Microeconomics - Custom Scholars
Home » Flash Cards » Microeconomics

Microeconomics

question
Industrial Organization
answer
study of how firm's decisions about prices and quantities depend on market conditions they face
question
All you need to know about firm behavior is...
answer
Law of Supply
question
What are key determinants of production and pricing decisions?
answer
Costs
question
A firm's objective is commonly...
answer
to make money or maximize profit
question
Total Revenue
answer
the amount a firm receives for the sale of its output
question
Total Cost
answer
the market value of the inputs a firm uses in production
question
Profit
answer
Total revenue minus costs
question
Total Revenue =
answer
Quantity X Price
question
Opportunity Cost
answer
all things forgone to acquire that item
question
Explicit Costs
answer
input costs that require an outlay of money by the firm
question
Implicit Costs
answer
input costs that do not require an outlay of money by the firm
question
Distinction between ____ costs & ____ costs highlight important differences between how ____ & ____ analyze a business.
answer
explicit...implicit......economists...accountants
question
Economists decisions are based on...
answer
both implicit and explicit costs
question
Accountants decisions are based on...
answer
explicit costs
question
Economic Profit =
answer
Total Revenue - Total Cost
question
Accounting Profit =
answer
Total Revenue - Explicit Cost
question
Economic Profit
answer
total revenue minus total cost, including both explicit and implicit costs
question
Accounting Profit
answer
total revenue minus explicit cost
question
Economic Profit is ___ than accounting profit
answer
LESS
question
Production Function
answer
the relationship between quantity of inputs used to make a good and the quantity of output of that good
question
Marginal Product
answer
the increase in output that arises from an additional unit of input
question
Diminishing Marginal Product
answer
the property whereby the marginal product of an input declines as the quantity of the input increases
question
Productions slope (RISE OVER RUN) tells change in ____ (RISE) for each additional ____ of labor (RUN)
answer
output...input
question
Slope of production function measures the ___ of a worker
answer
Marginal Product
question
Total-Cost-Curve
answer
two columns of data with quantity produced on the horizontal axis and total cost on the vertical axis
question
Total cost is divided into...
answer
Fixed Cost & Variable Cost
question
Fixed Cost
answer
costs that do not vary with the quantity of output produced
question
Variable Costs
answer
costs that vary with the quantity of output produced
question
Firm's Total Cost =
answer
Fixed + Variable Costs
question
Cost of Unit =
answer
Firm's Costs / Quantity of Output Produced
question
Average Total Cost (ATC) =
answer
Average Fixed Cost + Average Variable Cost
question
Average Fixed Cost (AFC) =
answer
Fixed Cost / Quantity of Output Produced
question
Average Variable Cost (AVC) =
answer
Variable Cost / Quantity of Output Produced
question
Marginal Cost
answer
the increase in total cost that arises from an extra unit of production
question
Marginal Cost (MC) =
answer
Change in Total Cost / Change in Quantity
question
Cost Curves 3 Features
answer
1. Marginal cost rises with quantity of output
2. The average-total-cost curve is U-shaped
3. The marginal-cost curve crosses the average-total-cost curve at the minimum of average total cost
question
Efficient Scale
answer
the quantity of output that minimizes average total cost
question
The division of total costs between fixed & variable costs depends on the...
answer
time horizon
question
Cost of factories in short-run
answer
Fixed Cost
question
Cost of factories in long-run
answer
Variable Cost
question
Economies of Scale
answer
property whereby long-run average total costs falls as quantity of output increases
question
Dis-economies of Scale
answer
the property whereby long-run average total costs rises as quantity of output increases
question
Constant Returns to Scale
answer
the property whereby long-run average stays the same as quantity of output increases
question
Specialization
answer
permits each worker to become better at a specific task
question
Coordination Problems
answer
more stretched the management team becomes, less effective managers become which decrease productivity
question
Economists who argue that advertising enhances market efficiency suggest that celebrity advertising signals inferior product quality.
answer
True
question
The debate over whether advertising serves a valuable purpose in society is definitely answered by economists who study the tastes and preferences of individuals.
