micro exams ?
The table below shows a monopolist's demand curve and the cost information for the production of its good. What will their profits equal?
$1200
In order to produce 100 oatmeal cookies, GoodieCookieCo incurs an average total cost of $0.25 per cookie. The company's marginal cost is constant at $0.10 for all oatmeal cookies produced. The total cost to produce 50 oatmeal cookies is
$20
In order to produce 100 pairs of oven gloves, Marcia incurs an average total cost of $2.50 per pair. Marcia's marginal cost is constant at $10.00 for every pair of oven gloves produced. The total cost to produce 50 pairs of oven gloves is
$200.00
The table below sets out the amount of capital needed for certain investment projects and the rate of return for each project. What is this firm's demand for physical capital if their hurdle rate is 5%?
$23 million
The table below sets out the amount of capital needed for certain investment projects and the rate of return for each project. What is this firm's demand for physical capital if their hurdle rate is 8%?
$500,000
Neil's Bakery is famous for its giant cinnamon buns. The bakery has fixed costs of $100. Neil must pay each worker a wage of $10.00 per hour and each works an 8 hour shift. He earns $2 for each cinnamon bun that is sold. The following table shows how many cinnamon buns he can sell, depending on the number of workers he hires. Refer to the table below. To maximize his profits in this competitive market, how many workers should he hire?
3 workers
Todd is a cattle rancher. In June and July he spent his clothing budget on jeans and cowboy hats. Each pair of jeans cost $50 and each hat cost $100. At Todd's optimal choice, his marginal utility from the last pair of jeans purchased is 200. This means that his marginal utility from the last cowboy hat purchased is:
400
Troy has a part-time job in a book store to help pay for his college. He can work up to 30 hours each week at his job, which pays $9 per hour. The table below shows his utility from different levels of leisure and income. Troy currently works 20 hours per week. If he decides to work 30 hours instead, his marginal utility gain from the additional income is ____.
9
The table below sets out cost information for the production of volley balls. Some values are missing. Which of the following statements is correct?
A = 42, E = 12
______ is the process of buyers and sellers exchanging goods and services.
A market
Which of the following accurately describes the difference between an individual supply curve and a market supply curve?
A market supply curve focuses on more suppliers than an individual supply curve does.
_____________________ help to explain why every economy, as it develops, has an increasing proportion of its population living in urban areas.
Agglomeration factors
Which of the following accurately illustrates the law of demand?
As the price of apples increases, the demand for apples decreases.
____________ tells a firm whether it can earn profits given the price in the market.
Average cost
______ and ______ are considered to be complements.
Cereal; milk
Which of the following is an accurate statement about inferior goods?
Consumers buy more of them when incomes fall.
Which of the following examples illustrates a competitive market?
DigiAdd, Inc. becomes the fifth company that produces calculators.
____________________________ occur when the marginal gain in output diminishes as each additional unit of input is added.
Diminishing marginal returns
Which PYNTE factor deals with what buyers think will happen to future prices?
E
____________ law implies ownership over an idea or concept or image
Intellectual property
Which of the following is the main point of a market?
It enables trade.
______________ and ____________ refer to the quantity and price at a point in time.
Productive; allocative efficiency
Which of the following shows an accurate difference between scarcity and shortage?
Scarcity is unrepairable; shortage is repairable.
______ are generally goods for which one could be used in place of the other.
Substitutes
Which of the following is an accurate difference between a substitute and a complement?
Substitutes are used in place of other goods; complements are used with other goods.
Why does the increased price of a product increase the quantity supplied of the product?
The increased price gives companies a better chance of making a profit.
Which of the following would most likely lower production costs for a company?
Update technology.
______________ include all of the costs of production that increase with the quantity produced.
Variable costs
In a perfectly competitive market setting, which of the following would be a true statement?
Wage rates trend toward marginal revenue product levels.
Which SPENT factor deals with substitutes?
P
Which of the following is an accurate equation for the law of demand?
P ↑⇒ QD ↓ and P ↓⇒ QD ↑
What is the first question that must be answered in an economy?
What goods and services will be produced?
A state government establishes a significantly higher minimum wage. Which PYNTE factor will this impact?
Y
Which of the following examples belongs to the supply side of the market?
a company producing carpenter tools
Goods and services move between buyers and producers in ______.
a continuous flow
If there is a demand for 5,000 lemons and a supply of 3,000 lemons, which of the following would be the result?
a shortage
Which one of the following is the most accurate description of a monopolist?
a sole producer of a product for which good substitutes are lacking in a market with high barriers to entry
Ina has just submitted the final annual budget for her city's government. Ina's work is most involved in answering which basic economic question?
Who will get the goods and services?
