econ hw 9

12) If new firms enter a perfectly competitive industry, the market supply A) becomes more price inelastic. B) decreases because each firm produces less than before the entry. C) increases. D) does not change.

increases

25) A natural monopoly that is regulated to set price equal to marginal cost A) makes an economic profit. B) makes zero economic profit. C) incurs an economic loss. D) makes zero normal profit.

incurs an economic loss

48) In the long run, a perfectly competitive firm will A) produce but incur an economic loss. B) make zero economic profit. C) not produce and will incur an economic loss equal to its total fixed cost. D) be able to make an economic profit.

make zero economic profit.

4) A market is classified as monopolistically competitive when A) many firms produce the same product. B) there is a barrier that blocks entry by other firms. C) a small number of firms compete. D) many firms produce a slightly differentiated product.

many firms produce a slightly differentiated product.

45) The characteristics that describe a perfectly competitive industry include A) a few firms selling to many buyers. B) many firms selling an identical product. C) one firm selling to many buyers. D) many firms selling a slightly differentiated product.

many firms selling an identical product.

27) A firm in perfect competition is a price taker because A) there are no good substitutes for its good. B) it's demand curve is vertical at the profit-maximizing quantity. C) its demand curves are downward sloping. D) many other firms produce identical products.

many other firms produce identical products

47) The firm's supply curve for a competitive firm in the short-run is its A) marginal revenue curve above the average total cost curve. B) marginal cost curve below the average variable cost curve. C) average variable cost curve above the marginal cost curve. D) marginal cost curve above the average variable cost curve.

marginal cost curve above the average variable cost curve.

36) A firm maximizes its profit by producing the amount of output such that A) marginal revenue equals marginal cost. B) marginal revenue is maximized. C) marginal cost is minimized. D) marginal revenue exceeds marginal cost by some amount.

marginal revenue equals marginal cost.

10) A price-discriminating monopoly is a monopoly that A) has a license to sell the product. B) sells different units of a good or service at different prices. C) illegally charges different customers different prices for the good it produces. D) sells its output at a single price to all of its customers.

sells different units of a good or service at different prices.

35) A single-price monopoly A) sets a single price for all consumers. B) sets a single, different price for each consumer. C) sells each unit of its output for the single, highest price that the buyer of that unit is willing to pay. D) sets a single, different price for each of two different groups.

sets a single price for all consumers.

26) Marginal revenue is A) the change in total cost from producing an additional unit of output. B) the change in total revenue from a one-unit increase in the quantity sold. C) another name for total revenue. D) less than price for a perfectly competitive firm.

the change in total revenue from a one-unit increase in the quantity sold.

What is gross national​ product? Gross national product is ___.

the market value of all the final goods and services produced anywhere in the world in a given time period by the factors of production supplied by the residents of that country

8) The table above gives the production and prices for a small nation that produces only bread and soda. The base year is 2009. What is nominal GDP in 2010? A) $460 B) $550 C) $510 D) $410

$510

9) The table above gives the production and prices for a small nation that produces only bread and soda. The base year is 2009. What is real GDP in 2010? A) $530 B) $300 C) $210 D) $510

$530

15) In the above figure, for a single-price monopoly the deadweight loss is equal to the area A) abP1. B) bce. C) bed. D) acP2.

) bce

The table gives data about​ Northland's economy in 2019. What is the value of GDP in Northland in 2019​? The value of GDP in Northland in 2019 is ​_______.

1439 billion

11) A market is ________ when a small number of firms compete. A) an oligopoly B) either monopolistically competitive or an oligopoly C) monopolistically competitive D) perfectly competitive

an oligopoly

33) A monopolist can make an economic profit in the long run because of A) the relatively inelastic demand for its product. B) barriers to entry. C) the fact that the firm produces where MR = MC. D) the firm's price setting behavior.

barriers to entry.

6) To be able to price discriminate, a firm must A) sell a product that can be resold. B) be able to identify and separate different types of buyers. C) lower prices for all customers. D) raise prices for all customers.

be able to identify and separate different types of buyers.

30) With price discrimination, a monopoly A) produces less output than if it does not price discriminate. B) converts consumer surplus into economic profit. C) converts consumer surplus into deadweight loss. D) converts producer surplus into economic profit.

converts consumer surplus into economic profit.

37) When a firm adopts new technology, generally its A) cost curves shift upward. B) supply curve shifts leftward. C) cost curves are unaffected. D) cost curves shift downward.

cost curves shift downward.

40) A single-price monopoly has a marginal revenue curve that is A) horizontal and equal to price. B) upward sloping and is the same as its supply curve. C) downward sloping and lies above the demand curve. D) downward sloping and lies below the demand curve.

downward sloping and lies below the demand curve

42) Based on the data in the table above, what does GDP equal? A) $10,000 billion B) $10,200 billion C) $9,800 billion D) $8,900 billion

$10,000 billion

What is the value of GDP in Northland in 2019​? Consumption expenditure = 656 wages = 593 indirect taxes = 138

$1153 billion

A south sea island produces only coconuts. In​ 2015, the price of a coconut is ​$2.00 and the quantity produced is 250. In 2017​, the price of a coconut is ​$2.50 and the quantity produced is 150. 2015 is the base year. What is real GDP in 2017​?

$300

south sea island produces only coconuts. In​ 2015, the price of a coconut is ​$1.00 and the quantity produced is 400. In 2017​, the price of a coconut is ​$0.50 and the quantity produced is 350. 2015 is the base year. What is real GDP in 2017​?