answer
False
question
Free entry eliminates long-run profits for firms in competitive and monopolistic industries
answer
True
question
Firms in monopolistically competitive markets and monopolies can earn long-run profits due barriers to reentry
answer
False
question
The profit that a monopolist earns represents a loss to society that is measured through deadweight loss
answer
False
question
A monopolist's supply curve is horizontal
answer
False
question
Variable costs usually change as the firm alters the quantity of output produced
answer
True
question
Firms operating in perfectly competitive markets produce an output level where marginal revenue equals marginal cost
answer
True
question
Average variable cost is equal to total variable cost divided by quantity of output
answer
True
question
At the profit-maximizing quantity of output for a monopolist, average revenue, marginal revenue, and price are all equal
answer
False
question
Variable costs equal fixed costs when nothing is produced
answer
False
question
Suppose a firm is considering producing zero units of output. We call this exiting an industry in the short run and shutting down in the long run
answer
False
question
Economists who argue that advertising enhances market efficiency suggest that celebrity advertising signals inferior product quality
answer
False
question
If the marginal cost of producing the tenth unit of output is $3, and if the average total cost of producing the tenth unit of output is $2, then at ten units of output, average total cost is rising
answer
True
question
A monopolist produces where P > MC = MR
answer
True
question
Policymakers have generally come to accept the view that advertising enhances the efficiency of markets
answer
True
question
When McDonald's opens a store in Dhaka, Bangladesh, it has a strong incentive to enforce product quality consistent with stores in the United States
answer
True
question
All firms maximize profits by producing an output level where marginal revenue equals marginal cost for firms operating in perfectly competitive industries, maximizing profits also means producing an output level where price equals marginal cost
answer
True
question
The marginal-cost curve intersects the average-total-cost curve at the output level where average fixed costs are zero
answer
False
question
A firm currently producing 100 units of output per day. The manager reports tot the owner that producing the 100th unit costs the firm $5. The firm can sell the 100th unit for $4.75. The firm should continue to produce 100 units in order to maximize its profits (or minimize its losses)
answer
False
question
Average total cost reveals how much total cost will change as the firm alters its level of production
answer
False
question
Like competitive firms, monopolies charge a price equal to marginal cost
answer
False
question
If the marginal cost of producing the tenth unit of output is $2.50, and if the average total cost of producing the tenth unit of output is $3, then at ten units of output, average total cost is rising
answer
False
question
During the life of a drug patent, the monopoly pharmaceutical firm maximizes profit by producing the quantity at which marginal revenue equals marginal cost
answer
True
question
Advertising during the Super Bowl is an example for information about quality contained primarily in the existence and expense of the advertising
answer
True
question
A monopolist produces where P = MC = MR
answer
False
question
If the marginal-cost curve is rising, then so is the average-total-cost curve
answer
False
question
The socially efficient quantity is found where the demand curve intersects the marginal cost curve
answer
True
question
Brand names are rarely used to convey information about product quality
answer
False
question
The government of Italy will not allow any Hard Rock Cafe restaurants to open in Italy. Defenders of the efficiency of brand-name markets would argue that this has hindered restaurant market efficiency in Italy
answer
True
question
Average total cost and marginal cost express information that is already contained in a firm's total cost
answer
True
question
A firm is currently producing 100 units of output per day. The manager reports to the owner that producing the 100th unit costs the firm $5. The firm can sell the unit for $6. The firm should produce more than 100 units in order to maximize its profits (or minimize its losses)
answer
True
question
A monopolist's supply curve is vertical
answer
False
question
In the short run, a firm should exit the industry if its marginal cost exceeds its marginal revenue
answer
False
question
The supply curve of a firm in a competitive market is the average variable cost curve above the minimum of marginal cost
answer
False
question
There is general disagreement among economists about the role of advertising but there is widespread agreement about the role of brand names on market economy
answer
False
question
The marginal-cost curve intersects the average-total-cost curve at the minimum point of the average-total-cost curve
answer
True
question
Assume Jack receives all As in his classes last semester. If Jack gets all Bs in his classes this semester, his GPA may or may not fall
answer
True
question
The Mikati Philippines Hard Rock Cafe has the exact same menu as the Hard Rock Cafe in New York. This is an example of a brand name enhancing market efficiency for U.S. tourists visiting the Philippines
answer
True
question
When a profit-maximizing firm in a competitive market experiences rising prices, it will respond with an increase in production
answer
True
question
Empirical evidence suggests that advertising usually leads to an increase in the price for advertised products