Temperatures have persisted below freezing levels in Florida throughout the months of December and January. As a result, demand for electricity sharply increased and the price of electricity rose sharply. The price of coal also rose. In these circumstances, any resulting shifts in the supply curves for coal miners and electricity producers
can also be interpreted as shifts of their respective marginal cost curves.
The main reason for increasing opportunity cost is that some resources and skills ______.
cannot be easily adapted
Refer to the table below. In this instance, expansion of output
causes input prices to rise as demand for inputs increases.
Which of the following is a necessary criterion for a market demand curve?
ceteris paribus
In the acronym SPENT, what does the "P" stand for?
changes in the prices of related goods and services
A production possibilities curve represents the potential total output combination of ______ for an economy.
any two goods
Two products that are purchased to be used together are known as ______.
complements
Wheat flour and straw are produced by using different parts of the wheat plant. This example shows ______ in production.
complements
Fans at a baseball park begin buying more pizza and fewer hot dogs consistently. The stadium manager decides to replace two hot dog stands with pizza stands. This decision demonstrates the impact of ______.
consumer sovereignty
What is the name of the idea that consumers use their dollars to vote for what should be produced?
consumer sovereignty
Which of the following falls outside of the classification of business expenses that fall into the category of fixed costs?
costs incurred in the act of producing
Which of the following falls outside of the classification of business expenditures that fall into the category of variable costs?
costs of research and development
A construction company has to decide how to build its houses. If it makes the most logical economical choice, it will base its decision on the method that ______.
costs the least
It is said that in a perfectly competitive market, raising the price of a firm's product from the prevailing market price of $179.00 to $199.00, ________________________.
could likely result in a notable loss of sales to competitors
The fact that a consumer is not required to buy the goods that a given firm produces, as well as the fact that the consumer might want the goods a firm produces, but may choose to buy from other firms instead
are two stark realities any business firm must recognize.
The typical pattern of costs for a monopoly can be analyzed by using: I) total cost II) fixed cost III) variable cost IV) marginal cost V) average cost VI) average variable cost
all of the above
The typical pattern of costs for a perfectly competitive firm can be analyzed by using: I) total cost II) fixed cost III) variable cost IV) marginal cost V) average cost VI) average variable cost
all of the above
Hector inherited 500 acres of tillable land from his uncle. A large company pays Hector to use his land to grow soybeans. Hector's land is considered ______.
an input
The planning process in a market economy is ______.
decentralized
The law of ______ says that, other things being equal, when the price of a good or service falls, the quantity people are willing and able to buy increases.
demand
The two primary factors determining monopoly market power are the firm's
demand curve and its cost structure
The most common pattern for marginal utility is ____________________.
diminishing marginal utility
The term ___________________ is used to describe the common pattern whereby each marginal unit of a consumed good provides less of an addition to utility than the previous unit.
diminishing marginal utility
Substitution and income effects of a change in price of a good may be used to explain the:
direct relationship between income and demand.
When consumers wait in line to receive goods, this is one way of ______ goods.
distributing
Which of the following is most likely to cause variation in American household spending patterns?
each of the above will cause a variation
The future of cities in the United States and in other countries will be determined by their ability to benefit from the _________________ and to minimize or counterbalance the ______________________.
economies of agglomeration; corresponding diseconomies
The term __________________ describes a situation where the quantity of output rises, but the average cost of production falls.
economies of scale
When __________________ exist, doubling of all inputs will result in more than doubling output, which means __________________________________________.
economies of scale; a larger factory can produce at a lower average cost than a smaller company.
When a society is using its resources to the fullest extent, economists refer to that state as ______.
efficiency
The government wants to make medicare benefits available to more people, but to achieve this goal, it needs to make cuts in the existing medicare budget. The two areas where they are considering cuts are non-essential elective surgery and 6-12 month mental health care programs. Applying the concept of diminishing marginal utility, the budget cuts should be made for spending on:
elective surgery due to its lower marginal return rate.
When J.K. Rowling exerts copyright ownership of her literary works, she creates a monopoly by restricting
entry into the market.
The term "constant returns to scale" describes a situation where
expanding all inputs does not change the average cost of production.
In order for an economy to grow, there must be changes in ______.
factors of production
In the simple circular flow diagram, households purchase goods and services produced by ______.
firms
In command economies, most economic activities are coordinated by ______.
governments
An outward shift in the production possibilities curve signifies ______.
growth
Why are some producers forced to sell their products at the prevailing market price?
high degree of similarity to competitor's products
A market demand curve is a ______ of individual demand curves.
horizontal summing
In the circular flow model, what is the term used to describe buyers of goods and services?
households
Which two entities interact in the circular flow diagram?
households and firms
In a factor market, inputs flow from ______ to ______.
households; firms
The term _____________ describes a situation where a ________________ causes a reduction in the buying power of income, even though actual income has not changed.
income effect; higher price
When economists attempt to predict the spending patterns of U.S. households, they will typically view the _____________________ as a primary determining factor that influences the individual consumption choices that each will make.
income level of each household
In which of the following groups will ALL of the elements cause an increase in the production of a good?
increase in the production of its complement; expectation of lower prices; better technology
The supply of a good ______ if the price of one of its substitutes in production ______.
increases; decreases
The key assumption that accompanies the use of numbers for measuring utility is that:
individuals choose based on their preferences.
