Econ Final Review

Refer to table 13-7 What is the value of L

b. $135

Refer to table 17-1 Suppose the town enacts new antitrust laws that prohibit Rochelle and Alec from operating as a monopoly. What will be the price of water once Rochelle and Alec reach a Nash EQ

b. $20

Refer to table 17-1 If Rochelle and Alec operate as a profit maximizing monopoly in the market for water, what price will they charge

b. $30

Refer to table 17-2 If the market for gasoline in Pittsville is a monopoly, then the profit maximizing monopolist will charge a price of

b. $5 and sell 500 gallons

Refer to table 13-7 What is the value of A

b. $50

Refer to table 13-7 What is the value of D

b. $50

Refer to table 13-7 What is the value of H

b. $50

Refer to table 17-1 If Rochelle and Alec operate as a profit maximizing monopoly in the market for water, how much profit will each of them earn

b. $9,000

Firms that operate in perfectly competitive markets try to

b. maximize profits

Refer to figure 14-2 If the market price is P3, in the short run the firm will earn

b. negative economic profits but will try to remain open

Refer to figure 14-1 If the market price is $5, the firm will earn

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

Economic profit is equal to total revenue minus the

b. opportunity cost of producing goods and services

Refer to figure 6-3 Suppose a tax of $3 per unit is imposed on this market. How much will sellers receive per unit after the tax is imposed

b. between $16 and $20

Refer to table 7-2 If the sellers bid against each other for the right to sell the good to a single consumer, then the producer surplus will be

c. $10 or slightly less

Refer to figure 14-1 At what price is the firm's maximum profit zero

c. $100

Refer to table 13-7 What is the value of B

c. $100

Refer to table 13-7 What is the value of C

c. $100

Refer to table 13-7 What is the value of E

c. $100

Refer to table 13-7 What is the value of K

c. $110

Refer to scenario 13-1 If Calvin purchases the factory with his own money, what is the annual implicit opportunity cost of purchasing the factory

c. $12,000

Refer to table 13-7 What is the value of F

c. $150

Refer to table 13-7 What is the value of I

c. $220

Refer to scenario 14-2 At Q=999, the firm's total costs equal

c. $24,980

Refer to figure 14-1 Suppose the price of the good is $175. If the firm produces and sells 514 units of output, its profit is approximately

c. $25,750

Refer to table 14-13 What is Diana's economic profit at the profit maximizing point

c. $278

Refer to scenario 14-3 At Q=499, the firm's profits equal

c. $3,997

Suppose a firm in a competitive market produces and sells 8 units of output and has a marginal revenue of $8. What would be the firm's total revenue if it instead produced and sold 4 units of output

c. $32

Refer to table 14-14 When Bob produces and sells the profit maximizing quantity, how much profit does he earn

c. $4.00

Refer to figure 14-1 The firm's short run supply curve is its marginal cost curve about

c. $4.50

Refer to table 14-14 What is Bob's total fixed cost

c. $5

Refer to scenario 14-2 At Q=1,000, the firm's profits equal

c. $5,000

Refer to table 17-7 Suppose the market for this product is served by two firms who have formed a cartel and are colluding to set the price and quantity in this market. If the marginal cost to produce this product is constant at $2 per unit, then what price will the cartel set in this market

c. $6

Refer to table 7-2 If Abbey, Bev, and Carl sell the good, and the resulting producer surplus is $55 altogether, then the price must have bee

c. $60

Refer to table 17-7 Suppose the market for this product is served by two firms who have formed a cartel and are colluding to set the price and quantity in this market. If the marginal cost to produce this product is constant at $2 per unit and there is no fixed cost, then what will the combined profit be

c. $80

Refer to table 14-9 In order to maximize profit, the firm will produce a level of output where marginal cost is equal to

c. $9

Average total cost equals

c. (fixed costs + variable costs) divided by quantity produced

Marginal cost is equal to

c. ∆TC/∆Q

Refer to scenario 14-1 At Q=999, the firm's total costs equal

a. $10,985

Refer to table 14-14 Suppose that due to a decrease in the market demand for bread the market price of bread drops to $2.75/loaf. At this new price, what is Bob's maximizing quantity

a. 5 units

Refer to table 17-8 If there were only one supplier of water, what would be the price and quantity

