micro final
if the monopoly firm is not allowed to price discriminate, then the deadweight loss amounts to A) 0 B) 1,000 C) 2,000 D) 4,000
1,000
when it produces and sells 90 units of output, a competitive firms average total cost is $42 and its profit is 360. what is the firms marginal revenue if it sells 100 units of output?
46
if the monopolist uses perfect price discrimination, how much deadweight loss results? A) 0 B) 306.23 C) 612.50 D) 918.75
A) 0
how much profit will the museum earn if it engages in price discrimination? A) 800 B) 1,200 C) 1,600 D) 2,800
A) 800
under rent control, bribery is a mechanism to.. A) bring the total price of an apartment closer to the equilibrium price B) allocate housing to the poorest individuals in the market C) force the total price of an apartment to be less than the market price D) allocate the housing to the most deserving tenants
A) bring the total price of an apartment close to the equilibrium price
a tax on buyers of cereal will increase the price of cereal paid by buyers, A) decrease the effective price of cereal received by sellers, and decrease the equilibrium quantity of cereal B) decrease the effective price of cereal received by sellers, and increase the equilibrium quantity of cereal C) increase the effective price of cereal received by sellers, and decrease the equilibrium quantity of cereal D) increase the effective price of cereal received by sellers, and increase the equilibrium quantity of cereal
A) decrease the effective price of cereal received by sellers, and decrease the equilibrium quantity of cereal
if government regulation sets the maximum profit for a natural monopoly equal to its marginal cost, then the natural monopolist will: A) earn economic losses B) earn economic profits C) earn zero economic profits D) produce a lower quantity of output than is socially optimal
A) earn economic losses
accounting profit is equal to total revenue minus the.. A) explicit cost of producing goods and services B) opportunity cost of producing goods and services C) accounting cost of producing goods and services D) implicit cost of producing goods and services
A) explicit cost of producing goods and services
accounting profit is equal to total revenue minus the... A) explicit cost of producing goods and services B) opportunity cost of producing goods and services C) accounting cost of producing goods and services D) implicit cost of producing goods and services
A) explicit cost of producing goods and services
comparing firms in perfectly competitive markets to monopoly firms, which charges a price equal to marginal cost? A) perfectly competitive firms B) monopoly firms C) both D) neither
A) perfectly competitive firms
which of the following governmental actions would eliminate some or all of the inefficiency that results from monopoly pricing. the government could.. A) regulate the monopoly B) prohibits the monopoly from price discrimination C) force the monopoly to operate at a point where its marginal revenue is equal to its marginal cost D) none of the above would eliminate inefficiency associated with a monopoly
A) regulate the monopoly
which of the following governmental actions would eliminate some or all of the inefficiency that results from monopoly pricing? the government could.. A) regulate the monopoly B) prohibited the monopoly from price discriminating C) force the monopoly to operate at a point where its marginal revenue is equal to its marginal cost D) none of the above would eliminate any inefficiency associated with a monopoly
A) regulate the monopoly
suppose sellers are required to spend 1.00 to the government with every bottle of perfume they sell. further, suppose this tax causes the price paid by buyers of perfume to rise by .60 cents a bottle. which of the following statements is correct? A) effective price received by sellers is .40 cents a bottle less than it was before the tax B) 60% of the burden falls on sellers C) this tax causes the demand curve for perfume to shift downward by 1.00 at each quantity of perfume. D) all of the above are correct
A) the effective price received by sellers is .40 cents a bottle less than it was before the tax
when a firm is able to put idle equipment to use by hiring another worker A) variable costs will rise B) variable costs will fall C) fixed costs will fall D) both fixed costs and variable costs will rise
A) variable costs will rise
bubba shrimp is a fisherman who used $2000 from his personal savings account to buy a boat and equipment for his shrimp business. the savings account paid 2% interest. what is bubbas annual opportunity cost of the financial capital that he invested in his business? A) $20 B) $40 C) $200 D) $400
B) $40
if the monopoly firm is not allowed to price discriminate, then the deadweight loss amounts to A) 0 B) 1,000 C) 2,000 D) 4,000
B) 1,000
if marginal cost is equal to average total cost, then.. A) marginal cost is minimized B) average total cost is minimized C) average total cost is minimized D) marginal cost is 0
B) average total cost is minimized
if marginal cost is equal to average total cost, then.. A) marginal cost is minimized B) average total cost is minimized C) average variable cost is minimized D) marginal cost is 0
