econ exam 3
Suppose a firm produces 20 units of output. At this level of output, ATC = 35, P = 50, MR = 30, and MC = 30. The firm's economic profit is:
$300
Based on the table, what must be TRUE about the labor supply curve as the wage rate rises from $20 to $30 per hour?
As the wage rate rises, more hours of leisure are consumed.
According to the table, the firm should hire ____ workers.
8
Which act established an independent regulatory body?
Federal Trade Commission Act
Which statement(s) is true? I. José has been told that, since the job he has just started is part of a union shop, he has thirty days to join the union. II. Agatha has learned that because her workplace is a clo sed shop she must pay union dues even though she is not a member of the union. III. Michelle found out that she could not get a job at the local factory since it is a closed shop and she is not a member of the union
I and III only
Which statement is NOT true in determining the equilibrium price and quantity for a monopolist?
Monopolists select the price that is equal to the average total cost.
how do you find total revenue?
Price x Quantity
Which stipulation is the main feature of the Americans with Disabilities Act?
The Act prohibits discrimination against people with a physical or mental disability who could perform a job with reasonable accommodation.
Which of these is NOT one of the potential benefits of labor unions?
Unions may reduce a company's profits.
Which factor will NOT shift the labor supply curve to the left?
a new miracle drug that increases longevity
Which of these is the BEST example of a natural monopoly?
an electric utility company
All of these would cause a rightward shift in the labor demand curve EXCEPT
an increase in the use of capital
The main difference between marginal revenue product (MRP) and the value of marginal product (VMP) is that VMP:
applies to firms selling in competitive markets, while MRP applies to firms selling in all markets.
A monopolistic competitor is like a perfectly competitive firm in the long run because:
both firms will earn a normal profit
A monopolist sells 2,000 units for $20 each. The total cost of 2,000 units is $30,000. If the price falls to $19, the number of units sold increases to 2,100. The total cost of 2,100 units is $30,075. When the monopolist moves from a price of $20 to $19, the marginal revenue will
decrease
monopolistically competitive markets and perfectly competitive markets do NOT share which characteristic?
differentiated products
Blocked entry exists under monopolistic competition.
false
If wage discrimination against women exists within some firms, Becker proposes that women who are not discriminated against will be paid higher wages
false
In the short run, when labor is the only variable factor of production, the elasticity of demand for labor tends to be more elastic.
false
Interdependence is a key attribute of firms in monopolistic competition.
false
Pure competition and pure monopolies are very prevalent in the economy
false
An increase in the demand for a firm's product will increase the:
firm's demand for labor but not the value of the marginal product.
Which of these is NOT a characteristic of a competitive labor market?
firms are price makers
what are the two types of advertising?
informational and persuasive
A deadweight loss:
is the same as welfare loss.
If an oligopolistic firm believes that its competitors would match a price decrease, but not match a price increase, its demand curve is:
kinked, being steeper below the current price
Which of these is NOT an example of a natural monopoly?
local newspaper
Ticketmaster has an exclusive right to sell tickets to certain events, which is an example of:
market power
A firm that is the only seller of a good with no close substitutes is a(n):
monopolist
A market situation in which large numbers of firms produce similar but not identical products is:
monopolistic competition
Large cities typically have many grocery stores and most sell similar products of various brands and quality. The grocery store market in a big city can be BEST classified as:
monopolistic competition
A one-firm industry with no close product substitutes and substantial barriers to entry is called a(n)
monopoly
A(n) _____ market is a market in which just a few firms control a large market share.
oligopoly
Which of these is NOT an example of product differentiation?
price discrimination
What is NOT a method of regulating a natural monopoly?
selling pieces of a company to different owners to spur competition
Which of these is NOT a government -imposed restriction that could keep potential entrants out of a market?
subsidizing imported goods
The marginal physical product of labor is:
the change in output a firm receives from hiring an additional worker.
The idea that the demand for labor is a derived demand means that:
the demand for labor depends on the demand fo r the product the labor produces
Assume that a monopolistically competitive firm faces the following situation: P = $14, output = 9,000 units, MC = $11, ATC = $16, AVC = $7, and MR = $11. Which statement is correct regarding profit maximization?
the firm is minimizing its losses
For both the monopolist and the perfectly competitive firm:
the profit-maximizing output occurs where MR = MC
Which piece of legislation ended "closed shops" in the American workplace?
the taft-hartley act
Which theory of economic discrimination was proposed by the influential economist Gary Becker?
the theory of discriminatory tastes
Which characteristic is NOT typical of a monopoly?
there is low demand for the product
Which repeated game strategy does the MOST to reward cooperation and punish defection while producing the greatest efficiency?
tit-for-tat strategy
A cartel will maximize its profits as long as it limits industry output to the level found where the MR and MC curves intersect.
true
A dominant strategy occurs when one player chooses the same action regardless of what the other player chooses.
true
A large increase in the value of the stock market will shift the labor supply curve to the left
true
A noncooperative game includes players who neither negotiate nor cooperate in any way
true
Buyers cannot easily substitute other products for those sold by a monopolist.
true
Gary Becker believes that firms that do not discriminate will attract the best employees and earn higher profits than firms that do discriminate.
true
If labor's share of the total cost is small, then the demand for labor tends to be rather elastic
true
In a Prisoner's Dilemma, the players each select the strategy that will produce the best outcome for them personally
true
One of the practical implications of the existence of the Nash equilibrium is that game theory can be fruitfully used to analyze real-world economic problems
true
The kinked demand curve explains pricing strategy in oligopolistic markets.
true
A(n) _____ shop is a workplace in which workers do not have to be union members to be hired but must join the union within thirty days
union
The game theory table for Barbara and Helen (with Barbara's profits in regular text and Helen's profits in italics) indicates that:
Both Barbara and Helen have dominant strategies to earn profits.
Papabear Corporation is a single seller of Wonderstuff, but there are two substitutes for Wonderstuff. Given this situation, Papabear:
cannot be a monopoly because there are substitutes for Wonderstuff
how do you find marginal cost?
change in total cost / change in quantity
how do you find marginal revenue?
change in total revenue / change in quantity