a. The price would be $7 and the quantity would be 600 gallons

Refer to table 13-1 The average variable cost of producing 240 units is

b. $0.19

Refer to scenario 14-1 At Q=1,000, the firm's profits equal

b. $1,000

Assume a firm in a competitive industry is producing 800 units of output, and it sells each unit for $6. Its average total cost is $4. Its profit is

b. $1,600

Refer to table 14-6 What ist he marginal revenue from selling the 3rd unit

b. $120

Refer to figure 7-2 If the EQ price rises from $60 to $120, what is the producer surplus to new producers in the market

b. $2,400

Refer to table 14-14 What is the marginal revenue of the 4th unit

b. $3.25

Refer to scenario 14-3 At Q=500, the firm's profits equal

b. $4,000

Refer to table 7-2 If the sellers bid against each other for the right to sell the good to a single consumer, then the good will sell for

b. $40 or slightly less

Refer to figure 14-1 Suppose the price of the good is $175. If the firm produces and sells 515 units of output, its total revenue is

b. $90,125

Refer to figure 7-3 At the EQ price, consumer surplus is

b. $900

Refer to table 14-14 At what quantity will Bob maximize his profit

b. 6 units

Refer to table 13-1 What is the marginal product of the third worker

b. 60 units

Refer to table 13-1 Suppose that Alyson's pet sitting service has a fixed cost of $50/month for her cell phone. Each worker costs Alyson $60/day. What is the shape of Alyson's total cost curve as output increases from 45 to 70

b. Total cost increases and gets steeper

If marginal cost is equal to average total cost, then

b. average total cost is minimized

A firm produces 300 units of output at a total cost of $1,000. If fixed costs are $100,

b. average variable cost is $3

Refer to scenario 14-1 At Q =999, the firm's profits equal

c. $1,003

Bubba is a shrimp fisherman who catches 4000 pounds of shrimp per year. He can sell the shrimp for $5 per pound. His average total cost of catching shrimp is $3 per pound. Bubba's annual total revenue is

c. $20,000

Refer to figure 14-1 When the price of the good is $175, the firm's maximum profit is

c. $25,750

Refer to figure 7-3 At the EQ price, total surplus is

d. $1,800

Refer to table 14-14 What is the total revenue from selling 5 units

d. $16.25

Refer to figure 6-3 Suppose a tax of $6 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed

d. $22

Refer to figure 7-2 If the EQ price rises from $60 to $120, what is the additional producer surplus to initial producers in the market

d. $4,800

Refer to table 14-6 What is the total revenue from selling 4 units

d. $480

Refer to figure 6-2 Which of the following price floors would be binding in this market

d. $6

Refer to figure 14-1 Suppose AVC=$113 when the firm produces 515 units of output. Then the firm's fixed cost amounts to

d. $6,180 and its profit amounts to $25,750

Refer to table 14-13 In order to maximize profits, how many units should Diana's Dress Emporium produce

d. 8

Refer to figure 14-1 Let Q represent the quantity of output and suppose the price of the good is $125. Then

d. All of the above are correct

Bev is opening her own court reporting business. She spent $5,000 to purchase her steno machine, $2,000 on a new computer, and $500 on miscellaneous office supplies. She financed these purchases by withdrawing $7,500 from her personal savings account. When she closed the account, the bank representative mentioned that she would have earned 4% interest next year. If Bev hadn't opened her own business, she would have earned a salary of $25,000. In her first year, Bev's revenues were $30,000. Which of the following statements is correct

d. Bev's implicit costs are $25,300

Refer to figure 14-1 Let Q represent the quantity of output and suppose the price of the good is $125. Then

d. None of the above are correct

Which of the following statements is correct

d. Only for competitive firms does average revenue equal marginal revenue

Refer to table 13-1 For the firm whose production function and costs are specified in the table, its average total cost curve is

d. U-shaped

Refer to figure 6-2 Which of the following statements is correct

d. a price floor set at $6.50 would result in a surplus

Refer to figure 6-2 If the government imposes a price floor of $7 on this market, then there will be

d. a surplus of 20 units

In the long run, the number of firms in a competitive industry is

d. able to adjust to market conditions

Christopher is a professional tennis player who gives tennis lessons. The industry is competitive. Christopher hires a business consultant to analyze his financial records. The consultant recommends that Christopher give fewer tennis lessons. The consultant must have concluded that Christopher's

