Microeconomics Spring 2019

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Jamie is a sophomore in college and has a 2.75 cumulative grade point average (GPA). His cumulative GPA will be better next semester if he (i)performs better than he did last semester. (ii)performs better than his cumulative GPA. (iii)gives an average performance.

ii) only

oil spike

income effect

if the price of orange juice rises, the demand for grapefruit juice will

increase because the two goods are substitues

if the price of orange juice rises, the demand for apple juice will

increase because the two goods are substitutes

an increase in both equilibrium price and quantity could be produced by a(n)

increase in demand,with supply constant

an increase in quantity supplied can be caused by a(n)

increase in price

which of the following is most closely associated with normative economics

some economists believe that the government did right thing by bailing out the big Wallet Street banks in 2008

In the above figure, the point of elasticity occurs

somewhere between point c and d

If a student accidentally clicks on "_______" instead of clicking "________" then "________," she/he will lose the credits for the unfinished test.

submit, save, next page

goods a and b are

substitutes. 1.67

"as income rises, the demand for a product decreases." this statement

suggests that this good is inferior goods

Input of Labor # of workers Total Product # of outputs 1 20 2 66 3 116 4 176 5 206 6 226 In Table above, Diminish marginal product occurs after actually employing the

the 5th worker

if marginal utility is negative,

the consumer considers extra units of commodity to be a "bad"

an excess supply of rice in a competitive market would indicate that

the current price exceeds the equilibrium price

which is true

under perfect competition price equals marginal cost while monopoly price is greater than monopoly cost

which of the following would cause an economy to be producing at a point inside its production possibilities curve

unemployment and an inefficient use of available resources

which of the following would cause an economy to be producing at a point inside its production possibilities curve

unemployment and inefficient use of resources

If the cross-price elasticity of demand between two goods is negative, the the two goods

unrelated

In a competitive market, when price is below the equilibrium level, the price will be driven ______ due to

upward, excess demand

if the calculated elasticity between two points is 2.26, demand is considered

very elastic

if the calculated elasticity of demand between two points is 3.4, demand is considered,

very elastic

Johnny is a sophomore in college and has a 2.5 cumulative gpa, johnny's cumulative gpa will be better next semester if he

performs better than his cumulative gpa

price discrimination in the case of monopolist

physician services

Accounting profits are ___________ when the firm is at its short-run break-even point.

positive

accounting profits are the short-run break-even points are

positive

If goods X and Y are substitutes, then the cross elasticity of demand will be

positive.

sophomore in college 3.025, how can she get a worse cum gpa

preforms worse than her cum gpa

the law of supply says that

price and quantity supplied are directly related

if the government sets a maximum price that can be charged for a good or service, it thereby creates

price ceiling

When income is $100 per week, 20 units of good X are demanded. When income is $150 per week, 30 units of good X are demanded. The income elasticity of demand of good X equals to

1

a 50 percent rise of a price of a good leads to a 50 percent decrease in quantity demanded. the price elasticity of demand is

1.0

If an individual's income rises 40 percent and purchases of clothing rise 50 percent, the income elasticity for clothing by the individual is__-

1.25

if an individuals income rises 40 percent and purchases of clothing rise 60 percent, the

1.50

a price elasticity of 1.4 indicates that

10 percent decrease in price leads to a 14 percent increase in quantity demanded

If the price elasticity of demand is 2, a 5 percent decrease in price will increase quantity demanded by

10%

If the price elasticity of demand is -10, a 10 percent decrease in price will increase quantity demanded by

100 percent

In a perfectly competitive market, if P > ATC in the short run, there is apt to be

entry of new firms into the market.

Which of the following statements about a firm's short-run variable costs is TRUE

They typically include the labor cost.

Assume that 10 units of labor are needed to produce 4 units of output. If the price of labor is spent $6 per unit, and if fixed costs are $60, then what is the average variable cost of 4 units per output?

