Econ Final

The above figure shows the costs at Barney's Bagel Bakery. If the price of flour increases, the change in costs would be best represented by:

A vertical shift in ATC, AVC and MC

The major distinguishing characteristic of oligopoly is that

Firms are interdependent

The Supply Room, a mail-order school supply store, grew rapidly. As a result of achieving a much larger size, the Supply Room is able to realize (1) volume discounts when buying from its suppliers, and (2) lower transportation costs by shipping in bulk. The best explanation of this is that the Supply Room seems to be experiencing

Increasing returns to scale

The profit-maximizing level for all firms, regardless of industry structure, is the output level where

MC = MR.

Suppose that consumption of oat bran is found to reduce cholesterol and improve health. The result is that:

The demand for oat bran increases. the demand for oat bran decreases.

according to the theory of comparative advantage, specialization and free trade will benefit

all trading parties, even when some are absolutely more efficient producers than others

According to the theory of comparative advantage, specialization and free trade will benefit

all trading parties, even when some are absolutely more efficient producers than others.

Which of the following would be most likely to cause the demand for macaroni and cheese to shift from D0to D1?

an increase in income, assuming macaroni and cheese is a normal good

Which of the following would an economist classify as capital?

an oven used by a baker

At the point where marginal cost equals average total cost, average total cost will be

at its minimum.

Of the following, ________ is the best example of an oligopolistic industry.

automobiles production

If marginal cost is greater than average total cost, then

average total cost is increasing

The marginal cost curve intersects the ________ at its minimum.

average variable cost curve average total cost curve

If marginal cost is above average variable cost, then

average variable cost is increasing.

Economic growth occurs when

both a society acquires new resources and a society learns to produce more using existing resources.

If an economy begins to use its resources more efficiently, it will move

closer to its ppf.

Industries in which firms are suffering losses are likely to ________ in the long run.

contract

as output increases, average fixed costs

decrease

Strawberries are produced in a perfectly competitive market. Average consumer incomes decrease. This will cause the individual strawberry farmer's marginal revenue to ________ and their profit maximizing level of output to ________.

decrease; decrease

The price elasticity of demand for bottled water in Texas is -2, and the price elasticity of demand for bottled water in California is -0.5. In other words, demand in Texas is ________, and demand in California is ________.

elastic; inelastic

Marginal cost is ________ average variable cost when ________.

equal to; average variable cost is minimized.

Average fixed costs

fall as output rises

Total revenue decreases if price ________ and demand is ________.

falls; inelastic

Unlike a monopolistic firm's product, a monopolistically competitive firm's product

has too many close subs

At a price of $11, quantity demanded is 90; and at a price of $10, quantity demanded is 100. Since total revenue ________ by the price decrease, demand must be ________.

is increased; elastic

The pizza delivery industry is monopolistically competitive. Little Joe's Pizzeria raises its prices by 10%, but all the other pizzerias in town keep their prices the same. Which of the following is most likely to occur?

little joe's pizzeria will lose some of its customers

In the long run, a monopoly

may earn positive economic profits due to entry barriers

The marginal cost curve intersects the average variable cost curve at its ___

minimum

An increase in quantity supplied is represented by a movement from

movement along the supply

An Decrease in quantity supplied is represented by a movement from

movement down the supply line

the long run is the period of time in which the quantities ___

of ALL factors of production are VARIED

The short run is the time frame in which quantities ___

of SOME factors of production are FIXED

A form of industry structure characterized by a few firms each large enough to influence market price is

oligopoly

Using the midpoint formula, if the price of a gardenburger is decreased from $7 to $6, the price elasticity of demand equals ________, and the decrease results in a(n) ________ in total revenue.

price of elasticity -1.44 increase in total revenue

An improvement in technology will cause the

production possibility frontier to shift outward.

During the Iraq War, many of Iraq's oil refineries were destroyed. This would best be represented by a

shift of Iraq's production possibility frontier toward the origin.

The United States has a comparative advantage in the production of wheat, and Haiti has a comparative advantage in the production of sugar. If both countries specialize based on the theory of comparative advantage,

the production and consumption of both goods will increase.

If a firm is producing where MR > MC,

the revenue gained by producing one more unit of output exceeds the cost incurred by doing so

if a firm is producing where MR>MC

the revenue gained by producing one more unit of output exceeds the cost incurred by doing so

When Hurricane Andrew passed through Louisiana in the summer of 1992, approximately a quarter of the sugar cane crop was destroyed. Ceteris paribus,

the supply of sugar decreased, and the price of sugar increased.

f the price of a hamburger is increased from $2 to $4, the price elasticity of demand equals ________. Use the midpoint formula.

-0.33

If the price of a hamburger is increased from $6 to $8, the price elasticity of demand equals ________. Use the midpoint formula.

-1.4

If the price of a gardenburger is increased from $6 to $8, the price elasticity of demand equals ________ and demand is ________.

-1.75 elastic

Stereo Sound Unlimited has a monopoly over the installation of surround sound systems. If Stereo Sound Unlimited's total revenue from installing 10 sound systems is $20,000 and its total revenue from installing 11 sound systems is $18,000, what is the marginal revenue of the eleventh sound system?

-2000

If the price of a hamburger is increased from $8 to $10, the price elasticity of demand equals ________. Use the midpoint formula.

-3.0

If a firm's total costs are $80 when 10 units of output are produced and $90 when 11 units of output are produced, the marginal cost of the 11th unit is

10 dollars

If a firm's total costs are $80 when 10 units of output are produced and $90 when 11 units of output are produced, the marginal cost of the 11th unit is

10$

If the most someone is willing to pay for ticket to see their favorite team is $100 and the market price of the ticket is $35, then this buyer will get consumer surplus of

65

In the short run a firm's lowest cost level of output is the minimum point on its ________ cost curve.

Average Total Cost

when marginal cost is less than average total cost, average total cost is ___

Decreasing

If P > ATC, then a profit maximizing, monopolistically competitive firm earns ________ economic profits.

Postive Profits

The closest example of a perfectly competitive market is

Soybeans

Which of the following is NOT a resource as the term is used by economists?

Time

For economies of scale, a(n) ________ in a firm's scale of production leads to ________ average total cost

increase and lower

For economies of scale, a(n) ________ in a firm's scale of production leads to ________ average total cost.

increase production lower atc

Diminishing marginal returns implies

increasing marginal costs

An economy that is producing on the production possibility curve at some point other than the output of efficient allocation is

inefficient, as the combination of goods and services produced is not what people want

An economy that is producing on the production possibility curve at some point other than the output of efficient allocation is

inefficient, as the combination of goods and services produced is not what people want.