Ben Schink

Refer to Table 17-13. If both stores follow a dominant strategy, HomeMax's annual profit will grow by

$1.5 million

Refer to Table 17-15. Which of the following outcomes represents a Nash equilibrium in the game

Middle-Right

Refer to Figure 15-4. A profit-maximizing monopoly's total revenue is equal to

P5 x Q3

Refer to Figure 16-2. Suppose that average total cost is $36 when Q=24. What is the profit maximizing price and resulting profits

P=$36, profit=0

Refer to Figure 16-1. Which of the graphs illustrates the demand curve most likely faced by a firm in a monopolistically competitive market

Panel C

Refer to Figure 13-3. Assuming that the firm depicted produces cookies, which of the statements below is most consistent with the shape of the total cost curve

Producing an additional cookie is always more costly than producing the previous cookie

Refer to Table 16-7. If the firm produces its profit-maximizing level of output and there is a constant marginal cost of $7 per unit, which of the following is correct

this firm is operating at its efficient scale

Katherine gives piano lessons for $15 per hour. She also grows flowers, which she arranges and sells at the local farmer's market. One day she spends 5 hours planting $50 worth of seeds in her garden. Once the seeds have grown into flowers, she can sell them for $150 at the farmer's market. Katherine's accounting profits are

$100 and her economic profit are $25

Refer to Scenario 15-6. How much profit will the concert promoters earn if they engage in price discrimination

$125,000

Refer to Table 17-11. ABC and XYZ agree to jointly maximize profits. If ABC and XYZ each break the agreement and each produce 5 more than agreed upon, how much less profit does each make, compared to the profit at to the cartel output

$20

Refer to Table 16-4. What price will this firm charge to maximize profit

$30

Refer to Figure 7-11. If the supply curve is S, the demand curve is D, and the equilibrium price is $100. What is the producer surplus

$625

Assume for Brazil that the opportunity cost of each cashew is 100 peanuts. Which of these pairs of points could be on Brazil's production possibilities frontier?

(200 cashews, 30,000 peanuts) and (150 cashews, 35,000 peanuts)

Which of the following statements is (are) true of a monopoly (i) a monopoly has the ability to set the price of its product at whatever level it desires (ii) a monopoly's total revenue will always increase when it increases the price of its product (iii) the more a monopoly increases output, the higher the profits

(i) only

Government policies designed to equalize the distribution of economic well-being include (i) the welfare system (ii) unemployment insurance (iii) progressive income tax

(i), (ii), and (iii)

Refer to Scenario 15-1. Which of the following is most likely to be true? (i) new entrants to the market know they will have a smaller market share than Reading's currently has (ii) Reading's is a natural monopoly (iii) Reading's is most likely experiencing increasing average total cost

(i), (ii), and (iii)

Refer to table 3-7. Which of the following combinations of meat and potatoes could the rancher not produce in 24 hours?

1 pound of meat and 3 pounds of potatoes

On a certain supply curve, one point is (quantity supplied = 200, price = $4.00) and another point is (quantity supplied = 250, price = $4.50). Using the midpoint method, the price elasticity of supply is about a. 0.22. b. 0.53. c. 1.00. d. 1.89.

1.89

Refer to Table 15-4. The monopolist will not produce

10 units or more under any circumstances

Refer to Figure 16-9. In order to maximize its profit, the firm will choose to produce

100 units of output and its profit will be positive

Refer to Table 13-7. What is the total output when 1 worker is hired

40

Refer to figure 2-1. Raymond buys a refrigerator for his new home. To which of the arrows does this transaction directly contribute

A and B

Suppose two companies own adjacent oil fields. Under the two fields is a common pool of oil worth $60 million. For each well that is drilled, the company that drills the well incurs a cost of $4 million. Each company can drill up to two wells. What is the likely outcome of the game if each company pursues its own self-interest

Each company drills two wells and experiences a profit of $22 million

Which of the following statements about the circular-flow diagram is correct

The diagram leaves out details that are not essential for understanding the economic transactions that occur between households and firms

Suppose when a monopolist produces 75 units its average revenue is $10 per unit, its marginal revenue is $5 per unit, its marginal cost is $6 per unit, and its average total cost is $5 per unit. What can we conclude about this monopolist?

