first need to find Total Revenue at 5 units and 10 units. TR = P × Q. TR at 5 = (35)(5) = \$175. TR at 10 = (30)(10) = \$300. MR = change in TR/change in Q. At 10 units, MR = (300 − 175)/(10 − 5) = (125)/(5) = \$25.
...
question
The demand curve faced by a perfectly competitive firm is perfectly
elastic
question
As the market price decreases, all else held constant, a profit-maximizing firm will ________ its production.
decrease
question
To find the profit maximizing quantity and price, first find where MR = MC. This is at a quantity of 7, which is the profit maximizing quantity. Then, find where 7 units intersects the demand curve, at a price of \$6.
...
question
equals the total revenue minus the total cost.
profit
question
If selling another unit of output increases revenue, demand is
elastic
question
Compared to an unregulated natural monopoly, what is true about the price charged and quantity produced when a natural monopoly is regulated?
Price is lower and Quantity is higher
question
Pure monopolies do not achieve allocative efficiency meaning that they do not produce the amount of output that maximizes the sum of and surplus.
...
question
The difference between the economic surplus when the market is at its competitive equilibrium and the economic surplus when the market is not in equilibrium is the.
question
Monopolies do not achieve ___ efficiency, because they do not produce in such a way that their price equals marginal cost.
allocative
question
Productive efficiency is:
using the fewest resources possible to produce a good or a service.
question
Price discrimination is best described as
the practice of selling the same good or service to different consumers at different prices.
question
The perfect monopoly extracts all surplus from consumers, yielding higher profits than any other pricing method when it employs which of the following?
Perfect price discrimination
Personal pricing
First-degree price discrimination
question
By charging consumers the highest price they are willing and able to pay, the pure monopoly
extracts all surplus from consumers.
question
Suppose Carl's Candies sells 100 boxes of candy for \$5 each. The total fixed cost of the 100 boxes is \$100 and the average variable cost of the 100 boxes is \$1.50 per box. Carl's makes a total profit of:
250
question
In a pure monopoly, the firm is willing to sell to anyone willing and able to pay at least the marginal cost of production.
The result is that output is produced where D = MC
question
When a pure monopoly practices first-degree price discrimination, the demand curve becomes the
marginal revenue
question
Second-degree price discrimination is also known as pricing.
block pricing
question
By charging consumers the highest price they are willing and able to pay, the pure monopoly extracts all surplus from consumers yielding higher than any other pricing method available to the firm.
...
question
Price discrimination is only possible when a firm is a price
maker
question
The vertical distance between the average variable cost and the average total cost curves is equal to the:
average fixed cost.
question
A profit-maximizing firm should produce a level of output where:
marginal revenue equals marginal cost.
question
The long run is:
a period of time in which all inputs of production are variable
question
Total variable cost divided by the amount of output produced is equal to:
average variable cost.
question
When the marginal cost falls below the average cost, the average cost should be decreasing.
...
question
If marginal cost is greater than average total cost, then
Average total cost is increasing
question
A curve showing _____________ the average total cost possible for any given level of output when all inputs of production are variable is the long-run average cost curve.
average
question
The long-run average total cost curve is generally
u shaped
question
what is Economic profit
money earned after taking explicit and implicit costs into account.
question
what is Accounting profit
net income for a company or revenue minus expenses.
question
law of diminishing marginal utility
the principle that consumers experience diminishing additional satisfaction as they consume more of a good or service during a given period of time
question
marginal product
the increase in output that arises from an additional one unit of input
question
Caculate marginal product
divide the change in total product by the change in labor.
question
Rectangular Approach
A rectangle is a pattern that occurs on price charts. A rectangle is formed when the price reaches the same horizontal support and resistance levels multiple times. The price is confined to moving between the two horizontal levels, creating a rectangle.
question
average revenue
total revenue divided by the quantity sold
question
total revenue
Price x Quantity the total amount of money a firm receives by selling goods or services
question
perfectly competitive industry
occurs when all companies sell identical products
question
natural monopoly
a market that runs most efficiently when one large firm supplies all of the output
question
Franchise monopoly
When the government grants a company the sole right to sell or manufacture a product or service in a particular area
question
A monopolist can be a loss
if the Average Cost lies above Average Revenue

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