answer
False
question
The average-total-cost curve reflects the shape of both the average-fixed-cost and average-variable-cost curves
answer
True
question
The average-total-cost curve is unaffected by diminishing marginal product
answer
False
question
A monopolist's profit is equal to (Price Marginal Cost) ? Quantity
answer
False
question
Suppose a firm is considering producing zero units of output. We call this shutting down in the short run and exiting an industry in the long run
answer
True
question
The deadweight loss for a monopolist equals one-half of its profits for any given level of output
answer
False
question
A firm operating in a perfectly competitive industry will continue to operate in the short run but earn losses if the market price is less than that firms average variable cost but greater than the firms average fixed cost
answer
False
question
Deadweight loss measures the loss in society's welfare that occurs because a monopolist can earn profits without the concern of new firms entering its industry
answer
False
question
A firm operating in a perfectly competitive industry will continue to operate in the short run but earn losses if the market price is less than that firms average variable cost
answer
False
question
The cost of producing an additional unit of a good is not the same as the average cost of the good
answer
True
question
Deadweight loss measures the loss in society's welfare that occurs because a monopolist does not produce the socially efficient level of output
answer
True
question
A firm operating in a perfectly competitive industry will continue to operate in the short run but earn losses if the market price is less than that firms average total cost but greater than the firms average variable cost
answer
True
question
The government may not be able to improve the inefficiencies of a monopolistically competitive market
answer
True
question
If advertising decreases the elasticity of demand for specific brand names of hard liquor, we would expect firms to be able to charge a larger markup over marginal cost
answer
True
question
A monopolist does not have a supply curve because the firms decision about how much to supply is impossible to separate from the demand curve it faces
answer
True
question
Economists are unanimous in their belief that advertising is socially inefficient
answer
False
question
Like competitive firms, monopolies choose to produce a quantity in which marginal revenue equals marginal cost
answer
True
question
A firms is currently producing 100 units of output per day. The manager reports to the owner that producing the 100th unit costs the firm $5. The firm can sell the 100th unit for $5. The firm should continue to produce 100 units in order to maximize its profits (or minimize its losses)
answer
True
question
A firm operating in a perfectly competitive industry will shut down i n the short run but earn losses if the market price is less than that firms average variable cost
answer
True
question
The marginal-cost curve intersects the average-total-cost curve at the minimum point of the marginal-cost curve
answer
False
question
A firm will shut down in the short run if revenue is not sufficient to cover its variable costs of production
answer
True
1 of 106
question
Industrial Organization
answer
study of how firm's decisions about prices and quantities depend on market conditions they face
question
All you need to know about firm behavior is...
answer
Law of Supply
question
What are key determinants of production and pricing decisions?
answer
Costs
question
A firm's objective is commonly...
answer
to make money or maximize profit
question
Total Revenue
answer
the amount a firm receives for the sale of its output
question
Total Cost
answer
the market value of the inputs a firm uses in production
question
Profit
answer
Total revenue minus costs
question
Total Revenue =
answer
Quantity X Price
question
Opportunity Cost
answer
all things forgone to acquire that item
question
Explicit Costs
answer
input costs that require an outlay of money by the firm
question
Implicit Costs
answer
input costs that do not require an outlay of money by the firm
question
Distinction between ____ costs & ____ costs highlight important differences between how ____ & ____ analyze a business.
answer
explicit...implicit......economists...accountants
question
Economists decisions are based on...
answer
both implicit and explicit costs
question
Accountants decisions are based on...
answer
explicit costs
question
Economic Profit =
answer
Total Revenue - Total Cost
question
Accounting Profit =
answer
Total Revenue - Explicit Cost
question
Economic Profit
answer
total revenue minus total cost, including both explicit and implicit costs
question
Accounting Profit
answer
total revenue minus explicit cost
question
Economic Profit is ___ than accounting profit
answer
LESS
question
Production Function
answer
the relationship between quantity of inputs used to make a good and the quantity of output of that good
question
Marginal Product
answer
the increase in output that arises from an additional unit of input
question
Diminishing Marginal Product
answer
the property whereby the marginal product of an input declines as the quantity of the input increases
question
Productions slope (RISE OVER RUN) tells change in ____ (RISE) for each additional ____ of labor (RUN)
answer
output...input
question
Slope of production function measures the ___ of a worker
answer
Marginal Product
question
Total-Cost-Curve
answer
two columns of data with quantity produced on the horizontal axis and total cost on the vertical axis
question
Total cost is divided into...
