ECON

refer to figure 22.3 for a perfectly competitive firm. this should shut down at any price below

$10

the marginal cost of the fourth unit of output in table 21.4 is

$20.00

what is the marginal cost of the 120th unit of output in Figure 21.2

$288.00

the marginal cost of the third unit of output in table 21.5 is

$3

the total cost of 3 units of output in Table 21.5 is

$30

at 10 units of output in Table 21.2, the total fixed cost is

$40

in figure 24.2, a profit maximizing monopolist will charge a price of

$5.50

the average variable cost of the second unit of output in Table 21.5 is

$6.00

at 4 units of output in table 21.4, the total variable cost is

$62.00

the average variable cost of the second unit of output in table 21.5 is

$8.00

refer to figure 19.1 the total consumer suplus in this market is equal to

$900

suppose that a firm has an annual budget of 200k in wages and salaries, 75k in materials, 30k in equipment, 20k in rented prop, 35k in capital. the firm earns 360k per ear. what is the economic profit

-90k

if the price of cell phones increases by 5% and the quanitity demanded falls by 2 percent, the absolute value of price elasticity of demand is

0.4

Suppose the quantity demanded of ski boats falls from 4.0 million to 3.0 million as a result of an average price increase from $20,000 to $25,000 per boat. The absolute value of the price elasticity of demand is closest to

1.29

in figure 24.2 , the profit maximizing monopolists will earn a profit per unit of

1.50

suppose the price of video games falls from 40 to 20 and as a result the quantity demanded of scooters falls from 40k to 10k per year. the value of the cross price elasticity of demand is

1.80

Refer to Figure 19.2. The total utility of two apples is

11 utils

In Table 19.3, what is the marginal utility of the fifth unit of cola

12

assume the price of cola is $8 per unit and the price of pretzels is $4 per unit. th marginal utility of the 5th cola is

12

the marginal physical product of the third unit of labor in figure 21.1 is

12 units per day

at 4 units of output in table 21.4, total fixed costs are

16

adam smith was alive during the ______, wrote_____, and his beliefs are generally associated with the _____ economic system

1700's, The wealth of nations, market capitalist

karl marx was alive during _______, wrote ____, and his beliefs are generally associated with the ____ economic systems

1800's, das kapital, command socialists

on the basis of your calculations in table 1.3, what is the opportunity cost of producing at point m rather than point n

2 brushes

at 20 units of output in Table 21.2, the average variable cost is

2.00 per unit

what is the marginal physical product of the fourth unit of labor in table 21.3

20

refer to the data in figure figure 22.1. the profit max output for this firm is approx.

200 units

if income falls 4 percent for a year and as a result the quantity of new homes demanded falls from 23 million to 20 million units

3.5

for product XYZ, the price elasticity of demand has an absolute value of 3.5. this means that quantitity demanded will increase by

3.5 percent for each 1 percent decrease in price

complete table 3.1. then answer the indicated question. Table 3.1 individual demand and supply, the equilibrium market quantity is

30

suppose thre are 3 firms in a market. 50 million and two firms have sells of 25 million find the Herfindahl hirschman index

3750

refer to figure 22.3 for a perfectly competitive firm. at a price of $23, total profits are max at an output of

39

the marginal utility per dollar for the third pretzel

4

in figure 24.2, the profit maximizing level of output is

4 units

refer to table 25.2 assume there re only 4 firms in the pool sweeper industry. what is the herfindahl-hirschman index for this industry?

4150

In the $160 to $180 price range in figure 20.1, the absolute value of the price elasticity of demand is closest to

5.7

refer to table 25.2. assume there are only four firms in he pool sweeper industry. what is the market share for north star

50 percent

refer to table 25.2. assume there are only four firms in the pool sweeper industry. what is the market share for the N star

50 percent

the marginal utility of the third unit is

6

refer to figure 19.2 total utility is maximized at

6 apples

If the price of the iPod falls by 3 percent and the price elasticity of demand for Ipods is 2.0

6 percent

suppose computer prices at an office supply store fall from 1000 to 900 and as a result the quantity demanded of type writers decrease from 40 to 20 per month. the cross price elasticity of demand is closest to

6.3

on the basis of your calculations in table 3.1, what is gained at producing at point L rather than point k

7 brushes

In Table 19.3, what is the total utility of two units of cola?

