Micro Exam #2 Sanders

question

________ demand in the output markets and supply in the input markets. Whereas _______ demand is the input markets and supply in the output markets.

answer

Households, Firms

question

When looking at a firm operating under Perfect Competition we assume that:

answer

No firm is large enough to have control over price and each firm is producing a homogenous product

question

Which of the following statements concerning total and marginal utility is correct?

answer

Total utility is the sum of marginal utility

question

True or False: Points beneath your budget constraint curve represent combinations of goods that you can't afford

answer

False

question

Every household must decide..

answer

-How much of each product, or output to demand
-How much labor to supply
-how much to spend today and how much to save for the future
D. All of the Above

question

________ says that the more of any one good consumer in a given period, the less satisfaction (utility) generated by consuming each additional (marginal) unit of the same good.

answer

The law of diminishing marginal utility

question

________ satisfaction gained by the consumption of all of the units of a particular good or service

answer

Totat Utility

question

True or False: When the price of something we regularly falls, we are worse off. When the price of something that we buy regularly rises, we are better off.

answer

False

question

True or False: When there is a wage increase and the income effect outweighs the substitution effect, you demand less leisure, and work more.

answer

False

question

True or False: Consumer surplus is the difference between the maximum amount a person is willing to pay for a good and its current price.

answer

True

question

True or False: When there is a wage increase and the substitution effect outweighs the income effect, you substitute is more free time and work less.

answer

True

question

True or False: All of the points on a single indifference curve represent the same amount of overall utilty

answer

True

question

True or False: An increase in income can create a whole new budget constraint

answer

True

question

True or False: The utility gained from consuming a good or service is the same for each consumer

answer

False

question

Most empirical evidence indicates that saving tends to fall as the interest rate rises

answer

False

question

Which of the following is NOT a decision that all firms must take?

answer

How much of each input to supply

question

_______ - total cost = profit

answer

Total Revenue

question

In the _______ firms are operating under a fixed scale (fixed factor) of production, and firms can neither enter or exit the industry

answer

Short run

question

The law of diminishing marginal returns states that when additional units of a ______ are added to _____ after a certain point, the marginal product of the variable input declines

answer

Variable input, fixed input

question

The ______ is the production method that minimizes cost

answer

Optimal method of production

question

______ is the additional output that can be produced by adding one more unit of a specific input ( ceteris paribus )

answer

Marginal product

question

If a product can be produced by using human labor, machines or a combination of both, a drastic decrease in the wage rate would likely lead to using more ____________

answer

Labor intensive technology

question

True or False: In the short run there are no fixed factors of production

answer

False

question

True or False: When figuring total economic cost we ignore the opportunity cost of capital (inputs), because they have been forgone.

answer

False

question

True or False: In the long run no firms can enter or exit the market

answer

False

question

True or False: Diminishing returns always apply in the short run, and in the short run every firm will face diminishing returns.

answer

True

question

True or False: A drastic increase in the minimum wage would likely lead to more businesses adopting labor-intensive production methods

answer

False

question

True or False: A positive profit level occurs when a firm is earning above-normal rate of returns on capital

answer

True

question

True or False: The demand curve facing a competitive firm is perfectly elastic. IF a single firm raises its prices above market price, it will sell nothing

answer

True

question

True or False: Capital-intensive technology is technology that relies heavily on machines and non-labor production methods

answer

True

question

_______ is a cost that depends on the level of production chosen.

answer

A variable cost

question

Total cost is:

answer

Fixed costs plus variable costs

question

I own a small lemonade stand at a local fairground, with a monthly fixed cost for having the booth. The process I would dive out this fixed cost to each cup of lemonade I sell is known as ________

answer

Spreading overhead

question

__________ is the increase in total cost that results from producing one more unit of output

answer

Marginal cost

question

The profit-maxmizing output for ALL firms is the output level where:

answer

MR = MC

question

Yes or No: You own a small business. At a given point, your marginal revenue is slightly higher than your surgical cost. Would it be in your best interest to continue to produce

answer

Yes

question

True or False: Total variable cost (TVC) always increases when output increases.