$15

profit-maximizing charged for goods is produced $10. intersection of marginal revenue

$30

Assume that 10 units of labor are needed to produce 4 units of output. If the price of labor is $6 per unit, and if fixed costs are $50, then what is TVC and AVC at 3 units of output?

$45, $15

Yao Ming graduates from college with a choice of playing professional football at $2 million a year or coaching for $50,000 a year. He decides to play football, but eight years later he quits football to be a TV star for $3 million a year. His opportunity cost at graduation was ______ and eight years later was ______.

$50,000; $2 million

Bill Bonecrusher graduates college with a choice of playing professional football at a $2 million dollar a year or coaching for $50,000 a year. He decides to play football but eight years later he quits to make a movie for $3,000,00 a year. His opportunity cost at graduating___

$50,000; 2 million

According to Table below, what is the price elasticity of demand (using Midpoint method) when price rises from $7 to $8?

) 1.5

When the price of chicken is $2.00/lb, the quantity demanded for hamburger is 50 units, when the price of chicken is $3.00lb, the quantity demanded of hamburger is 60 units. the cross price elasticity of demand between chicken and hamburger is

+5/11

When price is $5 per unit, quantity demanded is 12 units. When price is $6 per unit, quantity demanded is 8 units. The value of price elasticity of demand is approximately (before take absolute value)

-11/5

When price is $5 per unit, quantity demanded is 10 units. When price is $8 per unit, quantity demanded is 6 units. The value of the price elasticity of demand is approximately (before taking absolute value)

-13/12.

When price is $5 per unit, quantity demanded is 12 units. When price is $8 per unit, quantity demanded is 6 units. The value of the price elasticity of demand is approximately (before taking absolute value)

-13/9

The prices of the goods and the consumer's income are always assumed constant as we move along the budget line, if any one of them changes, the budget line will change as well

...

Trade off consumers are able t make between one good or another.

...

a consumers budget constraint identifies which combinations of goods and services the consumer can afford with a limited budget, at given prices

...

a decrease in the price of a good rotates the budget line upward

...

an increase in income shifts the budget line rightward, with no change in slope

...

an increase in income will shift the budget line upward and rightward, a decrease in income will shift the budget line downward and leftward. These shifts are parallel, changes in income do not affect the budget line's slope

...

budget line is the graphical representation of a budget constraint showing the maximum affordable quantity of one good for given amounts of another good

...

if the absolute value of the price elasticity of the demand of a product is greater than 1, then demand price is elastic

...

if the price of food rises, holding all other prices and money income constant for miss. bucana, she will adjust her expenditures and reach an equilibrium on a lower indifference curve

...

the consumers will always choose a point on the budget line rather than a point below it

...

when the price of a good changes, the budget line rotates. both its slope and one of its intercepts will change

...

while a decrease in the price of other good rotates it rightward

...

Table 1901A Bob's Marginal Utility for consuming beer and pizza with $8.00 in income. Q of Marginal Q of Marginal Pizza Utility Beer Utility 1 45 1 40 2 40 2 40 3 30 3 35 4 15 4 10 5 -5 5 0 According to Table 1901A, how much total utility does Bob get from 3 pieces of pizza?

115 units

According to Table, how much total utility does Bob get from 4 pieces of beer? Q of Marginal Q of Marginal Pizza Utility Beer Utility 1 45 1 40 2 40 2 40 3 30 3 35 4 15 4 10 5 -5 5 0

125 utils

a patent provides protection

17 years

According to Table on Q#1, what is the price elasticity of demand if price falls from $8.50 to $8.00 (while Quantity rises from 40 to 45)? (Use % change equation only)

17/8

when income is $100 per week, 20 units of good x are demanded. When income is $150 per week, 20.... demanded. The income elasticity of demand of good x equals to

1?????? price elasticity of demand equ midpoint

if the price elasticity of demand is 4, a 5 percent decrease in price will increase quantity .....

