Microeconomics Quiz 3
Given the data provided in the table below, what will the marginal revenue equal for the production at quantity (Q) level 4?
$5
In the United States, a pharmaceutical company's exclusive patent rights last for _______________.
20 years
Refer to the table below. The information pertains to the demand curve and the average cost curve for a natural monopoly firm. What will the price be in this market?
50
An _________________ is calculating by subtracting the firm's cost from its total revenue. _____________________.
Accounting profit; excluding opportunity cost
The form of legal protection intended to prevent reproduction of original works is referred to as ______________ law.
Copyright
If a firm is experiencing _____________________, then as the quantity of output rises, the average cost of production also rises.
Decreasing returns to scale
Copyright protection legislation provides protection for regional works:
During the author's life plus 70 years.
A firm's _________________ consists of expenditures that must be made before production starts that typically, over the short run, ________________ regardless of the level of production.
Fixed costs; do not change
A natural monopoly occurs when the quantity demanded is ____________________ the minimum quantity it takes to be at the bottom of the long run average cost curve.
Less than
In economics, a firm that faces no competition is referred to as ________________.
Monopoly
The use of sharp temporary price cut 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 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 accept the prevailing market price for its product.
Price taker
A monopolist is able to maximize his profit by:
Producing output where MR = MC and charging a price along the demand curve
Refer to the above diagram. Which of the following explains the slope of the total revenue curve illustrated in this graph?
The slope of the total revenue curve is explained by both A and B above.
_____________________ include all spending on labor, machinery, tools, and supplies purchased from other firms.
Total costs
Refer to the above diagram. In this instance, at the range of output representing at Point B.
Total costs exceed total revenue
_________________ is calculated by taking the quantity of everything that is sold and multiplying it by the sales price.
Total revenue
In the business world, a ___________________ is recognized as a legally acceptable way for any business to keep knowledge of its particular methods of production from being known by its competing firms.
Trade secret
If a paper mill shuts down its operations for 3 months, its __________________ will be reduced to zero?
Variable costs
______________ include all of the costs of production that change as the level of production changes.
Variable costs
The graph above illustrates the total cost function for GoodieCookie Co. How are the company's fixed costs represented in this graph?
as the point where the total cost curve touches the vertical axis.
In order to determine _____________________, the firm's total cost must be divided by the quantity of its output.
average cost
By 2007, US market deregulation has proven to be most toxic to the overall health of the US economy in the ________________________ .
banking sector
Occasionally, _________________ may lead to pure monopoly; in other market conditions, they may limit competition _________________ .
barriers to entry; to a few oligopoly firms
For a monopolistic firm, the demand for its product is:
completely inelastic
Intellectual property law is a body of law that includes:
copyright legislation, as well as all of the above
Which of the following falls outside the classification of business expenditures that fall into the category of variable costs?
costs of research and development
______________________ occur when the marginal gain in output diminishes as each additional unit input is added.
diminishing marginal returns
The term __________________ describes a situation where the quantity of output rises, but the average cost of production falls.
economies of scale
_________________ arises where many firms are competing in a market to sell similar but differentiated products.
monopolistic competition
The term __________________ is used to describe the additional cost of producing one more unit.
marginal cost
Under perfect competition, any profit-maximizing producer faces a market price equal to its
marginal cost
__________________ refers to the additional revenue gained from selling one more unit.
marginal revenue
Roughly speaking, patent law covers __________ and __________ law protects an author's original books.
original inventive creations; copyright
Government ______________ regulations specify that inventors will maintain exclusive legal rights to their respective inventions for ______________ .
patent; a limited time
Firms operating in a market situation that creates ___________________, sell their product in a market with other firms who produce identical or extremely similar products.
perfect competition
A firm that holds a monopoly position in the market place is ___________________.
price maker
Refer to the diagram above. In this instance, at the range of output represented at Point C, ______________________.
profits will be maximized.
In the _______________, the perfectly competitive firm will seek out _______________.
short run; a quantity of output where profits are highest
If a firm's revenues do not cover it's average variable costs, then the firm has reached its _______________.
shut down point
Given the data provided in the table below, the total revenue (TR) for production at quantity (Q) level 4 equals
$20
