Micro Economics Midterm 2

Q: When MR<MC

producing more will increase cost

question

MPL/W > MPK/R

answer

Hire more labor or reduce capital

question

In a perfectly competitive firm AC>D

answer

negative profit

question

In perfectly competitive firm P>AC

answer

positive profit

question

In a perfectly competitive firm decision making occurs when

answer

MR=MC

question

Monopoly price is marked up over

answer

MC+MR

question

In a monopoly price makeup depends on

answer

elasticity

question

what gives natural monopoly advantages

answer

cost advantage over potential firms due to large fixed cost and small variable cost

question

AC=

answer

fixed cost+variable cost

question

which firms have profit in the long run

answer

monopoly + oligopoly

question

Which type of pricing has a positive profit

answer

Average cost pricing

question

When do consumers benefit form AC pricing

answer

When more is produced

question

profit=

answer

TR-TC

question

profit per unit=

answer

TR/Q-TC/Q

question

economic profit=

answer

revenue-all cost

question

TR=

answer

Price * Quantity

question

TR-accounting cost=

answer

accounting profit

question

accounting profit-implicit cost=

answer

economic profit

question

Is marginal cost affected by change in fixed cost?

answer

no, but it does total cost and average cost

question

When MR>MC

answer

increase profit by producing more

question

When MR<MC

answer

producing more will increase cost

question

for a firm, the short run is defined as

answer

a period of time in which at least one input remains unchangeable

question

What inputs can be changed by a firm in the long run

answer

all of them

question

If the long-run average cost curve is horizontal, it implies that the firm is experiencing _________.

answer

constant returns to scale

question

suppose a firm doubles its inputs, if the firm is experiencing diseconomies of scale then output will..

answer

increase but less then double

question

a profit maximizing monopoly will produce when

answer

marginal revenue is less than the price

question

If a monopoly faces a demand curve that is downward-sloping, then marginal revenue will be?

answer

must be less then price

question

in the long run a. monopolistic competitive firm all produce when price

answer

equals average cost and is greater than marginal cost

1 of 27

question

MPL/W > MPK/R

answer

Hire more labor or reduce capital

question

In a perfectly competitive firm AC>D

answer

negative profit

question

In perfectly competitive firm P>AC

answer

positive profit

question

In a perfectly competitive firm decision making occurs when

answer

MR=MC

question

Monopoly price is marked up over

answer

MC+MR

question

In a monopoly price makeup depends on

answer

elasticity

question

what gives natural monopoly advantages

answer

cost advantage over potential firms due to large fixed cost and small variable cost

question

AC=

answer

fixed cost+variable cost

question

which firms have profit in the long run

answer

monopoly + oligopoly

question

Which type of pricing has a positive profit

answer

Average cost pricing

question

When do consumers benefit form AC pricing

answer

When more is produced

question

profit=

answer

TR-TC

question

profit per unit=

answer

TR/Q-TC/Q

question

economic profit=

answer

revenue-all cost

question

TR=

answer

Price * Quantity

question

TR-accounting cost=

answer

accounting profit

question

accounting profit-implicit cost=

answer

economic profit

question

Is marginal cost affected by change in fixed cost?

answer

no, but it does total cost and average cost

question

When MR>MC

answer

increase profit by producing more

question

When MR<MC

answer

producing more will increase cost

question

for a firm, the short run is defined as

answer

a period of time in which at least one input remains unchangeable

question

What inputs can be changed by a firm in the long run

answer

all of them

question

If the long-run average cost curve is horizontal, it implies that the firm is experiencing _________.

answer

constant returns to scale

question

suppose a firm doubles its inputs, if the firm is experiencing diseconomies of scale then output will..

answer

increase but less then double

question

a profit maximizing monopoly will produce when

answer

marginal revenue is less than the price

question

If a monopoly faces a demand curve that is downward-sloping, then marginal revenue will be?

answer

must be less then price

question

in the long run a. monopolistic competitive firm all produce when price

answer

equals average cost and is greater than marginal cost

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Micro Economics Midterm 2

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