20%

MR quantity at 3

23

if the price of elasticity demand is -5, a 5 percent decrease in price will increase quantity demanded by

25 percent

price at quantity 2

32

average revenue at quantity 1

35

Suppose that the best investment you could make with $100,000 in cash is to purchase a government T bond that pays 4.85% a year. The opportunity cost for this investment is

4,850

a certain athlete loves donuts. he receives 100 units of utility for the first donut, an additional 80 for the second, an additional 60 for the third, another 40 for the fourth, and another 20 for the fifth. The marginal utility of the fourth donut is ____ and the total utility from consuming four donuts is _____

40; 280

when the price of beef is $2 per pound the quantity demanded of hamburger is... the price of beef is $3. The quantity demanded is 60 units... price elasticity of demand bewtween beef and burger is

5/11

if the monopolist wants to maximize his revenue, how many units of his product should it sell

6

What is price elasticity of demand when price rises from $8.50 - $9

7/3

new york knicks...5 million a year... 70,000...300,000

70,000 , 5 million

suppose that the best investment you could make with 100k is cash is to purchase tbond that pays x percent interest per year. if you decide to invest the money in your own business instead of buying the government tbond the opportunity cost of forgoing this financial investment is

7000 per year

TR at quantity 3

87

the profit maximizing price for the monopolist is

A

The statement that "Netflix's stock closed at $194" on 10/20/2017 is

A positive statement

If a dinner guest were serious when claiming that he just could not get enough of your homemade Kimchi (a Korean preserved appetizer) and that the more he ate the more he wanted, you would conclude that for him the marginal utility of Kimchi was

A) increasing.

curve represents long run average cost

ATC d

marginal revenue curve for a monopolist is

B

Despite the fact that water is necessary to sustain life, it is less expensive than soda pop. Economic theory suggests that this is so because

B) although the total utility of water consumption is high, its marginal utility is low when compared to soda pop.

marginal cost curve for a monopoly firm is

C

The marginal rate of substitution is measured along

C) a given indifference curve.

When the price of gold rises, there will be

C) a movement along the good's supply curve.

Total Utility Data Table Quantity per Week Michelle Robert David Lauren 0 0 0 0 0 1 5.0 1,000 60 60 2 9.9 1,900 120 130 3 14.7 2,700 180 220 4 19.4 3,400 240 310 5 24.0 4,000 300 425 6 28.5 4,500 360 575 7 32.9 4,900 420 900 8 37.2 5,200 480 1,275 9 41.4 5,400 540 1,770 According to Table 1903A, David's utility schedule is characterized by

C) constant marginal utility.

If the absolute value of the price elasticity of demand for for a product is greater than 1, then

C. Demand is price elastic

The fact that consumers will purchase more of a good that has become relatively cheaper

C. is called the price substitution effect

A line showing feasible combinations of two goods that a consumer could afford given his money income is the

D) budget constraint.

The price elasticity of demand is defined as

D. The responsiveness of quantity demanded to a change in price

if an individual consumes only two goods and consumption of one good increases, then in order to keep the consumer on the same indifference curve,consumption of the other good must

Decrease

An increase in a company's total revenue (TR) for a product will result if

Demand is inelastic and price increases

Which of the following statements is false?

Economies of scale only applies to short run.

maximum profits possible for a monopolist that charges one price to the customers all over the area

GQyt

if irene graduated from Channel Island State and found a $45,000 annual income job last year and she projected that her 2017 income will be $50,000. What's Irene's income growth rate from 2014 to 2017? (round up the answer if needed)

Increasing by 11%

firms in a competitive industry are producing goods efficiently in the long run if each is producing at the minimum

LRAC curve

Firms in a competitive industry are producing goods efficiently in the long run if each is producing at the minimum point of the

LRAC curve.

Which of the following is NOT true for a perfectly competitive firm in the long run?

MC > AC

not true for a competitive firm in the long run

MC>AC

In equilibrium, which of the following conditions is common to both pure monopoly and pure competition?