72

what is the total fixed cost in Figure 21.2

9,600

how many units of output can be produced when three units of labor are employed in Table 21.3

96

If bagels and doughnuts are substitutes, then a decrease in the price of doughnuts will result in

A decrease in the demand for bagels

refer to figure 1.7, the benefit of producing at point G rather than point D is

AB units of food

in figure 21.4 the long run average total cost curve is given by the curved line

ABFDGE

the marginal cost curve intersects the mnimum of the curve representing

ATC

in figure 24.1 total cost is represented by the area

CDFE

in figure 1.6, at which of the following points would the opportunity cost of producing one more car be the lowest

F

If the cross-price elasticity of demand for SUVs with respect to the price of gasoline is -.10

Fall by 1.8 percent

ceteris paribus, if income increase and as a result, the demand for good X increases and the demand for good Y falls

Good X is a normal good and good Y is an inferior good

Assume amanda always maximizes her total utility given her budget constraint.

It must be equal to 20 utils

refer to figure 21.3. the veritical differnce between the total cost curve and the total fixed cost curve represents

Total variable cost

Refer to Figure 21.3. The vertical difference between the total cost curve and the total fixed cost curve represents

Total variable costs

refer to figure 23.4 for a perfectly competitive market and firm. which of the following is likely to occur in the market in the long run

a decrease in supply

ceteris paribus, if the price of a digital camera rises, then we can expect

a decrease in the quantity demanded of digital cameras

which of the following is likely to be a monopolist

a drug firm that has a patent granting it the exclusive right to produce a drug

diminishing returns occurs because

a firm increases the amount of a variable input without changing a fixed input

the term market power refers to

a firms ability to alter the market price or quantity of a good or service

if demand is elastic then

a increase in price will reduce total revenue

which of the following is characteristic of a perfectly competitive market

a large number of firms

in a competitive market where firms are earning economic profits, which of the following should be expected as the industry moves to long run equilibrium

a lower price and more firms

which of the following is a barrier to entry in a monopoly market

a patent on a new product

the long run is

a period long enough for all inputs to be variables

a cartel is

a public agreement between firms or countries to restrict productions and raise prices

the production decision involves choosing

a rate of output and is a short run decision

when the demand for coffee increases, ceteris paribus, the equilibrium price will also increase because

a shortage exists at the old equilibrium price

in figure 21.4, the long run average total cost curve is given by the curved line segment

abfdge

adam weed is the owner/operator of a flower shop. last year he earned 250,000 in total revenue. his explicit were 175,000, 75,000. accounting and economic profit?

accounting proft=75,000 economic profit=0

to calculate market supple, we

add the quantities supplied for each individual supply schedule horizontally

if economic profits are earned in a competitive market, then over time

additional firms will enter the market

which of the following would most likely have a price elasticity coefficient greater than 1

airline travel in the long run

in terms of production possibilities curve, inefficiency is represented by

all points inside the curve

using figure 1.6, if an economy has the capacity to produce represented by PP1, then point E represents

an efficient use of resources

ceteris paribus, which of the following most likely to cause a decrease in the supply of skateboards

an increase in the cost of materials to produce the skateboards

externalities

are the costs or benefits of market activities activities that spill over onto third parties

in a market economy the people who receive the goods and services produced are those who

are willing and able to pay the market price

the law of diminishing marginal utility states that

as a consumer enjoys successive units of a good, eventually marginal utility will fall

on a demand curve, demand is more elastic

at higher prices

in figure 21.4 a firm that produces over 800 units of output should choose a plant with which short run average total cost function

atc 3 only

In figure 21.4, a firm that produces between 600 and 800 units per period should choose a plnt with a short fun average total cost function of

atc2 only

if the price of Coke rises by 5 percent and the sales of Pepsi go up by 10 percent, we can conclude that

both goods are substitute goods because the cross-price elasticity is +2

a monopolistic competitive fim can raise its price somewhat without fear of great change in unit sales because of

brand loyalty

the role of an entrepreneur in an economy is to

bring the factors of production together and assume the risk of production

refer to figure 23.2 for a perfectly competitive firm. the firm will max profit by producing the level of output that corresponds to point

c

refer to figure 23.2 for a perfectly competitive firm. this firm will max profits by producing the level of output that corresponds to point

