econ test

question

Total ________ equals price times quantity

answer

revenue

question

Zero __________ profit is the revenue needed for a company to break even and meet operating costs without a loss.

answer

economic

question

The marginal revenue

answer

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

answer

loss

question

To find total revenue, multiply the price and the quantity

answer

...

question

A profit-maximizing ____________ will always operate on the elastic portion of a linear demand curve.

answer

monopolist

question

Total revenue minus the _________ costs and __________ costs of production is economic profit. (

answer

explicit and implicit

question

Profit implies that monopoly firms should expand production up to the point where the marginal revenue equals the marginal cost.

answer

...

question

A company can break even and meet operating costs without a loss when it earns _____ economic profit.

answer

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.

answer

...

question

The demand curve faced by a perfectly competitive firm is perfectly

answer

elastic

question

As the market price decreases, all else held constant, a profit-maximizing firm will ________ its production.

answer

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.

answer

...

question

equals the total revenue minus the total cost.

answer

profit

question

If selling another unit of output increases revenue, demand is

answer

elastic

question

Compared to an unregulated natural monopoly, what is true about the price charged and quantity produced when a natural monopoly is regulated?

answer

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.

answer

...

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.

answer

deadweight loss

question

Monopolies do not achieve ___ efficiency, because they do not produce in such a way that their price equals marginal cost.

answer

allocative

question

Productive efficiency is:

answer

using the fewest resources possible to produce a good or a service.

question

Price discrimination is best described as

answer

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?

answer

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

answer

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:

answer

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.

answer

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

answer

marginal revenue

question

Second-degree price discrimination is also known as pricing.

answer

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.

answer

...

question

Price discrimination is only possible when a firm is a price

answer

maker

question

The vertical distance between the average variable cost and the average total cost curves is equal to the:

answer

average fixed cost.

question

A profit-maximizing firm should produce a level of output where:

answer

marginal revenue equals marginal cost.

question

The long run is:

answer

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:

answer

average variable cost.

question

When the marginal cost falls below the average cost, the average cost should be decreasing.

answer

...

question

If marginal cost is greater than average total cost, then

answer

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.

answer

average

question

The long-run average total cost curve is generally

answer

u shaped

question

what is Economic profit

answer

money earned after taking explicit and implicit costs into account.

question

what is Accounting profit

answer

net income for a company or revenue minus expenses.

question

law of diminishing marginal utility

answer

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

answer

the increase in output that arises from an additional one unit of input

question

Caculate marginal product

answer

divide the change in total product by the change in labor.

question

Rectangular Approach

answer

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

answer

total revenue divided by the quantity sold

question

total revenue

answer

Price x Quantity the total amount of money a firm receives by selling goods or services

question

perfectly competitive industry

answer

occurs when all companies sell identical products

question

natural monopoly

answer

a market that runs most efficiently when one large firm supplies all of the output

question

Franchise monopoly

answer

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

answer

if the Average Cost lies above Average Revenue

1 of 49

question

Total ________ equals price times quantity

answer

revenue

question

Zero __________ profit is the revenue needed for a company to break even and meet operating costs without a loss.

answer

economic

question

The marginal revenue

answer

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

answer

loss

question

To find total revenue, multiply the price and the quantity

answer

...

question

A profit-maximizing ____________ will always operate on the elastic portion of a linear demand curve.

answer

monopolist

question

Total revenue minus the _________ costs and __________ costs of production is economic profit. (

answer

explicit and implicit

question

Profit implies that monopoly firms should expand production up to the point where the marginal revenue equals the marginal cost.

answer

...

question

A company can break even and meet operating costs without a loss when it earns _____ economic profit.

answer

zero

question

answer

...

question

The demand curve faced by a perfectly competitive firm is perfectly

answer

elastic

question

As the market price decreases, all else held constant, a profit-maximizing firm will ________ its production.

answer

decrease

question

answer

...

question

equals the total revenue minus the total cost.

answer

profit

question

If selling another unit of output increases revenue, demand is

answer

elastic

question

Compared to an unregulated natural monopoly, what is true about the price charged and quantity produced when a natural monopoly is regulated?

answer

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.

answer

...

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.

answer

deadweight loss

question

Monopolies do not achieve ___ efficiency, because they do not produce in such a way that their price equals marginal cost.

answer

allocative

question

Productive efficiency is:

answer

using the fewest resources possible to produce a good or a service.

question

Price discrimination is best described as

answer

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?

answer

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

answer

extracts all surplus from consumers.

question

answer

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.

answer

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

answer

marginal revenue

question

Second-degree price discrimination is also known as pricing.

answer

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.

answer

...

question

Price discrimination is only possible when a firm is a price

answer

maker

question

The vertical distance between the average variable cost and the average total cost curves is equal to the:

answer

average fixed cost.

question

A profit-maximizing firm should produce a level of output where:

answer

marginal revenue equals marginal cost.

question

The long run is:

answer

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:

answer

average variable cost.

question

When the marginal cost falls below the average cost, the average cost should be decreasing.

answer

...

question

If marginal cost is greater than average total cost, then

answer

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.

answer

average

question

The long-run average total cost curve is generally

answer

u shaped

question

what is Economic profit

answer

money earned after taking explicit and implicit costs into account.

question

what is Accounting profit

answer

net income for a company or revenue minus expenses.

question

law of diminishing marginal utility

answer

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

answer

the increase in output that arises from an additional one unit of input

question

Caculate marginal product

answer

divide the change in total product by the change in labor.

question

Rectangular Approach

answer

question

average revenue

answer

total revenue divided by the quantity sold

question

total revenue

answer

Price x Quantity the total amount of money a firm receives by selling goods or services

question

perfectly competitive industry

answer

occurs when all companies sell identical products

question

natural monopoly

answer

a market that runs most efficiently when one large firm supplies all of the output

question

Franchise monopoly

answer

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

answer

if the Average Cost lies above Average Revenue

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