Econ Test 2 T/F

¡Supera tus tareas y exámenes ahora con Quizwiz!

A competitive firm will produce in the short run so long as its price exceeds its average fixed cost

False

A pure monopolist will maximize profits by producing at that output where price and marginal cost are equal

False

Although individual purely competitive firms can influence the price of their products, these firms as a group cannot influence market price

False

Because of their large scale level of production, pure monopolists over-allocate resources in their industry by producing beyond the P=MC output

False

Because the ability to influence price, a pure monopolist can increase price and increase volume of sales simultaneously

False

Elasticity of resource demand is measured by dividing "percentage change in resource price" by "percentage change in resource quantity

False

In a purely competitive industry competition centers more on advertising and sales promotion than on price

False

In maximizing a profit a firm will always produce that output where total revenues are at a maximum

False

In the long run a pure monopolist must produce at that output where average total cost is at a minimum

False

In the long run monopolistically competitive firms make normal profits because they are forced to operate at the minimum point on their average total cost curve

False

In the short run a competitive firm will always choose to shut down if product price is less than the lowest attainable average total cost

False

In the short run a pure monopolist will charge the highest price the market will bear for its product

False

In the short run a pure monopolist will maximize profits by producing at that level of output where the difference between price and average total cost is at a maximum

False

Labor market discrimination increases the size of the nation's Gross Domestic Product

False

Majority voting assures that government will provide a public good if it yields total benefits in excess of total cost

False

Monopolistically competitive firms are inefficient because they produce at a point on the rising segment of their average cost curves

False

Monopolistically competitive sellers produce efficiently because they obtain normal profits in the long run

False

Monopolistically competitive sellers realize economic profits in the long run because entry barriers are significant

False

Price discrimination is illegal in the United States under the antitrust regulations

False

Price discrimination occurs every time a firm sells a good for two different prices

False

Producers should hire resources until the total output of each is equal

False

Pure monopolists always earn economic profits

False

Sales taxes are proportional in relation to income because the same tax rate applies regardless of the size of a purchase

False

Society's optimal amount of pollution abatement is where society's marginal benefit of abatement is zero

False

Technological progress in the health care industry has typically reduced costs and increased supply

False

The benefits-received principle of taxation is used to support corporate and personal income taxes

False

The benefits-received principle of taxation supports the case for highly progressive taxation

False

The closer to the Lorenz curve is to the diagonal, the greater is the degree of income inequality

False

The demand curve for a purely competitive industry is perfectly elastic, but the demand curves faced by individual firms in such an industry are downsloping

False

The market structure "oligopoly" includes industries with one or a small number of firms

False

The monopolistically competitive seller equates price and marginal cost in maximizing profits

False

The monopolistically competitive seller maximizes profits by equating price and marginal cost

False

The optimal (economically-efficient) level of air pollution is zero emissions

False

The regulation of natural monopolies has been criticized because it creates a tendency for regulated firms to use too much labor and too little capital in the production process

False

The supply of loanable funds is perfectly elastic

False

The top 20 percent of the US income earners receive nearly 80 percent of total US income

False

Unlike most demand curves, the demand curve for loanable funds is upsloping

False

A firm should reduce its employment of a resource whose marginal resource cost exceeds its marginal revenue product

True

A highly progressive tax takes relatively more from the rich than it does from the poor

True

After all long-run adjustments have been completed, a firm in a competitive industry will produce that level of output where average total cost is at a minimum

True

An improvement in the technology of pollution control is likely to increase society's optimal amount of pollution abatement

True

Because the equilibrium position of a purely competitive seller entails an equality of price and marginal costs, competition produces up to an efficient allocation of economic resources

True

Demand is the active and supply the passive determinant of land rent

True

Different rents on land reflect differences in the marginal revenue productivity of land

True

Generally speaking, the larger the number of firms in an ologopolistic industry, the more more difficult it is for those firms to collude

True

If the XYZ company can sell 4 units per week at $10 per unit and 5 units per week at $9 per unit, the marginal revenue of the fifth unit is $5

True

If three or four homogeneous oligopolists collude, the resulting price and production outcomes will be similar to those of pure monopoly

True

If you pay $1,000 tax on $10,000 of taxable income and $3,000 tax on a taxable income of $16,000 the tax is progressive

True

It will be profitable for a firm to hire additional units of any resource up to the point at which its MRP is equal to its MRC

True

Marginal cost is a measure of the alternative goods in which society forgoes in using resources to produce an additional unit of some specific product

True

Marginal revenue is the addition to total revenue resulting from the sale of one more unit of output

True

Price and marginal revenue are identical for an individual purely competitive seller

True

States permit electric utilities to enjoy monopoly status but try to regulate them so that the competitive outcome is attained

True

The MRP of labor curve is the labor demand curve

True

The U.S. breakfast cereal industry is an example of a differentiated oligopoly

True

The U.S. steel industry is an example of homogeneous oligopoly

True

The basic function of profits and losses is to allocate society's scarce resources to their highest valued uses

True

The demand curve of a monopolistically competitive producer is less elastic than that of a purely competitive producer

True

The demand for a resource depends on its productivity and the market value of the product it is producing

True

The interest rate is the price paid for the use of money

True

The larger the number of firms and the less degree of product differentiation, the greater will be the elasticity of a monopolistically competitive seller's demand curve

True

The marginal revenue product curve of a purely competitive seller declines solely because of the law of diminishing returns

True

The total revenue curve of a competitive seller graphs as a straight, up-sloping line

True


Conjuntos de estudio relacionados

Conflicts of Interest in Human Subjects Research

View Set

AP Art History: South, East, and Southeast Asia

View Set

American History 1301 - Unit 1: Chapter 3 & 4

View Set

Chapter 14 Review Worksheet: Adolescence: Biosocial

View Set

Geography U.S. and Canada Chapters 1-18

View Set

Chapter 41 - Neurological Emergencies

View Set