c

refer to figure 1.7. if this economy is currently producing at point F, then by employing more resources this economy

can move to points D,G, or J

which of the following is most likely a private good

cars

in figure 24.2, total profit at the profit max rate of output is

cdhg

a monopoly

charges higher prices than competitive firms

before it political collapse, the former soviet union aspired to have an

command socialist economy

the marginal revenue of a monopolists falls below price because the firm

confront a downward sloping demand curve

the marginal revenue of a monopolist falls below price because the firm

confronts a downward sloping demand curve

the benefit that consumers get when they buy goods at the equilibrium price but were willing to pay more is called

consumer surplus

in a market economy, producers the goods and services that

consumers demand

high profits in a particular industry indicate that

consumers want more of that industry's goods

when economic profits exist in the market for a particular product, this is a signal to producers that

consumers would like more scarce resources devoted to the production of this product

in making a production decision, an entrepreneur

decides what level of output will maximizes profits

the average fixed cost (AFC) curve

declines as long as output increases

assume the price elasticity of demand for a us frisbee is .5. if the company increases the price of each frisbee from 12-16, the number of frisbees demanded will

decrease by 14.3 percent

in a competitive market, if the market price is equal to the min point of the firms atc curve, the firm may seek to earn economic profit by

decreasing production costs through technological improvements

in a competitive market, if the market price is equal to the minimum point of the firms atc curve, the firm may seek to earn economic profits by

decreasing production costs through technological improvements

if corn products are found to cause cancer, the the

demand curve for corn will shift left

when the percentage change in quantity demanded is less than the percentage change in price, ceteris paribus

demand is inelastic

when technology improves, the firms marginal cost curve shifts

downward, and supply increases

accounting cost and economic costs differ because

economic costs include the opporunity costs of all resources used, while accounting costs include the actual dollar outlays

refer to figure 22.3 for a perfectly competitive firm. if the market price is $15,

economic profits will be 0

refer to figure 22.3 for a perfectly competitive firm. if the market price is $15

economic profits will be zero

refer to figure 23.2 for a perfectly competitive firm. given the current market price of 100. we expect to see

entry into this industry

which of the following is an investment decision in a competitive market

entry or exit

the demand curve confronting a competitive firm

equals the marginal revenue curve

if long run economic loses are being experienced in a competitive market

equilibrium price will rise as firms exit

complete table 3.1, if the price is $2, the market will

experience a shortage of 22 units

if the opportunity cost of manufacturing machinery is higher in the united states than in britain and the opportunity cost of manufacturing sweaters is lower in the united states than in britain, then the united states will

export sweaters to britain and import machinery from britain

a monopolist has market power because it

faces a downward sloping demand curve for its own output

if the cross price elasticity of demand for SUV'S with the respect to the price of gasoline is .10 and gas prices rise by 18%

fall by 1.8 percent

suppose the income elasticity of demand for jet skis is 3.5. if the level of income decreases by 1%, the number of jet skis sold will

fall by 3.5 percent

sams surf shop has total costs of 2000 when it is not producing any surfboards. this means that

fixed costs are 2000

a ushaped average total cost curve implies

fixed marginal cost below average total cost, and then marginal cost above the average total cost

Refer to Table 19.3. If Michael has $48 to spend on cola and pretzels, what combination should he purchase in order to maximize his utility.

four colas and four pretzels

complete table 19.3 below. assume the price of cola is $8 per unit and the price of pretzels is $4 per unit. if micheal has $48 to spend on cola and pretzels

four colas and four pretzels

which of the following is most likely an inferior good

generic canned food

which is most likely an inferior good

generic canned foods

when an economy is producing efficiently, it is

getting the maximum goods and services possible from the available resources

if a firm can change market prices by altering its output, then it

has market power

when a producer can control the market price for the good it sells, the producer

has market power

price leadership

helps achieve monopoly for the market

the demand curve for each competitively firm is

horizontal

the demand curve for each perfectly competitive firm is

horizontal

a production function shows

how a firm's production changes as quantity of labor and other inputs change

price elasticity looks at

how much quantity demanded changes after a change in price

elasticity of supply tells us

how much sellers will increase production in response to a change in price

cross price elasticity refers to

how responsive consumers of one good are to a change in the price of another good