d. marginal cost exceeds his marginal revenue

Refer to scenario 14-2 To maximize its profit, the firm should

a. increase its output

Refer to table 14-8 The firm will produce a quantity greater than 4 because at 4 units of output, marginal cost

a. is less than marginal revenue

Marcia is a fashion designer who runs a small clothing business in a competitive industry. Marcia specializes in making designer dresses. Marcia sells 10 dresses per month. Her monthly total revenue is $5,000. The marginal cost of making a dress is $400. In order to maximize profits, Marcia should

a. make more than 10 dresses a month

Laura is a gourmet chef who runs a small catering business in a competitive industry. Laura specializes in making wedding cakes. Laura sells 20 wedding cakes/month. Her mostly total revenue is $5,000. The marginal cost of making a wedding cake is $200. In order to maximize her profits, Laura should

a. make more than 20 wedding cakes a month

In a perfectly competitive market,

a. no one seller can influence the price of the product

Refer to figure 6-2 If the government imposes a price ceiling of $6 on this market, then there will be

a. no shortage

Refer to figure 6-2 If the government imposes a price floor of $3 on this market, then there will be

a. no surplus

Refer to figure 14-2 If the market price is P1, in the short run the firm will earn

a. positive economic profit

Refer to figure 14-1 If the market price rises above $6.30, the firm will earn

a. positive economic profits in the short run

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

d. reduce production to increase profit

Refer to figure 7-3 At the EQ price, producer surplus is

$900

Refer to table 13-1 For the firm whose production function and costs are specified in the table, its total cost curve is

c. increasing at an increasing rate

Refer to table 17-2 Suppose there are exactly two sellers of gasoline in Pittsville: Exxoff and BQ. If Exxoff sells 300 gallons an dBQ sells 400 gallons, then

a. Exxoff's profit is $900 and BQ's profit is $1,200

Refer to table 17-1 If this market for water were perfectly competitive instead of monopolistic, what price would be charged

a. $0

Refer to figure 7-3 If the government imposes a price floor of $90 in this market, then consumer surplus will be

a. $225

Refer to table 13-7 What is the value of J

a. $25

Refer to figure 6-2 Which of the following price ceilings would be binding in this market

a. $4

Refer to scenario 14-2 At Q=999, the firm's profits equal

a. $4,990

Refer to scenario 14-3 At Q=499, the firm's total costs equal

a. $5,983

Refer to table 13-7 What is the value of N

a. $50

Refer to table 14-13 What is the marginal cost of the first unit

a. $50

Refer to figure 14-1 In the short run, the firm's maximum profit (or minimum loss) is the same at which of the following pairs of prices

a. $65 and $75

Refer to figure 14-1 The firm will shut down in the short run if the price of the good is

a. $75

Refer to table 13-3 The marginal product of the fourth worker is

a. 10 units

Refer to figure 15-3 The demand curve for a monopoly firm is depicted by curve

a. A

Refer to figure 14-7 Which line segment best reflects the short run supply curve for this firm

a. ABCF

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. Which of the following statements is correct regarding Katherine's profits from selling flowers?

a. Katherine's accounting profits are $100, and her economic profits are $25

Refer to figure 14-2 Which of the four prices corresponds to a firm earning positive economic profits in the short run

a. P1

Refer to table 17-8 If there are two suppliers of water, Victor and Sami, and if they have successfully formed a cartel, then what would be the price and the market quantity

a. The price would be $7 and the quantity would be 600 gallons

Refer to figure 14-1 The firm will earn a positive economic profit in the short run if the market price is

a. above $6.30

In a market with a fixed number of firms, as long as price is

a. above average variable cost, each firm's marginal cost curve is its supply curve

Refer to figure 6-1 A government imposed price of $12 in this market is an example of a

a. binding price ceiling that create a shortage

Suppose that a firm operating in a perfectly competitive market sells 200 units of output at a price of $3 each. Which of the following statements is correct

a. i only

Suppose that a firm operating in a perfectly competitive market sells 300 units of output at a price of $3 each. Which of the following statements is correct

a. i only

Shrimp Galore, a shrimp harvesting business in the Pacific Northwest, has a 30 year loan on its shrimp harvesting boat. The annual loan payment is $25,000 and the boat has a market value that exceeds its outstanding loan balance. Prior to the 2010 shrimp harvesting season, Shrimp Galore's accountant predicted that at expected market prices for shrimp, Shrimp Galore would have a net loss of $75,000 after paying all 2010 expenses(including annual loan payment). In this case, Shrimp Galore should

