Econ Final

Suppose a firm in each of the two markets listed below were to increase its price by 25 percent. In which pair would the firm in the first market listed experience a dramatic decline in sales, but the firm in the second market listed might not?

Corn and Satellite radio

The intersection of a firm's marginal revenue and marginal cost curves determines the level of output at which

profit is maximized.

Kate is a florist. Kate can arrange 20 bouquets per day. She is considering hiring her husband William to work for her. Together Kate and William can arrange 35 bouquets per day. What is William's marginal product?

15 bouquets

Assume the Wooden Chair Factory currently employs 5 workers. What is the marginal product of labor when the factory adds a 6th worker?

15 chairs per hour

Suppose a certain film is able to produce 165 units of output per day when 15 workers are hired. the firm is able to produce 181 units of output per day when 16 workers are hired, holding other inputs fixed. The marginal product of the 16th worker is

16 units of output

When the firm produces 150 units of output, its profit is

2,325.00

If the market price is $10, what is the firm's short-run economic profit?

$15

Kelly has decided to start his own business giving sailing lessons. To purchase equipment for the business, Kelly withdrew $1,000 from his savings account, which was earning 3% interest, and borrowed an additional $2,000 from the bank at an interest rate of 7%. What is Kelly's annual opportunity cost of the financial capital that has been invested in the business?

$170

Cindy's Car Wash has average variable costs of $2 and average fixed costs of $3 when it produces 100 units of output (car washes). The firm's total cost is

$500

Carol Anne makes candles. If she charges 20 dollars for each candle, her total revenue will be

$500 if she sells 25 candles

The demand curve for monopoly firm is depicted by curve

B

A profit-maximizing monopoly's total revenue is equal to

P5 × Q3.

the diagram depicts the market situation for a monopoly pastry shop called Bearclaws. given that Bearclaws chooses the profit maximizing price and quantity, what profit level will it obtain?

$280

Marcus sells 300 candy bars at $0.50 each. His total costs are $125. His profits are

$25

how does the circular flow diagram work

how money and resources flow through our economy

Total revenue equals

price × quantity.

Based upon the information shown what price will bearclaws charge to maximize profits?

14.00

Monopolies are socially efficient because the price they charge is

above the marginal cost

The fundamental source of monopoly power is

barriers to entry

At levels of output less than M, the firm experiences

economies of scale

price discrimination is the business practice of

selling the same good at different prices to different customers

what is macroeconomics

the study of economy wide phenomena

A benefit to society of the patent and copyright laws is that those laws

encourage creative actvity

A monopoly can earn positive profits because it

can maintain a price such that total revenues will exceed total costs

If the market price is $10, the firm will earn

negative economic profits in the short run but remain in business.

A key characteristic of a competitive market is that

producers sell nearly identical products.

The deadweight loss associated with a monopoly occurs because the monopolist

produces an output level less than the socially optimal level.

The accountants hired by Forever Fitness have determined total fixed cost to be $75,000, total variable cost to be $130,000, and total revenue to be $125,000. Because of this information, in the short run, Forever Fitness should

shut down becuase staying open would be more expensive

what is microeconomics?

the study of how households amd firms make decisions and how they interact in markets

What is the area of deadweight loss?

the triangle 1/2[(A-C)*(Y-X)]

What is the monopoly price and quantity?

where mr=mc you go up to the demand and price is to the left and quantity is right down. Price=A quantity= x

If the market price is $13, the firm will earn

zero economic profits in the short run

Billy's Bean Bag Emporium produced 300 bean bag chairs but sold only 275 of the units it produced. The average cost of production for each unit of output produced was $100. The price for each of the 275 units sold was $95. Total profit for Billy's Bean Bag Emporium would be

−$3,875.

Monopolies are socially efficient because the price they charge is

above marginal cost

what is Bowed outward production possibilities frontier

the law of increasing opportunity costs, you give up more

The short-run supply curve for a firm in a perfectly competitive market is

the portion of its marginal cost curve that lies above its average variable cost.

Which of the following is an example of public ownership of a monopoly?

US Postal Service

Price discrimination adds to social welfare in the form of

increased total surplus

If the market price is $6, what is the firm's short-run economic profit?

$0

Vincent operates a scenic tour business in Boston. He has one bus that can fit 50 people per tour and each tour lasts 2 hours. His total cost of operating one tour is fixed at $450. Vincent's cost is not reduced if he runs a tour with a partially full bus. While his cost is the same for all tours, Vincent charges each passenger his/her willingness to pay: adults $18 per trip, children $10 per trip, and senior citizens $12 per trip. At those rates, on a typical day Vincent's demand is: ​Passenger Type Willingness to Pay (Dollars per unit) Quantity Demanded (Units)Adult 1870 Children 1025 Senior Citizens 1255 ​Assume that Vincent's customers are always available for the tour; therefore, he can fill his bus for each tour as long as there is sufficient total demand for the day.​Refer to Scenario 15-2. What is Vincent's profit on a typical day?

$820

Based upon the information shown, what is total revenue for Bearclaws, given that it maximizes profits?

$980

What area measures the monopolist's profit?

(K-B)*W

When market price is P7, a profit-maximizing firm's short-run profits can be represented by the area

(P7-P5)XQ3

Based upon the information shown how many units will bearclaws produce to maximize profits

70, this is where mr=mc and down

Which of the following statements is correct?

Assuming that implicit costs are positive, accounting profit is greater than economic profit.

Over which range of output is average revenue equal to price?

Average revenue is equal to price over the entire range of output

What is the socially efficient price and quantity for this natural monopolist?

H and l

What is the socially efficient price and quantity?

Price = B; quantity = Y

Which of the following is an example of an implicit cost?

The owner of a firm forgoing an opportunity to earn a large salary working for a Wall Street brokerage firm

Bob's Butcher Shop is the only place within 100 miles that sells bison burgers. Assuming that Bob is a monopolist and maximizing his profit, which of the following statements is true?

The price of Bob's bison burgers will exceed Bob's marginal cost.

The efficient scale of production occurs at which quantity

at the minimum ATC (c)

Average total cost is very high when a small amount of output is produced because

average fixed cost is high

marginal cost is equal to average total cost when

average total cost is at its minimum

When marginal cost is less than average total cost,

average total cost is falling

A difference between explicit and implicit costs is that

implicit costs do not require a direct monetary outlay by the firm, whereas explicit costs do.

Firms may experience diseconomies of scale when

large management structures are bureaucratic and inefficient

one problem with government operation of monopolies is that

the government typically has little incentive to reduce costs