which of the following statements best captures the concept of consumer surplus

i was willing to pay $30 for roses, but i bought them for $20

which of the following is characteristic of a perfectly competitive market

identical products

according to the law of increasing opportunity costs

in order to produce additional units of a particular good, it is necessary for society to sacrifice increasingly larger amounts of alternative goods

price leadership is a method by which oligopolies can

increase prices without explicit price fixing

the exit of firms from a market

increase the equilibrium price in the market

If Carmen's Coffee Company wants to increase total revenue and the price elasticity of demand is 0.43, the company should

increase the price of its coffee

when income falls the demand for an inferior good

increases

as more satisfaction is achieved from consuming a good with diminishing marginal utility then total utility

increases at a decreasing rate

Assume a good has a downward sloping, linear demand curve. Starting at a price of zero, as the price of the good increases, total revenue

increases, then decreases

the federal govenments role in providing aid to the poor and the aged is justified because of concerns about

inequity

the decision to start or expand a business is known as

investment decision

profit

is the difference between total revenue and total cost

the marginal cost curve

is the short run supply curve for a competitive firm at prices above the avc curve

assume amanda always maximizes her total utility given her budget constraint. every morning for breakfast she has 2 eggs and 3 sausages. if the marginal utility of the last 10 eggs is 10 utils and the price of eggs is $1 each, what can we say about the MU of the last sausage if the price of each sausage if the price of each is $2

it must be equal to 20 utils

in the short run, which of the following is most likely a variable cost

labor and raw materials

the additional pleasure or satisfaction from a good declines as more of it is consumed in a given period

law of diminishing marginal utility

the shape of the marginal cost curve reflects the

law of diminishing returns

market failure implies that market mechanism

leads the economy to the wrong mix of output

which of the following characterizes monopolistic competition

many firms produce a particular type of product , but each maintains some independent control over its own price

the average total cost curve will be negatively sloped so long as

marginal cost is less than average total cost

if the marginal physical product (MPP) is falling, then the

marginal cost of each unit of output is rising

if the marginal physical product is falling then the

marginal cost of each unit of output is rising

ceteris paribus, the law of diminishing returns states that beyond some point, the

marginal physical product of a factor of production diminishes as more of that factor is used

short run profits are maximized at the rate of output where

marginal revenue is equal to marginal cost

total utility is maximized when

marginal utility = 0

maximum utility is achieved when

marginal utility is zero

social demand is equal to

market demand plus or minus externalities

people benefit by participating in the market because

market participation allows individuals to specialize and, with trade, ultimately consume more

a production function shows the

max output that can be produced with varying combinations of factor inputs

which of the following products will have more inelastic demand

medicine

which of the following market structures will have higher prices in the long run than perfect competition

monopolistic competition, monopoly, and oligopoly

in which of the following types of market does a single firm have the most market power

monopoly

which of the following events would allow the production possibilities curve to shift outward

more teenagers enter the labor force

a profit maximizing monopolist will earn a rate of output where

mr=mc and determines the price based on the demand curve

which of the following is purchased in a factor market

national defense

mp3 players and mp3 files are complimentary goods. the cross price elasticity of demand between mp3 players and mp3 files is expected to be

negative

which determinant of demand changes in the personal computer market as more individuals become interested in surfing the internet

number of buyers

which market structure is characterized by a few interdependent firms

oligopoly

the concentration ratio for an oligopoly is

over 60 percent

a firm should shut down production when

p<minimum avc

in which of the following cases would entry and exit cease

p=long run atc

if a firm decided to make the investment decision to expand its capacity then it must have discovered

p>atc

a perfectly competitive firm should expand output when

p>mc

examples of barriers to entry include

patents

which of the dollowing characterizes a firm that is in long run perfectly competitive equilibrium where profits are maximized

price equals minimum ATC

a catfish farmer will shutdown production when

price falls below avc

a perfectly competitive market results in efficiency because

price is driven down to the minimum atc

a ballet performance had empty seats. this implies that the

price of the tickets must have been above the equilibrium price

a kinked demand curve indicates that rival oligopolists match all

price reductions

an economy is said to have a comparative advantage in the production of a good if it can