answer

True

question

True or False: Marginal cost shows us the cost that are associated with producing one more unit of an output

answer

True

question

True or False: Marginal revenue is simply price times the quantity of output sold

answer

False

question

You own a small store that sells widgets. Your fixed costs are $1,000 and your variable cost are $500. If you decide to double your output, what is going to happen to your fixed costs.

answer

they will not change

question

_______ is the situation that occurs when a firm is earning exactly a normal rate of return

answer

...

question

True or False: At any given point time, all firms are either making an economic profit, suffering an economic loss, or breaking even

answer

True

question

For a firm that is losing money, if its revenue exceeds its ________, operating profit is positive and can be used to offset overhead and reduce losses, and it will pay for the firms to keep operating

answer

Variable costs

question

The lowest point on the average variable cost curve is also known as:

answer

the shut-down point

question

If a firm doubles its output and its cost per unit stays the same the firm is facing __________.

answer

Constant return to scale

question

True or False: Firms will continue to expand as long as there are economics of scale to be realized, and new firms will continue to enter as long as positive profits are being earned

answer

True

question

True or False: Overhead is another term used to refer to a company's variable cost

answer

False

question

True or False: If a firm can lower average cost per unit by increasing its scale of production, then the firm is facing increasing returns to scale

answer

True

question

True or False: It is always in the best interest of a firm that is losing money to go ahead and shut down in the short run

answer

True

question

On a given day, the class that you most look forward to is:

answer

Microeconomics (idk its on the paper)

question

Essay #1

What is a normal rate of return, and why do we factor that into total costs when looking at the profit formula

answer

Normal rate of return is the amount of money made from an investment. Used in order to find out if it will be smart to invest in the company, or risky.

question

Essay #2

A small firm is operating with fixed costs of $3,000 per month (including a normal rate or return), and variable costs of $1,800 per month. if the company falls on hard times and its total revenues fall to $2,000 a month, what would you advise the firm to do in that short run, and in the long run

answer

idk figure it out

1 of 52

question

________ demand in the output markets and supply in the input markets. Whereas _______ demand is the input markets and supply in the output markets.

answer

Households, Firms

question

When looking at a firm operating under Perfect Competition we assume that:

answer

No firm is large enough to have control over price and each firm is producing a homogenous product

question

Which of the following statements concerning total and marginal utility is correct?

answer

Total utility is the sum of marginal utility

question

True or False: Points beneath your budget constraint curve represent combinations of goods that you can't afford

answer

False

question

Every household must decide..

answer

-How much of each product, or output to demand
-How much labor to supply
-how much to spend today and how much to save for the future
D. All of the Above

question

________ says that the more of any one good consumer in a given period, the less satisfaction (utility) generated by consuming each additional (marginal) unit of the same good.

answer

The law of diminishing marginal utility

question

________ satisfaction gained by the consumption of all of the units of a particular good or service

answer

Totat Utility

question

True or False: When the price of something we regularly falls, we are worse off. When the price of something that we buy regularly rises, we are better off.

answer

False

question

True or False: When there is a wage increase and the income effect outweighs the substitution effect, you demand less leisure, and work more.

answer

False

question

True or False: Consumer surplus is the difference between the maximum amount a person is willing to pay for a good and its current price.

answer

True

question

True or False: When there is a wage increase and the substitution effect outweighs the income effect, you substitute is more free time and work less.

answer

True

question

True or False: All of the points on a single indifference curve represent the same amount of overall utilty

answer

True

question

True or False: An increase in income can create a whole new budget constraint

answer

True

question

True or False: The utility gained from consuming a good or service is the same for each consumer

answer

False

question

Most empirical evidence indicates that saving tends to fall as the interest rate rises

answer

False

question

Which of the following is NOT a decision that all firms must take?