Liberty is a talented engineer, but she is working for minimum wage setting up decorations for birthday parties at a campground. This is an example of ______.
inefficiency
In a production possibilities curve, any point in the shaded area inside the curve would be ______.
inefficient
Saving money is a(n) ____________________, because it involves less consumption in the present, but the ability to consume more in the future.
intertemporal choice
The _________________ budget constraint shows the tradeoff between present and future consumption.
intertemporal choice
What will benefit an economy most in the long run?
investing in capital
When Marietta chooses to only purchase a combination of goods that lie within her budget line, she:
is maximizing utility.
The economies-of-scale curve is a long-run average cost curve, because
it allows all factors of production to change.
When a monopolist increases sales by one unit,
it loses some marginal revenue and all of the above.
Kate's 24-Hour Breakfast Diner menu offers one item, a $5.00 breakfast special. Kate's costs for servers, cooks, electricity, food, etc. average out to $3.95 per meal. Her costs for rent, insurance cleaning supplies and business license average out to $1.25 per meal. Since the market is highly competitive, Kate should
keep the business open in the short-run, but plan to go out of business in the long-run.
What is the classification for a production process that relies mainly on the physical work of people?
labor-intensive
Which of the following is an example of a production input?
land
Which of the following actions is an example of a capital-intensive process?
launching a weather satellite into orbit
An outward shift of all points along the production possibilities curve ______.
leads to the ability to produce more of both goods
Which of the following is most likely to be a monopoly?
local electricity distributor
In the _____________, the perfectly competitive firm will react to profits by __________________.
long run; increasing its production
In the ______________, the perfectly competitive firm will react to losses by ______________________.
long run; reducing production or shutting down
When a natural monopoly exists in a given industry, the per-unit costs of production will be
lowest when a single firm generates the entire output of the industry.
Liat has 8 hours of free time a week to divide between tending her garden and writing her novel. It would take 8 hours a week to keep the garden free of weeds, and it would also take 8 hours to write a new chapter every week. Therefore, Liat has to either give up one of the activities she loves or divide her time between them. Economists would say that she must ______.
make trade-offs
The term _____________ is used to describe the additional cost of producing one more unit.
marginal cost
In economics, the term "shutdown point" refers to the point where the
marginal cost curve crosses the average variable cost curve.
Under perfect competition, any profit-maximizing producer faces a market price equal to its
marginal costs
Refer to the table below. In this instance, confirmation that this firm is operating in a perfectly competitive market can readily be ascertained by the fact that its
marginal revenue is constant
In economic terms, a practical approach to maximizing profits requires an examination of how changes in production affect ____________ and ________________.
marginal revenue; marginal cost
The term _________________ refers to the additional utility provided by one additional unit of consumption.
marginal utility
The step-by-step process of finding the choice with highest total utility involves a comparison of the:
marginal utility gained and lost from different choices along the budget constraint.
A(n) ______ demand curve is a horizontal summation of individual demand curves.
market
Adapting the ______ price can bring supply and demand together.
market
Which of the following is found at the point where the market supply curve and market demand curve intersect?
market equilibrium
A(n) ______ is a graphical representation of the quantity of goods and services that all producers in an area are willing and able to provide at various prices.
market supply curve
In Belgium, producers are willing to provide 50,000 pounds of cocoa beans at $4 per pound. This example would be shown on a(n) ______.
market supply curve
What happens in a perfectly competitive industry when economic profit is greater than zero?
new firms may enter the industry and all of the above
When there is economic growth, the production possibilities curve ______.
shifts outward
In the ________________, if profits are not possible, the perfectly competitive firm will seek out the quantity of output where __________________________.
short run; losses are smallest
In the _______________, the perfectly competitive firm will seek out _______________.
short run; the quantity of output where profits are highest
When a firm pursues a predatory pricing strategy, it does so
to maximize profits in the long run.
Why would a profit-seeking firm need to tailor its decisions about the quantity of labor inputs that it purchases?
to produce the profit-maximizing quantity of output at the lowest possible average cost
Which of the following denotes the typical shape of the monopolist's total cost curve?
total costs rise and grow steeper as output rises
Whatever the firm's quantity of production, _____________ must exceed total costs if it is to earn a profit.
total revenue
The total revenue curve for a monopolist will
start low, rise, and then decline.