B) average total cost is minimized
if marginal cost is equal to average total cost, then.. A) marginal cost is minimized B) average total cost is minimized C) average variable cost is minimized D) marginal cost is zero
B) average total cost is minimized
at berts bootery, the total cost of producing twenty pairs of boots is $400. the marginal cost of producing the twenty first pair of boots is $83. we can conclude that: A) average variable cost of 21 boots is $23 B) average total costs of 21 boots is $23 C) average total cost of 21 boots is 15.09 D) marginal cost of the 20th pair of boots is $20
B) average total cost of 21 pairs of boots is $23
whenever a perfectly competitive firm chooses to change its level of output, its marginal revenue.. A) increases if MR>ATC and decreases if MR>ATC B) does not change C) increases D) decreases
B) does not change
whenever a perfectly competitive market chooses to change its level of output, its marginal revenue.. A) increases if MR<ATC and decreases if MR>ATC B) does not change C) increase D) decrease
B) doesnt change
a production function describes A) how a firm maximizes profits B) how a firm turns inputs to outputs C) the minimal cost of producing a given level of output D) the relationship between cost and output
B) how a firm turns input to output
as a general rule, when accountants calculate profit they account for explicit costs but usually ignore.. A) certain outlays of money by the firm B) implicit costs C) operating costs D) fixed costs
B) implicit costs
the tax burden will fall most heavily on the sellers of the good when the demand curve: A) is relatively steep, and the supply curve is relatively flat B) is relatively flat, and the supply curve is relatively steep C) and the supply curve are both relatively flat D) and the supply curve are both relatively steep
B) is relatively flat, and the supply curve is relatively steep
the analysis of competitive firms sheds light on the decisions that lie behind the: A) demand curve B) supply curve C) way firms make pricing decisions in the not for profit sector of the economy D) way financial markets set interest rates
B) supply curve
profit is defined as: A) net revenue minus depreciation B) total revenue minus total cost C) average revenue minus average total cost D) marginal revenue minus marginal cost
B) total revenue minus total cost
suppose that a firm in a competitive market is currently maximizing its short run profit at an output of 50 units. if the current price is $9, the marginal cost of the 50th unit is $9 and the average cost of 50 is 4. what is the profit A) 0 B) 200 C) 250 D) 450
C) 250
for this firm, the marginal revenue from selling the 3rd unit is: A) $12 B) $4 C) $3 D) $1
C) 3$
when the firm produces 150 units of output, its total cost is: A) 3,450.00 B) 3,525.75 C) 3,675.00 D) 3,850.00
C) 3,675.00
Riva crafts and sells hard cider as a part time job. she can bottle and sell four cases in a week. she is considering hiring her friend atul to help her. he can bottle and sell 3 cases per week. what is the maximum total output possible if rival hires atul A) 3 cases B) 4 cases C) 7 cases D) 11 cases
C) 7 cases
the monopolist fixed costs of 1,000 and has a constant marginal cost of $2 per unit. if the monopolist were able to perfectly price discriminate, how many units would it sell? A) 400 B) 500 C) 900 D) 4,200
C) 900
the social cost of a monopoly is equal to its: A) economic profit B) fixed cost C) dead weight loss D) variable cost
C) dead weight loss
a benefit to society of the patent and copyright law is that those laws: A) help keep price down B) help prevent a single firm from acquiring ownership of a key resource C) encourage creative activity D) discourage the production of inefficient products
C) encourage creative activity
if a firm in a perfectly competitive market triples the quantity of the output sold, then total revenue would: A) more than triple B) less than triple C) exactly triple D) any of the above depending on inputs
C) exactly triple
joans total cost revenue from pumpkins is: A) increasing at an increasing rate B) increasing at a decreasing rate C) increasing at a constant rate D) decreasing
C) increasing at a constant rate
economists assume that the typical person who starts their own business does so with the intention of A) donating the profits from their business to charity B) capturing the highest number of sales in her industry C) maximizing profits D) minimizing costs
C) maximizing profits
when policy makers set prices by legal decree, they.. A) are usually following the advice of mainstream economists B) improve the organization of economic activity C) obscure the signals that normally guide the allocation of society resources D) are demonstrating a willingness to sacrifice fairness for the sake of a gain in efficiency
C) obscure the signals that normally guide the allocation of society's resources
a payroll tax is a A) fixed number of dollars that every time firm pay to the government for each worker that the firm hires B) tax that each firm must pay to the government before the firm can hire workers and operate its business C) tax on the wages that firms pay their workers D) tax on all the wages above the minimum wage