answer

How much of each input to supply

question

_______ - total cost = profit

answer

Total Revenue

question

In the _______ firms are operating under a fixed scale (fixed factor) of production, and firms can neither enter or exit the industry

answer

Short run

question

The law of diminishing marginal returns states that when additional units of a ______ are added to _____ after a certain point, the marginal product of the variable input declines

answer

Variable input, fixed input

question

The ______ is the production method that minimizes cost

answer

Optimal method of production

question

______ is the additional output that can be produced by adding one more unit of a specific input ( ceteris paribus )

answer

Marginal product

question

If a product can be produced by using human labor, machines or a combination of both, a drastic decrease in the wage rate would likely lead to using more ____________

answer

Labor intensive technology

question

True or False: In the short run there are no fixed factors of production

answer

False

question

True or False: When figuring total economic cost we ignore the opportunity cost of capital (inputs), because they have been forgone.

answer

False

question

True or False: In the long run no firms can enter or exit the market

answer

False

question

True or False: Diminishing returns always apply in the short run, and in the short run every firm will face diminishing returns.

answer

True

question

True or False: A drastic increase in the minimum wage would likely lead to more businesses adopting labor-intensive production methods

answer

False

question

True or False: A positive profit level occurs when a firm is earning above-normal rate of returns on capital

answer

True

question

True or False: The demand curve facing a competitive firm is perfectly elastic. IF a single firm raises its prices above market price, it will sell nothing

answer

True

question

True or False: Capital-intensive technology is technology that relies heavily on machines and non-labor production methods

answer

True

question

_______ is a cost that depends on the level of production chosen.

answer

A variable cost

question

Total cost is:

answer

Fixed costs plus variable costs

question

I own a small lemonade stand at a local fairground, with a monthly fixed cost for having the booth. The process I would dive out this fixed cost to each cup of lemonade I sell is known as ________

answer

Spreading overhead

question

__________ is the increase in total cost that results from producing one more unit of output

answer

Marginal cost

question

The profit-maxmizing output for ALL firms is the output level where:

answer

MR = MC

question

Yes or No: You own a small business. At a given point, your marginal revenue is slightly higher than your surgical cost. Would it be in your best interest to continue to produce

answer

Yes

question

True or False: Total variable cost (TVC) always increases when output increases.

answer

True

question

True or False: Marginal cost shows us the cost that are associated with producing one more unit of an output

answer

True

question

True or False: Marginal revenue is simply price times the quantity of output sold

answer

False

question

You own a small store that sells widgets. Your fixed costs are $1,000 and your variable cost are $500. If you decide to double your output, what is going to happen to your fixed costs.

answer

they will not change

question

_______ is the situation that occurs when a firm is earning exactly a normal rate of return

answer

...

question

True or False: At any given point time, all firms are either making an economic profit, suffering an economic loss, or breaking even

answer

True

question

answer

Variable costs

question

The lowest point on the average variable cost curve is also known as:

answer

the shut-down point

question

If a firm doubles its output and its cost per unit stays the same the firm is facing __________.

answer

Constant return to scale

question

True or False: Firms will continue to expand as long as there are economics of scale to be realized, and new firms will continue to enter as long as positive profits are being earned

answer

True

question

True or False: Overhead is another term used to refer to a company's variable cost

answer

False

question

True or False: If a firm can lower average cost per unit by increasing its scale of production, then the firm is facing increasing returns to scale

answer

True

question

True or False: It is always in the best interest of a firm that is losing money to go ahead and shut down in the short run

answer

True

question

On a given day, the class that you most look forward to is:

answer

Microeconomics (idk its on the paper)

question

Essay #1

What is a normal rate of return, and why do we factor that into total costs when looking at the profit formula

answer

Normal rate of return is the amount of money made from an investment. Used in order to find out if it will be smart to invest in the company, or risky.

question

answer

idk figure it out

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Micro Exam #2 Sanders

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