answer
Fixed Cost & Variable Cost
question
Fixed Cost
answer
costs that do not vary with the quantity of output produced
question
Variable Costs
answer
costs that vary with the quantity of output produced
question
Firm's Total Cost =
answer
Fixed + Variable Costs
question
Cost of Unit =
answer
Firm's Costs / Quantity of Output Produced
question
Average Total Cost (ATC) =
answer
Average Fixed Cost + Average Variable Cost
question
Average Fixed Cost (AFC) =
answer
Fixed Cost / Quantity of Output Produced
question
Average Variable Cost (AVC) =
answer
Variable Cost / Quantity of Output Produced
question
Marginal Cost
answer
the increase in total cost that arises from an extra unit of production
question
Marginal Cost (MC) =
answer
Change in Total Cost / Change in Quantity
question
Cost Curves 3 Features
answer
1. Marginal cost rises with quantity of output
2. The average-total-cost curve is U-shaped
3. The marginal-cost curve crosses the average-total-cost curve at the minimum of average total cost
question
Efficient Scale
answer
the quantity of output that minimizes average total cost
question
The division of total costs between fixed & variable costs depends on the...
answer
time horizon
question
Cost of factories in short-run
answer
Fixed Cost
question
Cost of factories in long-run
answer
Variable Cost
question
Economies of Scale
answer
property whereby long-run average total costs falls as quantity of output increases
question
Dis-economies of Scale
answer
the property whereby long-run average total costs rises as quantity of output increases
question
Constant Returns to Scale
answer
the property whereby long-run average stays the same as quantity of output increases
question
Specialization
answer
permits each worker to become better at a specific task
question
Coordination Problems
answer
more stretched the management team becomes, less effective managers become which decrease productivity
question
Economists who argue that advertising enhances market efficiency suggest that celebrity advertising signals inferior product quality.
answer
True
question
The debate over whether advertising serves a valuable purpose in society is definitely answered by economists who study the tastes and preferences of individuals.
answer
False
question
Free entry eliminates long-run profits for firms in competitive and monopolistic industries
answer
True
question
Firms in monopolistically competitive markets and monopolies can earn long-run profits due barriers to reentry
answer
False
question
The profit that a monopolist earns represents a loss to society that is measured through deadweight loss
answer
False
question
A monopolist's supply curve is horizontal
answer
False
question
Variable costs usually change as the firm alters the quantity of output produced
answer
True
question
Firms operating in perfectly competitive markets produce an output level where marginal revenue equals marginal cost
answer
True
question
Average variable cost is equal to total variable cost divided by quantity of output
answer
True
question
At the profit-maximizing quantity of output for a monopolist, average revenue, marginal revenue, and price are all equal
answer
False
question
Variable costs equal fixed costs when nothing is produced
answer
False
question
Suppose a firm is considering producing zero units of output. We call this exiting an industry in the short run and shutting down in the long run
answer
False
question
Economists who argue that advertising enhances market efficiency suggest that celebrity advertising signals inferior product quality
answer
False
question
If the marginal cost of producing the tenth unit of output is $3, and if the average total cost of producing the tenth unit of output is $2, then at ten units of output, average total cost is rising
answer
True
question
A monopolist produces where P > MC = MR
answer
True
question
Policymakers have generally come to accept the view that advertising enhances the efficiency of markets
answer
True
question
When McDonald's opens a store in Dhaka, Bangladesh, it has a strong incentive to enforce product quality consistent with stores in the United States
answer
True
question
All firms maximize profits by producing an output level where marginal revenue equals marginal cost for firms operating in perfectly competitive industries, maximizing profits also means producing an output level where price equals marginal cost
answer
True
question
The marginal-cost curve intersects the average-total-cost curve at the output level where average fixed costs are zero
answer
False
question
A firm currently producing 100 units of output per day. The manager reports tot the owner that producing the 100th unit costs the firm $5. The firm can sell the 100th unit for $4.75. The firm should continue to produce 100 units in order to maximize its profits (or minimize its losses)
answer
False
question
Average total cost reveals how much total cost will change as the firm alters its level of production
answer
False
question
Like competitive firms, monopolies charge a price equal to marginal cost
answer
False
question
If the marginal cost of producing the tenth unit of output is $2.50, and if the average total cost of producing the tenth unit of output is $3, then at ten units of output, average total cost is rising
answer
False
question
During the life of a drug patent, the monopoly pharmaceutical firm maximizes profit by producing the quantity at which marginal revenue equals marginal cost
answer
True
question
Advertising during the Super Bowl is an example for information about quality contained primarily in the existence and expense of the advertising
answer
True
question
A monopolist produces where P = MC = MR
answer
False
question
If the marginal-cost curve is rising, then so is the average-total-cost curve