C) tax on the wages that firms pay their workers
Patrice owns a travel agency. her accountant most likely includes which of the following costs on her financial statements? A) wages Patrice could earn giving tennis lessons B) dividends Patrice money was earning in the stock market before Patrice sold her stock and leased the space for her travel agency C) the cost of utilities for operating storefront D) both b and c are correct
C) the cost of utilities for operating storefront
which of the following is correct? A) the demand curve facing a completive firm is horizontal, as is the demand curve facing a monopolist B) the demand curve facing a competitive firm is downward sloping, whereas the demand curve facing a monopolist i horizontal C) the demand curve facing a competitive firm is horizontal , whereas the demand curve facing a monopolist D) the demand curve facing a competitive firm is downward sloping, as is the demand curve facing a monopolist
C) the demand curve facing a competitive firm is horizontal, whereas the demand curve facing a monopolist is downward sloping
an examples of an opportunity cost that is also an implicit cost A) lease payment B) cost of raw materials C) the value of the business owners time D) all of the above are correct
C) the value of the business owners time
what area measures deadweight loss? A) (B-F)*K B) 0.5[(P-O)*(L-O)] C) 0.5[(A-H)*(L-J)} D) 0.5[(B-F)*(L-K)]
D) 0.5[(B-F)*(L-K)]
which of the flowing is an example of a barrier to entry? 1: a key resource is owned by a single firm 2: the costs of production make a single producer more efficient than a large number of producers 3: the government has given the existing monopolist the exclusive right to produce the good A) 1 & 2 B) 2 & 3 C) 1 only D) 1,2,3
D) 1,2,3
suppose that for a particular firm the only variable input to production process is labor and that output equals to 0 when no workers are hired. in addition, suppose that the average total cost when 5 units of output are produced is 30, and marginal cost of the 6th unit of output is 60. what is the average total cost when 6 units are produced A) 10 B) 25 C) 30 D) 35
D) 35
suppose an increase in the price of rubber coincides with an advance in the technology of tire production. as a result of these 2 events, the demand for tires.. A) decreases, and the supply of tires increases B) is unaffected, and the supply of tires decreases C) is unaffected, and the supply increases D) none of the above is necessarily correct
D) none of the above is necessarily correct
when a monopolist is able to sell its product at different prices its engaging in.. A) distribution prices B) quality adjusted pricing g C) arbitrage D) price discrimination
D) price discrimination
when economists refer to a production cost that has already been committed and cannot be recovered, they use the term: A) implicit cost B) explicit cost C) variable cost D) sunk cost
D) sunk cost
(T/F) price controls often hurt those they are trying to help
True
(T/F) the goal of the minimum wage is to ensure workers a minimally adequate standard of living
True
under rent control, bribery is a mechanism to
brig price closer to equilibrium price
comparing firms in perfectly competitive markets to monopoly firms, which charges a price equal to marginal cost? A) perfectly competitive firms B) monopoly firms C) both D) neither
competitive firms
(T/F) a competitive market will typically experience entry and exit until accounting profits are 0
false
(T/F) a dairy farmer must be able to calculate the sunk cost in order to determine how much revenue the farm receives for the typical gallon of milk
false
(T/F) movie theaters charge different prices to different groups of people based on the different marginal costs that exist from group to group
false
(T/F) the average total cost curve is unaffected by diminishing marginal product
false
(T/F) when a tax is imposed on a good, the result is always a shortage of the good
false
which is a deadweight loss when comparing monopoly firms to competitive markets? A) competitive firms B) monopoly firm s C) neither D) both
monopoly firms
profit is defined as:
total revenue minus total cost
(T/F) a tax burden falls more heavily on the side of the market that is less elastic
true
(T/F) antitrust laws give the justice department the authority to challenge potential mergers between companies in an effort to safeguard society from monopoly power
true
(T/F) at the equilibrium price, the quantity that buyers want to buy exactly equals the quantity that sellers want to sell
true
(T/F) in the long run, a firm should exit the industry if its total costs exceed its total revenues
true
(T/F) the goal of the minimum wage is to ensure workers a minimally adequate standard of living
true
(T/F) the proper level of government intervention is unclear when dealing with a monopoly
true
(T/F) university financial aid can be viewed as a type of price discrimination
true
(T/F) when a monopolist increases the quantity that it sells, price decreases, which, all else equal, decreases total revenue; this is called the price effect
true
in the long run, when price is less than average total cost for all possible levels of production, a firm in a competitive market will choose to exit the market
true