MR = MC

Unregulated monopoly and pure competition

MR=MC

If this firm produces output level Q2, it has average variable cost of

OE

In the above figure, the output level of Q1 total variable costs is

OF times Q1

At a competitive firm's short-run break-even price,

P=ATC

competitive firms short-run break-even price

P=ATC

Rational preferences

Preferences that satisfy two conditions 1. any two alternatives can be compared and one is preferred or else the two are valued equally 2. the comparisons are logically consisted or transitive

If Py is the price of the good on the vertical axis and Px is the price of the good on the horizontal axis then

Px/Py= the relative price of the good X, opportunity cost of one more unit of good X, the absolute value of the slope of the consumer's budget line

Equation for Budget Line

PxQx + PyQy =B

The long-run supply curve for a firm in a perfectly competitive market is

The competitive firm's long-run supply curve is the portion of its MC curve that lies above ATC

Some costs do not vary with the quantity of output produced. Those costs are called

Total Fixed Costs

Once an online test was launched by a student, it's a point of no-return. There isn't anything the instructor can alter technically. There will be no grade compensations in such regards (when you lose your connectivity, or experiencing a frozen PC, or other careless/subjective mistakes, such as hitting the "submit" w/o finishing the entire test, etc.).

True

of the following, which could cause the demand curve for at&t iphone to shift to the left

a cheaper 2-year service plan by verizon's iphone

Both Supply and Demand decrease will result in

a decrease in equilibrium quantity and an unknown in equilibrium price

all of the following except one would increase the amount of Ford-F150 that buyers would like to buy. which is the exception

a decrease in the price of steel

which of the following would shift the demand curve for regular vanilla ice cream, which is assumed to be a normal good, to the left?

a favorable change in tastes toward blueberry ice cream

the marginal rate of substitution is measured along

a given indifference curve

the statement that "google's stock closed at $712" on 1/22/2016 is

a positive statement

utility

a quantitative measure of pleasure or satisfaction obtained from consuming goods and services

Refer to Table 3-5. If England and Spain trade based on the principle of comparative advantage, England will export

a. bread and Spain will export cheese.

Microeconomics is the study of

a. individual decision-makers.

which line represents monopolist price

ab

in a competitive market that is characterized by free entry and exit

all firms will operate in efficient scale in the long run

Which of the following is assumed constant along the demand curve for gasoline?

all variables affecting demand other than the price of gasoline

despite the fact that water is necessary to sustain life, it is less expensive than soda pop, economic theory suggests that this is so because

although the total utility of water is consumption is high, its marginal utility is low when compared to soda pop

which of the following would be strictly microeconomic topic

an increase in the price of the Ford Focus GT

which of the following would shift the demand curve for new college textbooks to the right?

an increase in the price of used college textbooks

if the demand if a good is inversely related to income, it must be

an interior good

strawberries

helped

to maximize profits it will produce at output level

b where mc and avc clash

The fact that consumers will purchase more of a good that has become relatively cheaper

is called the price-substitution effect.

The Great Recession brought the income of buyers in US decline and it also brought reduction in resource(input) prices worldwide. What would we expect to occur on equilibrium price and quantity of a normal good in the US market?

b. the equilibrium price would decrease, but the impact on the equilibrium quantity in the market would be ambiguous.

If we are graphing total utility, then the total utility curve will

be increasing as long as marginal utility is positive

if we are graphing total utility, then the total utility curve will

be increasing as long as marginal utility is positive

a line showing feasible combinations of two goods that a consumer could afford given his money income is the

budget constraint

Labor hours needed to make one unit of Amount produced in 40 hours Cheese Bread Cheese Bread England 1 2 40 20 Spain 2 8 20 5 Refer to Table 3-5. England has an absolute advantage in

d. both goods and Spain has a comparative advantage in cheese.

If the calculated elasticity of demand between two points is 1.22, demand is considered

elastic.