answer
False
question
The socially efficient quantity is found where the demand curve intersects the marginal cost curve
answer
True
question
Brand names are rarely used to convey information about product quality
answer
False
question
The government of Italy will not allow any Hard Rock Cafe restaurants to open in Italy. Defenders of the efficiency of brand-name markets would argue that this has hindered restaurant market efficiency in Italy
answer
True
question
Average total cost and marginal cost express information that is already contained in a firm's total cost
answer
True
question
A firm is currently producing 100 units of output per day. The manager reports to the owner that producing the 100th unit costs the firm $5. The firm can sell the unit for $6. The firm should produce more than 100 units in order to maximize its profits (or minimize its losses)
answer
True
question
A monopolist's supply curve is vertical
answer
False
question
In the short run, a firm should exit the industry if its marginal cost exceeds its marginal revenue
answer
False
question
The supply curve of a firm in a competitive market is the average variable cost curve above the minimum of marginal cost
answer
False
question
There is general disagreement among economists about the role of advertising but there is widespread agreement about the role of brand names on market economy
answer
False
question
The marginal-cost curve intersects the average-total-cost curve at the minimum point of the average-total-cost curve
answer
True
question
Assume Jack receives all As in his classes last semester. If Jack gets all Bs in his classes this semester, his GPA may or may not fall
answer
True
question
The Mikati Philippines Hard Rock Cafe has the exact same menu as the Hard Rock Cafe in New York. This is an example of a brand name enhancing market efficiency for U.S. tourists visiting the Philippines
answer
True
question
When a profit-maximizing firm in a competitive market experiences rising prices, it will respond with an increase in production
answer
True
question
Empirical evidence suggests that advertising usually leads to an increase in the price for advertised products
answer
False
question
The average-total-cost curve reflects the shape of both the average-fixed-cost and average-variable-cost curves
answer
True
question
The average-total-cost curve is unaffected by diminishing marginal product
answer
False
question
A monopolist's profit is equal to (Price Marginal Cost) ? Quantity
answer
False
question
Suppose a firm is considering producing zero units of output. We call this shutting down in the short run and exiting an industry in the long run
answer
True
question
The deadweight loss for a monopolist equals one-half of its profits for any given level of output
answer
False
question
A firm operating in a perfectly competitive industry will continue to operate in the short run but earn losses if the market price is less than that firms average variable cost but greater than the firms average fixed cost
answer
False
question
Deadweight loss measures the loss in society's welfare that occurs because a monopolist can earn profits without the concern of new firms entering its industry
answer
False
question
A firm operating in a perfectly competitive industry will continue to operate in the short run but earn losses if the market price is less than that firms average variable cost
answer
False
question
The cost of producing an additional unit of a good is not the same as the average cost of the good
answer
True
question
Deadweight loss measures the loss in society's welfare that occurs because a monopolist does not produce the socially efficient level of output
answer
True
question
A firm operating in a perfectly competitive industry will continue to operate in the short run but earn losses if the market price is less than that firms average total cost but greater than the firms average variable cost
answer
True
question
The government may not be able to improve the inefficiencies of a monopolistically competitive market
answer
True
question
If advertising decreases the elasticity of demand for specific brand names of hard liquor, we would expect firms to be able to charge a larger markup over marginal cost
answer
True
question
A monopolist does not have a supply curve because the firms decision about how much to supply is impossible to separate from the demand curve it faces
answer
True
question
Economists are unanimous in their belief that advertising is socially inefficient
answer
False
question
Like competitive firms, monopolies choose to produce a quantity in which marginal revenue equals marginal cost
answer
True
question
A firms is currently producing 100 units of output per day. The manager reports to the owner that producing the 100th unit costs the firm $5. The firm can sell the 100th unit for $5. The firm should continue to produce 100 units in order to maximize its profits (or minimize its losses)
answer
True
question
A firm operating in a perfectly competitive industry will shut down i n the short run but earn losses if the market price is less than that firms average variable cost
answer
True
question
The marginal-cost curve intersects the average-total-cost curve at the minimum point of the marginal-cost curve
answer
False
question
A firm will shut down in the short run if revenue is not sufficient to cover its variable costs of production
answer
True

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more
Live Chat+1(978) 822-0999EmailWhatsApp

Order your essay today and save 20% with the discount code BEGOOD

seoartvin escortizmir escortelazığ escortbacklink satışbacklink saleseskişehir oto kurtarıcıeskişehir oto kurtarıcıoto çekicibacklink satışbacklink satışıbacklink satışbacklink