a. produce nothing and experience a loss of $25,000

For a certain firm, the 100th unit of output that the firm produces has a marginal revenue of $10 and a marginal cost of $7. It follows the

a. production of the 100th unit of output increases the firm's profit by $3

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

a. shut down because staying open would be more expensive

Competitive firms that earn a loss in the short run should

a. shut down if P<AVC

Refer to table 13-3 At which number of workers does diminishing marginal product begin

b. 2

Refer to table 13-3 If the firm can sell its output for $1/unit, what is the profit maximizing level of output

b. 230 units

Refer to table 14-9 At which quantity of output is marginal revenue equal to marginal cost

b. 6 units

Refer to figure 15-3 The marginal curve for a monopoly firm is depicted by curve

b. B

Refer to figure 14-2 Which of the four prices corresponds to a firm earning zero economic profits in the short run

b. P2

Refer to figure 15-3 If the monopoly firm wants to maximize its profit, it should operate at a level of output equal to

b. Q2

Refer to table 17-2 If there are exactly two sellers of gasoline in Pittsville and if they collude, then which of the following outcomes is most likely

b. each seller will sell 166.67 gallons and charge a price of $5

Refer to figure 15-3 Profit can always be increased by increasing the level of output by one unit if the monopolist is currently operating at

b. i or ii only

A competitive firm is currently producing a quantity of output at which marginal revenue exceeds marginal cost. In order to increase its profit, the firm should

b. increase its quantity of output

Refer to table 14-9 If the firm's marginal cost is $5, it should

b. increase production to maximize profit

Marcia is a fashion designer who runs a small clothing business in a competitive industry. Marcia specializes in making designer dresses. Marcia sells 10 dresses/month. Her monthly total revenue is $5,000. The marginal cost of making a dress is $600. In order to maximize profits, Marcia should

b. make fewer than 10 dresses/month

Refer to table 14-9 If the firm produces 4 units of output

b. total revenue is greater than variable cost

Refer to table 14-14 Suppose that due to a decrease in the market demand for bread the market price of bread drops to $2.75/loaf. At this price, if Bob produces and sells the profit maximizing quantity, how much profit will he earn

b.$1.25

Refer to figure 15-3 If the monopoly firm is currently producing Q3 units of output, then a decrease in output will necessarily cause profit to

c. increase as long as the new level of output is at least Q2

Refer to scenario 14-3 If the marginal cost of producing the 501st unit would be $19, producing and selling the 501st unit would

c. increase the firm's profit by $1

Refer to table 7-1 If the market price of an apple is $1.40, then the market quantity of apples demanded per day is

c. 3

Refer to table 17-8 If there are two suppliers of water, Victor and Sami, and if they have successfully formed a cartel and split the market evenly, then how many bottles will Sami supply

c. 300

Refer to table 14-8 The firm will not produce an output level beyond

c. 6 units

Refer to table 14-8 In order to maximize profits, the firm will produce

c. 6 units of output because marginal revenue equals marginal cost

Refer to table 17-1 If Rochelle and Alec operate as a profit maximizing monopoly in the market for water, how many gallons of water will be produced and sold

c. 600

Refer to table 13-3 The marginal product of the second worker is

c. 80 units

Refer to table 17-1 Suppose the town enacts new antitrust laws that prohibit Rochelle and Alec from operating as a monopoly. How may gallons of water will be produced and sold once Rochelle and Alec reach a Nash EQ

c. 800

Refer to figure 15-3 The marginal cost curve for a monopoly firm is depicted by curve

c. C

Susan quit her job as a teacher, which paid her $36,000/year, in order to start her own catering business. She spent $12,000 of her savings, which had been earning 10% interest/year, on equipment for her business. She also borrowed $12,000 from her bank at 10% interest, which she also spent on equipment. Fort he past several months she has spent $1,000/month on ingredients and other variable costs. Also for the past several months she has taken in $3,500 in monthly revenue

c. In the short run, Susan should continue to operate her business, but in the long run she will probably face competition from newly entering firms