If the incomes of Japanese buyers decline and somehow there is also a reduction in all resource (input) prices. What would we expect to occur on equilibrium price and quantity of an inferior good in the US market?

c. the equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous

price taker

cannot influence the price

A price taker is someone who

cannot influence the price.

during the short run the firm cannot

change its plant size

Suppose the cross price elasticity demand between blue ray and dvd is -1.32 that indicated that these two products are

complements

Total Utility Data Table Quantity per Week Michelle Robert David Lauren 0 0 0 0 0 1 5.0 1,000 60 60 2 9.9 1,900 120 130 3 14.7 2,700 180 220 4 19.4 3,400 240 310 5 24.0 4,000 300 425 6 28.5 4,500 360 575 7 32.9 4,900 420 900 8 37.2 5,200 480 1,275 9 41.4 5,400 540 1,770 According to Table 1903A, David's utility schedule is characterized by

constant marginal utility

a monopolist

is constrained in its price decisions by the demand curve it faces

If an individual consumes only two goods and consumption of one good increases, then in order to keep his consumption level on the same indifference curve, his consumption for the other good must

decrease

if an individual consumes only two goods and consumption of one good increase then in order to keep the consumer on the same indifference curve, consumption of the other good must

decrease

if an individual consumes only two goods and consumption of one good increases, then in order to keep the consumer in the same indifference curve , consumption on the other good must__

decrease

if an individual consumes only two goods and consumption of one good increases, then in order to keep the consumer on the same indifference curve, consumption of the other good must

decrease

A decrease in the price of a commodity results in a(n)

decrease in quantity supplied

a decrease in the price of commodity results in a(n)

decrease in quantity supplied

Blue-ray DVD and its player are complementary goods. An increase in the price of Blue-ray DVDs results in a(n)

decrease in the demand for Blue-Ray DVD players

orange juice and cranberry juice are substitute goods. an increase in the price of orange juice will result in a(n)

decrease in the quantity demanded of cranberry juice

a perfectly competitive firm faces the following short-run cost and revenue conditions

decrease output

Suppose a perfectly competitive firm faces the following short-run cost and revenue conditions: ATC > AVC; MC > MR. The firm should

decrease output.

an increase in total revenue will result if

demand is inelastic and price increases

if the firm lowers its price of its product and as a result total revenue falls, we can conclude that

demand is inelastic in its price range

Which of the following is most closely associated with positive economics?

determining the impacts from government stimulus on the actual level of total employment

monopolist faces demand curve

downward sloping

the price elasticity of demand would be lowest for

drinking water

in a perfectly competitive market, if P>ATC in the short run, there is apt to be

entry of new firms into the market

if the price is equal to p4

earn positive profits

statement is false

economies of scale in short run concept

the longer the time frame involved, the more likely it is the demand be relatively

elastic

the longer time frame involved , the more likely it is that the demand will be relatively

elastic

demand curve of a perfectly competitive firm is

perfectly elastic

if the income of american buyers decline and somehow there is also a reduction in all resource (input) prices. what would we expect to occur on equilibrium price and quantity of an inferior good in the us market

equilibrium price decrease ??

an increase in demand along with a decrease in supply will result in

equilibrium price will rise and equilibrium quantity is undetermined

not an example of price discrimination

everyone pays the same price for a good

encouraging firms to invest in R/D and individuals to engage in creative endeavors such as new drug formula

exclusive rights assigned by government monopolies

marginal utility describes

extra utility for each additional good consumed

if the price elasticity of demand for good y is .75 when there is a 30 percent increase in price we can be sure that quantity demanded

fell by 22.5 percent

if the price elasticity of demand for good y is .75, when there is a 30 percent increase in price, we can be sure that quantity demanded

fell by 22.5 percent

In Table above, diminish marginal product occurs after actually hiring the

fifth

faces the following conditions: ATC>AVC; MC<MR

firm should increase output

cost doesnt vary with quantity of output produced

fixed costs

which of the following would be strictly a microeconomics topic

ford taurus

In Table above, diminish marginal product occurs after the

fourth

it is correct to state that a society which is on its production possibilities curve is

fully utilizing its productive resources

The opportunity cost of each additional computer in terms of televisions

increases as more computers are produced

as an individual consumes more of a particular commodity the total level of utility derived from that consumption usually

increases at a decreasing rate

as an individual consumes more of a particular commodity, the total level of utility derived from that consumption usually

increases at a decreasing rate

As an individual consumes more of a particular commodity, the total level of utility derived from that consumption usually

increases at a decreasing rate.