The monopolist is not currently maximizing profits; it should produce fewer units and charge a higher price to maximize profits

Refer to Table 13-5. Assume that fixed costs are $500, and variable costs are $100 per worker. For this firm, what are the shapes of the production function and the total cost curve

The production function is increasing at a decreasing rate, whereas the total-cost function is increasing at an increasing rate

When constructing a production possibilities frontier, which of the following assumptions is not made

The quantities of the factors of production that are available are increasing over the relevant time period

Using the midpoint method, the price elasticity of demand for a good is computed to be approximately 2. Which of the following events is consistent with a 0.1 percent increase in the price of the good

The quantity of the good demanded decreases by 0.2 percent

Refer to Scenario 17-1. If Irun fails to live up to the production agreement and overproduces, which of the following statements will be true of Urun's condition

Urun will invariably be worse off than before the agreement was broken

Which of the following is not an example of a barrier to entry

a college student starts a part-time tutoring business

If toast and butter are complements, then which of the following would increase demand for toast

a decrease in price of butter

Which of the following observations would be consistent with the imposition of a binding price ceiling on a market? After the price ceiling becomes effective,

a smaller quantity of the good is bought and sold

If a competitive firm is currently producing a level of output at which marginal cost exceeds marginal revenue, then

all of the above are correct

In economics, capital refers to

buildings and machines used in the production process

The Get-There-Safe Bus company incurs an average cost of $45 for each passenger it carries on its trip from Atlanta to Chattanooga. In advance of a particular trip, four seats remain unsold. The bus company could increase its profit only if it

charged any ticket price above $0 for the four remaining seats

Which of the following is likely to have the most price inelastic demand

chocolate

Entry by new firms into a monopolistically competitive market

creates additional consumer surplus

If the government removes a binding price floor from a market, then the price paid by buyers will

decrease, and the quantity sold in the market will increase

Which of the following events must cause equilibrium price to fall

demand decreases and supply increases

Refer to Figure 14-14. If the market starts in equilibrium at point Z in panel (b), a decrease in demand will ultimately lead to

fewer firms in the market

Refer to Table 14-11. In order to maximize profits, the firm should stop producing after it makes the

fifth unit

Refer to Figure 16-2. Suppose ATC = $36 when Q = 24. Then the

firm is in a long-run equilibrium when it produces 24 units of output

The equilibrium quantity in markets characterized by oligopoly is

higher than in monopoly markets and lower than in perfectly competitive markets

Which of the following industries has the highest concentration ratio

household laundry equipment

If a competitive firm is selling 900 units of its product at a price of $10 per unit and earning a positive profit, then

its average total cost is less than $10

Which of the following is not a difference between monopolies and perfectly competitive markets

monopolies choose to produce the quantity at which marginal revenue equals marginal cost while perfectly competitive firms do not

Refer to Figure 15-1. The shape of the average total cost curve reveals information about the nature of the barrier to entry that might exist in a monopoly market. Which of the following monopoly types best coincides with the figure

natural monopoly

Refer to Figure 16-8. Panel (d) illustrates the change that would occur if existing firms faced

new entrants in the market

Advertising

provides information about products, including prices and seller locations

Refer to Table 14-9. If the firm's marginal cost is $11, it should

reduce production to increase profit

Consider a game of the "Jack and Jill" type in which a market is a duopoly and each firm decides to produce either a "high" quantity of output or a "low" quantity of output. If the two firms successfully reach and maintain the cooperative outcome of the game, then

the combined profit of the firms is maximized but total surplus is not maximized

You have driven 800 miles on a vacation and then you notice that you are only 15 miles from an attraction you hadn't known about, but would really like to see. In computing the opportunity cost of visiting this attraction you had not planned to visit, you should include

the cost of driving the next 15 miles but not the cost of driving the first 800 miles

Which of the following statements is not correct

the invisible hand can remedy all types of market failures

A monopolistically competitive firm chooses

the quantity of output to produce and the price at which it will sell its output

A university's football stadium is never more than half-full during football games. This indicates

the ticket price is above the equilibrium price