Opportunity costs are constant with a(n) ______ production possibilities curve.
straight-line
Which of the following should typically be ignored because spending has already been made and cannot be changed?
sunk costs
The typical pattern revealed in a budget constraint model shows that as the quantity consumed rises,
total utility rises, but marginal utility falls.
The production possibilities curve shows output combinations for ______.
two products
The marginal cost curve is generally ______________, because diminishing marginal returns implies that additional units are ________________________.
upward-sloping; more costly to produce
Efficiency means no resources can be ______.
wasted
The government distributes food stamps that can only be used to acquire food to low-income families. The budget line graph will show food on the horizontal axis and everything else on the vertical axis. After receiving food stamps, Ted's family is able to consume the same amount of food. The new consumption point for Ted's family will be:
on the new budget line, directly above the old consumption point.
When a firm uses retained profits to invest in more energy efficient equipment, an economist would calculate the _____________________ of investing in physical capital.
opportunity cost
If output grows faster than population, ______.
people are better off
Which of the following will present the least amount of concern to a firm that has a monopoly over a particular industry?
the competitive actions of other business firms
The use of sharp, temporary price cuts as a form of ________ would enable traditional US automakers to discourage new competition from smaller electric car manufacturers.
predatory pricing
When a business adopts a strategy of reducing and/or discontinuing production in response to a sustained pattern of losses, it is
preparing to exit operations.
The term _______________ refers to a firm operating in a perfectly competitive market that must take the prevailing market price for its product.
price taker
In the circular flow model, what do firms do?
produce goods and services
Why would labor be treated as a variable cost?
producing larger quantities of a good or service generally requires more workers
What is the name for the markets that feature consumer goods and services?
product markets
Angelo wants to be an actor, so he decides to take acting lessons and singing lessons. He does not have enough time or money to study either skill as much as he would like. Angelo has to decide how many hours of acting lessons to take and how many hours of singing lessons to take. What type of graphic will best help Angelo?
production possibilities curve
When a firm makes plans for investments in physical capital, it compares the _________________ on these investments with ____________________.
projected rates of return; the cost of financial capital to the firm
Any change that will cause an increase in the ______ of a good that consumers want to buy at any given price shifts the demand curve to the right.
quantity
Which of the following causes a reduction in the supply of a product?
the expectation of higher prices for the product
When the demand for a good or service limits the quantity that can be sold to an output at which the firm experiences economies of scale,
the firm is a natural monopoly.
Which of the following is considered to be a tell-tale signal that the point with the highest total utility has been found?
the marginal utility per dollar is the same for both goods
The theoretical model of the intertemporal budget constraint for the U.S. economy as a whole suggests that the most common pattern seems to be that:
the quantity of savings doesn't adjust much to changes in the rate of return.
________________________ arises where many firms are competing in a market to sell similar but differentiated products.
Monopolistic competition
___________ include all spending on labor, machinery, tools, and supplies purchased from other firms.
Total costs
_____________ is calculated by taking the quantity of everything that is sold and multiplying it by the sale price.
Total revenue
Which of the following can be thought of as an adjustment for the risks involved with respect to the cost of a firm acquiring financial capital?
imposition of hurdle rates of interest
Which of the following occurs simultaneously with an income effect?
substitution effect
What qualities would ideally suit a monopolistic firm with regard to barriers to entry?
sufficient strength to prevent or discourage potential competitors from entering the market
Terry attends college and works part-time job in a drug store. She can work up to 40 hours each week, and is paid $9 per hour. The table below shows her utility from different levels of leisure and income. If Terry decides to work 20 hours per week, her total utility from both leisure and income would be:
142
The table below shows a monopolist's demand curve and cost information for the production of its good. What quantity will it produce?
1000
Which of the following is an accurate statement about equilibrium price?
It is found at the intersection point for the market supply curve and the market demand curve.
Which of the following is an accurate statement about the individual supply curve?
It slopes upward as you move from left to right.
____________ refers to the additional revenue gained from selling one more unit.
Marginal revenue
Which of the following is most unlikely to present a barrier to entry into a market?
deregulation
In economics, labor demand is synonymous with
derived demand.
When I'MaGoldMiner chooses what quantity of gold each of it/s mines will produce over the next 12 months, this quantity, along with the prices prevailing in the market for output and inputs, will
determine the company's total revenue, total costs, and its profits.
The ________________ arises when a price changes because consumers have an incentive to consume less of the good with a relatively higher price and more of the good with a relatively lower price.
substitution effect
The marginal utility of two goods changes ______________.
with the quantities consumed
