m201 final

question

As an individual consumes more of a particular commodity, the total level of utility derived from that consumption usually

answer

increases at a decreasing rate

question

The long-run supply curve for a firm in a perfectly competitive market is

answer

its marginal cost curve (above average total cost)

question

Since producers must be compensated for the rising opportunity cost that accompanies increases in output,

answer

the supply curve usually slopes upward

question

If an individual's income rises 20 percent and consumption of beef rises 10 percent, the income elasticity for beef by the individual is

answer

0.5

question

If the price elasticity of demand is -1.5, a 1.5 percent decrease in price will increase quantity demanded by

answer

2.25%

question

According to Table below, what is the price elasticity of demand (using % change equation only) when price rises from $8.50 to $9 (using $8.50 as a base)? Price Quantity Demanded Per unit Per Week $10.00 25 9.50 30 9.00 35 8.50 40 8.00 45 7.50 50 7.00 55 6.50 60 6.00 65 5.50 70 5.00 75

answer

2.12 ?

question

According to Table below, what is the price elasticity of demand if the price falls from $8.00 to $7.50? (Use mid-point equation only) Price Quantity Demanded Per unit Per Week $10.00 25 9.50 30 9.00 35 8.50 40 8.00 45 7.50 50 7.00 55 6.50 60 6.00 65 5.50 70 5.00 75

answer

1.63

question

In equilibrium, which of the following conditions is common to both pure monopoly and pure competition?

answer

MR = MC

question

OPEC is an influential international oil exporting organization. It can be categorized as which of the following market structure.

answer

oligopoly

question

A monopolist

answer

is constrained in its pricing decisions by the demand curve it faces

question

A price maker is someone who

answer

can influence the price.

question

A monopolist maximizes profits by finding

answer

the rate of output where marginal revenue cquals marginal cost.

question

For a monopolist, marginal revenue is less than price because

answer

the monopolist must lower price on all units sold and not just on the last unit sold

question

Input of Labor # of workers 1 2 3 4 5 6
Total Product # of outputs 20 66 116 176 206 226
In Table above, Diminish marginal product occurs after actually employing the

answer

fifth worker

question

In the table below, Input of Labor # of workers 1 2 3 4 5 6
Total Product # of outputs 20 66 116 176 206 226
the marginal product of the fourth worker is

answer

question

Input of Labor (# of workers in weeks) 1 2 3 4 5 6
Total Product (# of snowboards produced) 30 68 110 140 135
In Table, marginal product becomes negative after the

answer

fourth worker.

question

Input of Labor (# of workers in week) 1 2 3 4 5 6
Total Product (# of snowboards produced) 68 110 140 135
In Table, diminishing marginal returns (DMR) ocur after

answer

third worker.

question

Economic profits are ______ when the firm is at its short-run break-even point.

answer

zero

question

A firm is currently producing at the rate of output that just barely covers its variable costs. If demand falls, the firm should

answer

shut down

question

For a perfect competitive market, marginal revenue equals

answer

the price.

question

The demand curve of a perfectly competitive firm is

answer

perfectly elastic.

question

A price elasticity of 0.8 indicates that a

answer

1 percent increase in price leads to a .8 percent decrease in quantity demanded

question

If a firm is price discriminating, we know that

answer

it has market power.

question

Linsinity graduates from Harved with a choice of playing professional football at $2 million a year or teaching for $50,000 a year. He decides to play football, but eight years later he quits football to make movies for $3 million a year. His opportunity cost at graduation was _____ and eight years later was _____

answer

$50,000; $2 million

question

Suppose a perfectly competitive firm faces the following short-run cost and revenue conditions: ATC > AVC; MC > MR. The firm should

answer

decrease output.

question

A monopolist faces a demand curve that

answer

is downward sloping.

question

The price elasticity of demand would be the lowest for

answer

drinking water

question

The profit maximizing behavior of a monopoly is different from that of a perfectly competitive firm in that a monopoly can

answer

control the desired price or level of output to maximize profits, but a perfectly competitive firm can only choose the desired output.

question

When the price of beef is $2.00/lb, the quantity demanded of hamburger is 50 units; when the price of beef is $3.00/lb, the quantity demanded of hamburger is 60 units. The cross-price elasticity of demand between beef and hamburger is

answer

+5/11

question

Which of the following firm is considered as an oligopoly?

answer

mobile phone carrier at&t

question

A single-plant firm trying to select the appropriate-sized plant for a particular rate of output will choose the size plant

answer

whose short-run average total cost curve is lowest at that rate of output.

question

For a competitive firm, any output price below its minimum AVC is its

answer

shut-down price.

question

If we are graphing total utility, then the total utility curve will

answer

be increasing as long as marginal utility is positive.

