econ final
the firm's maximum profit is
$0
an industry has average variable costs of $1 and average total costs of $3 when it produces 500 units of output. the firm's total fixed costs equal
$1,000
the markup over marginal cost amounts to
$50
the maximum value of total revenue corresponds to a price of
$50
monopolistically competitive firms change in this market
$80
the DWL associated with this tax amounts to
$80, and this figure represents the surplus that is lost because the tax discourages mutually advantageous trades between buyers and sellers
suppose a firm in a competitive market earned 1,000 in total revenue and had a marginal revenue of 10 for the last unit produced and sold. what is the average revenue per unit, and how many units were sold
10 and 100 units
which of the following inequalities is correct
1000<Optimum<market
the tax revenue for the government would amount to
2,000
what is the increase in producer surplus to existing producers
2,500
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2.8
if the price elasticity of demand for a good is 2.0, then a 10 percent increase in price results in a
20 percent decrease in the quantity demanded
-
401
the socially optimal quantity of output is
420 units, since the value to society of the 420th unit is equal to the cost incurred by the seller of the 420th unit
-
900
at equilibrium, the producer surplus is represented by the area
D+H+F
what price will the monopolist charge to maximize profit
K
a profit maximizing monopoly will produce an output level of
Q3
which of the following statements is correct
W and Z
the firm is in
a short run equilibrium as well as a long run equilibrium
a government imposed price of $24 in this market is an example of
binding price floor that creates a surplus
a tax on the buyers of cameras encourages
buyers to demand a smaller quantity at every price
suppose that in a particular market, the supply curve is highly elastic and the demand curve is highly inelastic. if a tax is imposed in this market, then the
buyers will bear a greater burden of the tax than the sellers
a movie theater can increase its profit through price discrimination by charging a higher price to adults and lower price to children if it
can prevent children from buying the lower priced ticket and selling them to adults
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composition, typesetting, jacket design
levels of output between M and N, the firm experiences
constant returns to sale
what happens to consumer surplus in the cell phone market if cell phones are normal goods and buyers of cell phones experience an increase in income?
consumer surplus may increase, decrease, or remain unchanged
if the firm is currently producing 14 units (MC = 7 and MR = 7) what would you advise the owners?
continue to operate at 14 units
to maximize its profit, the firm should
decrease its output but continue to produce
equilibrium price must decrease when demand
decreases and supply does not change, when demand does not change and supply increases, and when demand decreases and supply increases simultaneously
it is aparent that
demand for the good conforms to the law of demand
if three kids value a park bench at $20, $30, and $40 and the installation cost is $100, what should the neighborhood do they are the only valuers of the bench
do not install the park benches because the costs outweigh the benefits
if government regulation sets the maximum price for a natural monopoly equal to its marginal cost, then the natural monopolist will
earn economic losses
suppose the number of buyers in a market increases and a technological advancement occurs also. what would we expect to happen in the market
equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous
a firm that shuts down temporarily has to pay
fixed costs but not variable costs
the shift from S to S' could be caused by
improvement in production technology
if the government removes a binding price ceiling from a market, then the price paid by buyers will
increase, and the quantity sold in the market will increase
private decisions about consumption of common resources and production of public goods usually lead to an
inefficient allocation of resources and external effects
-
inelastic s n d
total revenue
largest area of the dotted line
an example of an explicit cost of production would be the
lease payments for the land on which a firm's factory stands
which can be inferred from the figure above
marginal product is increasing at a low level of output and decreasing at a high level of output
motor oil and gasoline are complements. if the price of motor oil increases, consumer surplus in the gasoline market
may increase, decrease, or remain unchanged
-
mayor inelastic, city manager elastc
in which of the following market structures can firms earn economic profits in the long run
monopoly only
which one of these is correct
one half of the burden of the tax will fall on buyers, and one half of the burden of the tax will fall on sellers
for which pairs of goods is the cross-price elasticity most likely to be positive
pens and pencils
for a monopoly, the socially efficient level of output occurs where
price equals marginal cost
the externality could be internalized if producers of gasoline were
required to pay a tax of 0.45 a gallon
to maximize social surplus, a benevolent social planner would choose which of the following outcomes
right in the middle of the big X
-
surplus of 25
for a good that is a luxury demand
tends to be elastic
if a competitive firm is selling 900 units of its product at a price of $10 per unit and earning a positive profit, then
the average total cost is less than $10
if a price floor is not binding, then
the equilibrium price is above the floor
if a sawmill creates too much noise for local residents
the government can raise economic well being through noise control regulations
in some cases, tradable pollution permits may be better than a corrective tax because
the government can set a maximum level of pollution using permits
firms would be encouraged to enter this market for all prices that exceed
the intersection of MC and ATC
producers have little incentive to produce a public good because
there is a free rider problem
this market
would be more efficient with a tax on the product
all else equal, an increase in the use of laptops for note-taking would cause a move from
y to x