produce the good at a lower opportunity cost than another economy

a monopoly

produces less output than a competitive industry

when a business firm advertises that its product has unique features that make it superior to other similar products, is is engaging in

product differentiation

oligopolists have a mutual interest in coordinating production decisions in order to max joint

profits

economists assume the principle motivation of producers is

proft

govenments usually build highways because it is difficult to exclude individuals who don't pay for the highways from using them. what type of market failure involved

public goods

which of the following explains what would happen if public goods were marketed like private goods

public goods would be underproduced

the four specific sources of market failure are

public goods, market power, externalities, and inequity

If dvd players and dvds are complementary goods, an increase in the price of dvds will, ceteris paribus

reduce the demand for dvd players

the entry of firms into a market

reduces the profit of existing firms in the market

the entry of firms into a market

reduces the profits of existing firms in the market

price elasticity of demand shows how

responsive the quantity demanded is to a change in price

the demand for normal goods

rises when income falls

utility refers to the

satisfaction obtained from a good or service

car dealers can easily price discriminate because

sellers negotiate a separate price agreement with each individual buyer

other things being equal, as more firms enter a market, the market supply curve

shifts to the right

suppose a hurricane hits florida, causing widespread damage to houses and businesses. the governor of florida place ceilings on all building materials to keep the prices reasonable. which of the following is most likely the result

shortages of building materials and a slower recovery from the storm

The marginal physical product of labor in Figure 21.1 is negative for the

sixth worker

in economics, scarcity means that

society's exceed resources available

to determine the market supply the quanitities

supplied at each price by each supplier are added together

economic loses are signals to producers

that they are not using resources in the best way

which of the following is not a factor of production

the 100,000 cash

the opportunity cost for studying for an economic test is

the activity that is best alternative use of your time

the total consumer surplus is shown on a graph as

the area under the demand curve and above the actual price

consumer surplus measures

the difference bt the max price a consumer is willing to pay, and what is actually paid

which of the following is an example of progressive tax

the federal income tax

refer to figure 22.3 for a perfectly competitive firm. which of the following statements is true for this firm between prices 10 and 15

the firm is experiencing economic loses but should continue to produce

refer to figure 23.4, for a perfectly competitive market and firm. which of the following is most likely to occur?

the firm will exit in the long run

Refer to Figure 19.2. Diminishing marginal utility begins after

the first apple

which of the following produces externals benefits

the inoculation of college students against the flu

Jose goes to an all you can eat buffet at a Chinese restaurant

the marginal utility of the fourth plate would be zero or even negative

if someone invents a better way to produce frozen pizza then

the market supply curve for frozen pizza will shift to the right

refer to figure 23.2 for a perfectly competitive firm. if this firm produces the level of output corresponding to point c in the shortrun will earn

the max profit possible

if the demand for a product is elastic, then

the percentage change in the quantity demanded is greater than the percentage in price

a perfectly competitive firm is a price taker because

the price of the product is determined by many buyers and sellers

which of the following is most likely a fixed cost

the rent for a factory

total utility is

the sum of the marginal utilities from the consumption of a good

the principle mechanism for redistributing income is

the tax and transfer system

which unit of labor do diminishing marginal return first appear in table 21.1

the third

the term market mechanism refers to:

the use of market prices and sales to determine resource allocation

monopolistic competition results in

the wrong mix of output

if the actual market price were fixed at $6 per unit in figure 3.2,

there would be a shortage of 20 units

if the actual market price were fixed at $15 per unit in figure 3.2

there would be a surplus of 40 units

when sellers price discriminate

they are attempting to charge a price that is the max price each individual is willing to pay

when sellers price discriminate

they are attempting to charge a price that is the maximum price each individual is willing to pay

in figure 21.1, diminishing marginal returns first occur with the

third worker

if the price is reduced from 100 to 80 in figure 20.1

total revenue will decrease

if marginal utility is negative

total utility will decrease with additional consumption

if marginal utility is negative, then

total utility will decrease with additional consumption

which of the following is the best example of a government effort to address market failure in relation to the for whom question

transfer payments

a demand curve that is perfectly inelastic is

vertical

which of the following a production decision

whether to increase or decrease output

in a perfectly competitive industry, economic profit

will approach zero in the long run as prices are driven to the level of average production costs

which of the following is characteristic of a perfectly competitive market

zero economic profit in the long run