question

Firms in a competitive industry are producing goods efficiently in the long run if each is producing at the minimum point of the

answer

LRAC curve.

question

It is correct to state that a society which is on its production possibilities curve is

answer

fully utilizing its productive resources.

question

Which of the following is NOT true for a perfectly competitive firm in the long run?

answer

mc > ac

question

If a firm suffers the short-run loss but continues operate, the firm is

answer

just covering it's variable costs

question

A competitive firm's short-run break-even output occurs

answer

at the minimum point of its ATC curve.

question

The fact that consumers will purchase more of a good that has become relatively cheaper

answer

is called the price-substitution effect.

question

In a perfectly competitive market, if P > ATC in the short run, there is apt to be

answer

entry of new firms into the market.

question

Which of the following would cause an economy to be producing at a point inside its production possibilities curve?

answer

unemployment and an inefficient use of available resources

question

At a competitive firm's short-run break-even price,

answer

p = atc

question

If an individual's income rises 40 percent and purchases of clothing rise 50 percent, the income elasticity for clothing by the individual is

answer

1.25.

question

Suppose the cross price elasticity of demand between new iPad 4G and its carrier's 4G network is -1.32. This indicates that the two products are.

answer

complements

question

The longer the time frame involved, the more likely it is that the demand will be relatively

answer

elastic.

question

Economic profit is equal to

answer

total revenue minus explicit and implicit costs.

question

When an entrepreneur invests his own financial capital in order to start a business,

answer

the opportunity cost of capital should be included in the economic cost of doing business.

question

If the price elasticity of demand is 4, a 5 percent decrease in price will increase quantity demanded by

answer

20% ???

question

At what productive circumstance, a frim's AVC will converge with (approach to) average total course curve (ATC)

answer

when average fixed cost approach zero

question

A monopolist faces a demand curve that

answer

is downward sloping.

question

A patent on a product gives a firm

answer

protection from having the invention copied or stolen for a period of 17 to 20 years.

question

Price discrimination is the

answer

selling a given product at more than one price when the price difference is unrelated to cost differences.

question

The profit maximizing behavior of a monopoly is different from that of a perfectly competitive fırm in that a monopoly can

answer

control the desired price or level of output to maximize profits, but a perfectly competitive fırm can only choose the desired output.

question

A monopolist maximizes profits by finding

answer

the rate of output where marginal revenue equals marginal cost.

question

When price is $5 per unit, quantity demanded is 10 units. When price is $8 per unit, quantity demanded is 6 units. The value of the price elasticity of demand is approximately (before taking absolute value)

answer

-13/12.

question

Input of Labor # of workers Total Product # of outputs 12 56 110 156 176 186 In Table above, marginal product starts to diminish after the

answer

third worker.

question

Some costs do not vary with the quantity of output produced. Those costs are called

answer

total fixed cost

question

For a perfect competitor in the market, marginal revenue equals

answer

the price,

question

A diseconomy of scale indicates that a firm is producing its __ _at a _____ ATC.

answer

ouput, higher

question

Price discrimination is most likely in the case of a monopolist selling

answer

private college tuition.

1 of 60

question

As an individual consumes more of a particular commodity, the total level of utility derived from that consumption usually

answer

increases at a decreasing rate

question

The long-run supply curve for a firm in a perfectly competitive market is

answer

its marginal cost curve (above average total cost)

question

Since producers must be compensated for the rising opportunity cost that accompanies increases in output,

answer

the supply curve usually slopes upward

question

If an individual's income rises 20 percent and consumption of beef rises 10 percent, the income elasticity for beef by the individual is

answer

0.5

question

If the price elasticity of demand is -1.5, a 1.5 percent decrease in price will increase quantity demanded by

answer

2.25%

question

answer

2.12 ?

question

answer

1.63

question

In equilibrium, which of the following conditions is common to both pure monopoly and pure competition?

answer

MR = MC

question

OPEC is an influential international oil exporting organization. It can be categorized as which of the following market structure.

answer

oligopoly

question

A monopolist

answer

is constrained in its pricing decisions by the demand curve it faces

question

A price maker is someone who

answer

can influence the price.

question

A monopolist maximizes profits by finding

answer

the rate of output where marginal revenue cquals marginal cost.

question

For a monopolist, marginal revenue is less than price because

answer

the monopolist must lower price on all units sold and not just on the last unit sold

question

Input of Labor # of workers 1 2 3 4 5 6
Total Product # of outputs 20 66 116 176 206 226
In Table above, Diminish marginal product occurs after actually employing the

answer

fifth worker

question

In the table below, Input of Labor # of workers 1 2 3 4 5 6
Total Product # of outputs 20 66 116 176 206 226
the marginal product of the fourth worker is

answer

question

Input of Labor (# of workers in weeks) 1 2 3 4 5 6
Total Product (# of snowboards produced) 30 68 110 140 135
In Table, marginal product becomes negative after the

answer

fourth worker.