If a dinner guest is serious when claiming he just could not get enough of your homemade kimchi and that the more he ate the more he wanted, you would conclude that for him the marginal utility of kimchi was

increasing

If marginal utility is positive but decreasing, total utility is

increasing

if marginal utility is positive but decreasing, total utility is

increasing

if we are graphing total utility, then the total utility curve will be

increasing as long as marginal utility is postive

If the cost of producing each performance of a Raider's game is constant and the demand of tickets is inelastic, profits could be maximized by

increasing ticket prices

if the cost of producing each performance of a raiders game is constant and the demand for tickets is inelastic, profits could be maximized by

increasing ticket prices

If the cost of producing each performance of a Lake Game show is constant and the demand for tickets is inelastic, profits could be maximized by

increasing ticket prices.

the long run average cost curve

is a curve which is tangent to each number of a set of short-run average cost curves

at a price of $5.00 per doll, most stores cannot keep ferbi dolls in stock because consumers buy them all as soon as shipments arrive. this implies that there

is an excess demand for ferbi, and the price must rise for equilibrium to be reached

the fact that consumers will have spend more on gasoline during a world oil price spike and less on other goods and services they usually purchase for their daily life. this microeconomic phenomenon

is called price-substitution effect

the fact that consumers will purchase more of a good that has become relatively cheaper

is called price-substitution effect

The fact that consumers will purchase more of a good that has become relatively cheaper

is called the price substitution effect

the fact that consumers will purchase more of a good that has become relatively cheaper

is called the price substitution effect

The fact that consumers will have to spend more on gasoline during a world oil price spike and less on other goods and services they usually purchase for their daily life. This microeconomic phenomenon

is called the price- substitution effect

The fact that consumers will have to spend more on gasoline during a world oil price spike and less on other goods and services they usually purchase for their daily life. This microeconomic phenomenon

is called the price-substitution effect.

if a firm is price discriminating we know that

it has market power

At the short run break-even point, the competitive firm is

just covering its total variable costs.

single plant firm trying to select the appropriate sized plant for a particular rate of output will choose the size plant with the

lower fixed cost

If the price elasticity of demand for orange is greater than 1, an increase in orange prices will

lower total revenue

if the price elasticity of demand for orange is greater than 1, an increase in orange prices will

lower total revenue

short-run break-even point, the competitive firm is

making zero economic profits

in the short run, the additional output the results from hiring an additional unit of a variable input is the __

marginal (physical) product

In the short run, the additional output that results from hiring an additional unit of a variable input is the

marginal (physical) product.

The cost of producing an additional unit of output is the firm's

marginal cost

the cost of an additional output in the firm is

marginal cost

the cost of producing an additional unit of output is the firm's

marginal cost

short-run supply curve for a firm in a perfectly competitive market

marginal cost curve

long run supply curve

marginal cost curve above average total cost

short run supply curve for perfectly competitive market

marginal cost curve above average variable cost

in the short run, the additional output that results from hiring an additional unit of a variable input is the

marginal physical product

the change in total revenue divided by the change in quantity produced is the definition for

marginal revenue

which of the following statements about markets is false

markets are used to allocate resources in centrally-planned socialist economic systems

A basic tenet of the of the theory of the firm is that the firm's primary objective is to __

maximize profits

a basic tenet of the theory of the firm is that the firm's primary objective is to maximize

maximize profits

cumulative gpa

perform better than his cumulative gpa

short-run break-even output occurs at

minimum price of its ATC curve

profit maximizing behavior of a monopoly is different from a perfectly competitive firm

monopoly can control the desired price level of output to maximize profits but a perfect comp can only control desired output

the demand curve for petroleum shoul dbe

more elastic in the long run than in the short run

The demand curve for oil should be

more elastic in the long run than in the short run.