Refer to table 13-1 For the firm whose production function and costs are specified in the table, its average variable cost curve is

c. increasing

Refer to figure 14-2 Which of the four prices corresponds to a firm earning negative ecumenic profits in the short run but trying to remain open

c. P3

Refer to table 17-8 If there were many suppliers of bottled water, what would be the price and quantity

c. The price would be $4/gallon, and the quantity would be 1200 gallons

Refer to figure 6-2 Which of the following statements is not correct

c. a price ceiling set at $3.50 would result in a surplus

Refer to figure 6-2 If the government imposes a price ceiling of $4 on this market, then there will be

c. a shortage of 10 units

Refer to figure 6-1 A government imposed price of $24 in this market is an example of a

c. binding price floor that create a surplus

For a firm, marginal revenue minus marginal cost is equal to

c. change in profit

Refer to scenario 14-1 To maximize its profit, the firm should

c. decrease its output but continue to produce

Refer to table 7-1 If the market price of an apple increases from $1.40 to $1.60, then consumer surplus

c. decreases by $0.45

For a certain firm, the 100th unit of output that the firm produces has a marginal revenue of $10 and a marginal cost of $11. It follows that the

c. firm's profit maximizing level of output is less than 100 units

Refer to figure 14-1 The firm will earn a negative economic profit but remain in business in the short run if the market price is

c. less than $6.30 but more than $4.50

Charlene sells cotton candy. The cotton candy industry is competitive. Charlene hires a business consultant to analyze her company's financial records. The consultant recommends that Charlene increase her production. The consultant must have concluded that Charlene's

c. marginal revenue exceeds her marginal cost

Refer to figure 14-1 If the market price is $4, the firm will earn

c. negative economic profits and shut down

Refer to figure 14-2 If the market price is P4, in the short run the firm will earn

c. negative economic profits and will shut down

Refer to figure 6-3 Suppose a tax of $6 per unit is imposed on this market. Which of the following is correct

c. sellers will bear more of the burden of the tax than buyers will

The accountants hired by the Brookside Racquet Club have determined total fixed cost to be $75,000, total variable cost to be $130,000, and total revenue to be $145,000. Because of this information, in the short run the Brookside Racquet Club should

c. stay open because shutting down would be more expensive

Refer to table 17-2 If the market for gasoline in Pittsville is perfectly competitive, then the EQ price of gas is

d. $0 and the EQ quantity is 1,000 gallons

Refer to scenario 13-1 Suppose Calvin purchases the factory using $200,000 of his own money and $200,000 borrowed from a bank at an interest rate of 6%. What is Calvin's annual opportunity cost of purchasing the factory

d. $18,000

Refer to table 13-7 What is the value of G

d. $270

Refer to table 13-7 What is the value of M

d. $410

Refer to table 14-9 The maximum profit available to the firm is

d. $5

Refer to table 14-9 In order to maximize profit, the firm will produce a level of output where marginal revenue is equal to

d. $9

Refer to table 17-1 If the market for water were perfectly competitive instead of monopolistic, how many gallons of water would be produced and sold

d. 1,200

Refer to table 17-1 What is the socially efficient quantity of water

d. 1,200 gallons

Refer to table 13-4 What is the marginal product of the second worker

d. 25 students

Refer to table 17-7 If this market is perfectly competitive and the marginal cost is constant at $2 per unit, then how much output will be produced

d. 40

Refer to table 13-3 The marginal product of the third worker is

d. 60 units

Refer to figure 14-7 Which segment of the supply curve represents the firm shutting down

d. AB

Refer to figure 15-3 The average total cost curve for a monopoly firm is depicted by curve

d. D

Refer to figure 14-2 Which of the four prices corresponds to a firm earning negative economic profits in the short run and shutting down

d. P4

Refer to figure 15-3 Profit will be maximized by charging a price equal to

d. P4

Refer to figure 14-1 In the long run, the firm will exit the market if the price of the good is

d. all of the above are correct

Profit maximizing firms enter a competitive market when existing firms in that market have

d. average total costs less than market price

Suppose that firm operating in perfectly competitive market sells 100 units of output. Its total revenues from the sale are $500. Which of the following statements is correct

d. i, ii, and iii

Refer to figure 14-1 The firm should shut down if the market price is

d. less than $4.50

The marginal product of an input in the production process is the increase in

d. quantity of output obtained from an additional unit of that input

Refer to figure 14-2 If the market price is P2, in the short run the firm will earn

d. zero economic profits

Refer to figure 14-1 If the market price is $6.30, the firm will earn

d. zero economic profits in the short run