question

Input of Labor (# of workers in week) 1 2 3 4 5 6
Total Product (# of snowboards produced) 68 110 140 135
In Table, diminishing marginal returns (DMR) ocur after

answer

third worker.

question

Economic profits are ______ when the firm is at its short-run break-even point.

answer

zero

question

A firm is currently producing at the rate of output that just barely covers its variable costs. If demand falls, the firm should

answer

shut down

question

For a perfect competitive market, marginal revenue equals

answer

the price.

question

The demand curve of a perfectly competitive firm is

answer

perfectly elastic.

question

A price elasticity of 0.8 indicates that a

answer

1 percent increase in price leads to a .8 percent decrease in quantity demanded

question

If a firm is price discriminating, we know that

answer

it has market power.

question

answer

$50,000; $2 million

question

Suppose a perfectly competitive firm faces the following short-run cost and revenue conditions: ATC > AVC; MC > MR. The firm should

answer

decrease output.

question

A monopolist faces a demand curve that

answer

is downward sloping.

question

The price elasticity of demand would be the lowest for

answer

drinking water

question

The profit maximizing behavior of a monopoly is different from that of a perfectly competitive firm in that a monopoly can

answer

control the desired price or level of output to maximize profits, but a perfectly competitive firm can only choose the desired output.

question

answer

+5/11

question

Which of the following firm is considered as an oligopoly?

answer

mobile phone carrier at&t

question

A single-plant firm trying to select the appropriate-sized plant for a particular rate of output will choose the size plant

answer

whose short-run average total cost curve is lowest at that rate of output.

question

For a competitive firm, any output price below its minimum AVC is its

answer

shut-down price.

question

If we are graphing total utility, then the total utility curve will

answer

be increasing as long as marginal utility is positive.

question

Firms in a competitive industry are producing goods efficiently in the long run if each is producing at the minimum point of the

answer

LRAC curve.

question

It is correct to state that a society which is on its production possibilities curve is

answer

fully utilizing its productive resources.

question

Which of the following is NOT true for a perfectly competitive firm in the long run?

answer

mc > ac

question

If a firm suffers the short-run loss but continues operate, the firm is

answer

just covering it's variable costs

question

A competitive firm's short-run break-even output occurs

answer

at the minimum point of its ATC curve.

question

The fact that consumers will purchase more of a good that has become relatively cheaper

answer

is called the price-substitution effect.

question

In a perfectly competitive market, if P > ATC in the short run, there is apt to be

answer

entry of new firms into the market.

question

Which of the following would cause an economy to be producing at a point inside its production possibilities curve?

answer

unemployment and an inefficient use of available resources

question

At a competitive firm's short-run break-even price,

answer

p = atc

question

If an individual's income rises 40 percent and purchases of clothing rise 50 percent, the income elasticity for clothing by the individual is

answer

1.25.

question

Suppose the cross price elasticity of demand between new iPad 4G and its carrier's 4G network is -1.32. This indicates that the two products are.

answer

complements

question

The longer the time frame involved, the more likely it is that the demand will be relatively

answer

elastic.

question

Economic profit is equal to

answer

total revenue minus explicit and implicit costs.

question

When an entrepreneur invests his own financial capital in order to start a business,

answer

the opportunity cost of capital should be included in the economic cost of doing business.

question

If the price elasticity of demand is 4, a 5 percent decrease in price will increase quantity demanded by

answer

20% ???

question

At what productive circumstance, a frim's AVC will converge with (approach to) average total course curve (ATC)

answer

when average fixed cost approach zero

question

A monopolist faces a demand curve that

answer

is downward sloping.

question

A patent on a product gives a firm

answer

protection from having the invention copied or stolen for a period of 17 to 20 years.

question

Price discrimination is the

answer

selling a given product at more than one price when the price difference is unrelated to cost differences.

question

The profit maximizing behavior of a monopoly is different from that of a perfectly competitive fırm in that a monopoly can

answer

control the desired price or level of output to maximize profits, but a perfectly competitive fırm can only choose the desired output.

question

A monopolist maximizes profits by finding

answer

the rate of output where marginal revenue equals marginal cost.

question

answer

-13/12.

question

Input of Labor # of workers Total Product # of outputs 12 56 110 156 176 186 In Table above, marginal product starts to diminish after the

answer

third worker.

question

Some costs do not vary with the quantity of output produced. Those costs are called

answer

total fixed cost

question

For a perfect competitor in the market, marginal revenue equals

answer

the price,

question

A diseconomy of scale indicates that a firm is producing its __ _at a _____ ATC.

answer

ouput, higher

question

Price discrimination is most likely in the case of a monopolist selling

answer

private college tuition.

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