for a monopolist, marginal revenue is less than price

must lower price on all units sold

a single firm can supply a single product to an entire market

natural monopoly

If goods X and Y are complements, then the cross elasticity of the demand will be

negative

if goods x and y are complements then the cross elasticity of demand will be

negative

the implicit cost incurred by a firm to use its resources to produce its output is the firm's

opportunity cost

the productions possibility curve bows outward because

opportunity costs are increasing as a production of a good increases

A diseconomy of scale indicates that a firm is producing its ______ at a ______ ATC.

output, higher

a goods price elasticity of demand can be calculated by using the formula

percentage change in quantity demanded divided by percentage change in price

A good's price elasticity of demand can be calculated by using the formula

percentage change in quantity demanded divided by percentage change in price.

The fact that consumers will have to spend more on gasoline during a world oil price spike and less on other goods and services they usually purchase for their daily life. This microeconomic phenomenon

price substitution

under a market system of resource allocation

prices determine both what firms produce and what consumers buy

suppose MR. Joe"Big's" ratios of marginal utility of beer to the price of beer and the...pizza are equal. If the price of beer increases, he will

probably consume less beer and more pizza

suppose mr joe's "Big"'s ratios of marginal utility of beer to the price of beer and the marginal utility of pizza to the price of pizza is equal. if the price of beer increases, he will

probably consume less beer and more pizza

patent on a product gives firm

protection from having invention copied

wheat

quantity at which market price is equal to the farm's marginal cost of production

According to the above figure, a shortage will occur where

quantity demanded exceeds quantity supplied

lemonade

raise price to increase total revenue

if the price of food rises holding all other prices and money income constant for miss bucanna she will adjust her expenditures and

reach an equilibrium on a lower indifference curve

if the price of food rises holding all other prices and money income constant for mr smith she will adjust her expenditures and

reach an equilibrium on a lower indifference curve

if the price of food rises holding all other prices and money income constant for mr. zhang he will adjust his expenditures and

reach an equilibrium on a lower indifference curve

if the price of food rises, holding all other prices and money constant for Mrs. Wang, she will have to adjust her expenditures

reach an equilibrium on a lower indifference curve

If the price of food rises, holding all other prices and money income constant for Mrs. Wang, she will have to adjust her expenditures and

reach an equilibrium on a lower indifference curve.

if the price of food rises, holding all other prices and money income constant for Mr. Wang, he will adjust his expenditures and

reach an equilibrium on a lower indifference curve.

when the marginal cost curve is above the average cost curve, the average cost curve is__

rising

when the marginal cost curve is above the average cost curve, the average cost curve...

rising

price discrimination

selling a given product at more than one price when the price is unrelated to cost differences

price ceilings set below the equilibrium price cause

shortages

A firm is currently producing at the rate of output that just barely covers its variable costs. If demand falls, the firm should

shut down

a firm is currently producing at the rate of output that just covers variable costs. if demands falls

shut down

if price is equal to p1

shut down

for a competitive firm, any output price below its AVC is

shut down price

For a competitive firm, any output price below its minimum AVC is its

shut-down price.

a movement along the production possibilities curve would imply that

society has chosen a different set of outputs

a movement along the productions possibility curve would imply that

society has chosen a different set of outputs

A movement along the production possibilities curve would imply that

society has chosen a different set of outputs.

the great recession brought the incomes of buyers in the US decline and it also brought reduction in resource worldwide . what would we expect to occur in equilibrium price and quantity of a normal good in the US market?

the equilibrium price would decrease but the impact on the equilibrium quantity in the market would be ambiguous

the great recession brought the income of buyers in US decline and it also brought reduction in resource (input) prices worldwide. what would we expect to occur on equilibrium price and quantity of a normal goof in the US market?

the equilibrium price would decrease, but the impact on the equilibrium quantity in the market would be ambiguous

the great recession brought the incomes of buyers in us decline and it also brought reduction is resource prices worldwide. what would we expect to occur on equilibrium price and quantity of a normal good in the us market

the equilibrium price would decrease, but the impact on the equilibrium quantity in the market would be ambiguous

If the incomes of American buyers decline and somehow there is also a reduction in all resource (input) prices. What would we expect to occur on equilibrium price and quantity of an inferior good in the US market?

the equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous

If the incomes of American buyers decline and somehow there is also a reduction in all resource (input) prices. What would we expect to occur on equilibrium price and quantity of an inferior good in the US market?

the equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous

A shift of the production possibilities curve outward could imply that

the labor productivity has grown.

Thirst Thelma owns and operates a small lemonade stand. When Thelma is producing a small quantity of lemonade she has few workers and her equipment is not fully being utilized. Because she can easily put her idle resources to use

the marginal cost of one more glass of lemonade is small

regretting a last unit of consumption of a good (a cake) implies that

the marginal utility of the last unit consumed was negative

when an entrepreneur invests his own financial capital in order to start a business

the opp cost of capital should be included in the economic cost of doing business

When an entrepreneur invests his own financial capital in order to start a business,

the opportunity cost of capital should be included in the economic cost of doing business.

when a business man invests his own financial capital to start a business

the opportunity cost of capital should be included in the economic cost of doing the business

the minimum possible short run average costs are equal to long run average costs when

the plant is producing at its short run minimum point

the minimum possible short run avg costs are equal to long run avg costs when

the plant is producing at its short run minimum point

The minimum possible short-run average costs are equal to long-run average costs when

the plant is producing at its short-run minimum point.

a perfect competitor marginal revenue equals

the price

If we divide one money price by another money price, we get what is called a relative price

the price of one good relative to the other

For a perfectly competitive market, marginal revenue equals

the price.

The Great Wall Farm sells wheat to a grain broker in outskirts of Beijing, China. Since the market for wheat is generally considered to be competitive, the Farm maximizes its profit by choosing

the quantity at which market price is equal to the farm's marginal cost and marginal revenue of production.

monopolist maximize profits by

the rate of output where marginal revenue equals marginal cost

price elasticity of demand measures

the responsiveness of quantity demanded to a change in price

since the producers must be compensated for the rising opportunity cost that accompanies increase in output,

the supply curve usually slopes upward

in economics, utility is defined as

the want-satisfying power of a good or service

when regulating a natural monopoly, one of the problems with setting price equal to average cost is

there is no incentive to lower cost, consumer surplus is not maximized, total surplus is not optimized

Some costs do not vary with the quantity of output produced. Those costs are called

total fixed cost

Some costs do not vary with the quantity of output produced. Those costs are called

total fixed costs

some costs do not vary

total fixed costs

economic profit is equal to

total revenue minus explicit and implicit costs

Accounting profit is equal to

total revenue minus explicit costs.

Total Utility Data Table Quantity per Week Michelle Robert David Lauren 0 0 0 0 0 1 5.0 1,000 60 60 2 9.9 1,900 120 130 3 14.7 2,700 180 220 4 19.4 3,400 240 310 5 24.0 4,000 300 425 6 28.5 4,500 360 575 7 32.9 4,900 420 900 8 37.2 5,200 480 1,275 9 41.4 5,400 540 1,770 According to Table 1903A, Robert's utility schedule is characterized by

total utility that increases at a decreasing rate

deadweight loss due to monopoly pricing

triangle bge

the opportunity cost of any action is

what is sacrificed to purse that action

at which of the following circumstance will average variable cost equal average total cost

when average fix cost approach zero

At what productive circumstance, a firm's AVC will converge with (approach to) average total course curve (ATC)

when average fixed cost approach zero

At what productive circumstance, a frim's AVC will converge with (approach to) average total course curve (ATC)

when average fixed cost approach zero

A single-plant firm trying to select the appropriate-sized plant for a particular rate of output will choose the size plant

whose short-run average total cost curve is lowest at that rate of output.

A single-plant firm trying to select the appropriate-sized plant for a particular rate of output will choose the size plant

whose short-run average total cost curve is lowest at that rate of output.

opec

world wide oil embargo. elastic


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