$350

14) In the above figure, for a single-price monopoly the consumer surplus is equal to the area A) acP2 . B) cQ20P2. C) abP1. D) bce.

abP1

Which of the following statements about the business cycle is​ true?

A business cycle is periodic but irregular.

1) Which of the following is a legal barrier to entry? i) public franchise ii) government license iii)patent

B) i, ii, and iii

The figure shows the flows of expenditure and income in an economy. In​ 2008, J was ​$2.0 ​trillion, R was ​$1.5 ​trillion, Z was 1.5 ​trillion, Q was ​$12.5 ​trillion, and U was ​$3.0 trillion. Calculate saving and consumption expenditure.

Consumption expenditure is ​$6.0 trillion Saving is $5.0 trillion

In​ 2008, J was ​$1.5 ​trillion, R was ​$2.0 ​trillion, Z was $1 ​trillion, Q was ​$11.5 ​trillion, and U was ​$1.0 trillion. Calculate saving and consumption expenditure.

Consumption expenditure is ​$8.0 trillion. Part 2 Saving is ​$1.5 trillion.

2) Which of the following expenditure components of GDP can be negative or positive? A) Consumption expenditure B) Investment C) Government expenditure on goods and services D) Net exports of goods and services

Net exports of goods and services

An economy produces only​ robots, pens, and pizza. The table gives the quantities produced and prices in 2020 and 2021. The base year is 2020. What is nominal GDP in 2020 and in​ 2021?

Nominal GDP in 2020 is $36. Nominal GDP in 2021 is $108.

An economy produces only​ robots, pens, and pizza. The table gives the quantities produced and prices in 2020 and 2021. The base year is 2020. What is nominal GDP in 2020 and in​ 2021? Robots 3 , $1 ea Pens 7 $1 ea Pizza 7 $2 ea

Nominal GDP in 2020 is ​$24 Nominal GDP in 2021 is ​$102

13) In the above figure, a perfectly competitive market will have a price of ________ and a single-price monopoly will have a price of ________. A) P1 and quantity of Q1; P2 and quantity of Q2 B) P2 and quantity of Q2; P1 and quantity of Q1 C) P2 and quantity of Q2; P3 and quantity of Q1 D) P3 and quantity of Q3; P1 and quantity of Q1

P2 and quantity of Q2; P1 and quantity of Q1

24) The relationship between real GDP and potential GDP over the business cycle can be best summarized by which of the following statements? A) Real GDP fluctuates around potential GDP. B) Real GDP cannot be less than potential GDP. C) Real GDP is always equal to potential GDP. D) Real GDP cannot be equal to potential GDP

Real GDP fluctuates around potential GDP.

What is or is not included in the measurement of​ GDP?

The underground​ economy, which is not included in GDP is the part of the economy that is hidden from the view of the government.

In 2009​, U.S. exports of goods and services are ​$1,587 billion and imports of goods and services are ​$1,976 billion. What is the value of net​ exports?

The value of net exports in 2009 is -389 billion dollars.

The figure shows the flows of expenditure and income on Lotus Island. In​ 2016, R was ​$8 ​billion; W was ​$33 ​billion; U was ​$15 ​billion; J was ​$15 ​billion; and Z was ​$5 billion. Calculate total expenditure and total income.

Total expenditure is $68 billion Total income is $68 billion

Use the figure to indicte the flows in which the items in the news clip occur. How can GDP increase at a rate of 4.6 percent if consumption expenditure increased at a rate of 6.7​ percent? In the​ figure, _______. t is possible for GDP to increase by only 4.6 percent when consumption expenditure grew at a 6.7 percent rate because​ _______.

U is government expenditure on goods and services and J is investment the sum of investment and net exports grew at a negative rate

GDP in the United States increased between 2018 and 2019. Which of the following could NOT account for this​ increase?

We paid lower prices for our goods and services and production remained constant.

50) Gross Domestic Product equals A) Y = C - I - G - NX. B) Y = C + I + G - NX. C) Y = C + I - G + NX. D) Y = C + I + G + NX.

Y = C + I + G + NX.

Which of the following is included in the measure of U.S.​ GDP?

a hershey;s kiss produced and sold in the United States

39) A firm that is a price taker faces A) a perfectly elastic demand curve. B) an inelastic supply curve. C) an elastic but not perfectly elastic demand curve. D) a perfectly inelastic demand curve.

a perfectly elastic demand curve.

When do net exports of goods and services​ increase?

exports of goods and services increase and imports of goods and services decrease

49) The demand curve faced by a perfectly competitive firm is A) downward sloping. B) upward sloping. C) horizontal. D) vertical.

horizontal.

38) In a circular flow diagram, i) the value of production = income ii) the value of production = expenditure iii) expenditure = income A) only i is a true statement. B) i and iii are true statements. C) i, ii and iii are true statements. D) only iii is a true statement.

i, ii and iii are true statements

16) The business cycle is defined as A) changes in the stock market. B) the period of time during which the unemployment rate is rising. C) changes in financial markets. D) irregular ups and downs in production and jobs.

irregular ups and downs in production and jobs.

28) In perfect competition, marginal revenue A) is always greater than marginal cost. B) increases as more is sold. C) is equal to the market price.

is equal to the market price.

29) With an average cost pricing rule, the quantity produced by the natural monopoly is ________ the quantity produced with a marginal cost pricing rule. A) not comparable to B) greater than in the long run and less than in the short run than C) equal to D) less than

less than

7) Which of the following firms is most likely to be a monopoly? A) clothing store B) local bank C) local distributor of natural gas D) local restaurant

local distributor of natural gas

43) Gross Domestic Product measures the A) quantity of the goods and services produced in a given year, listed item by item, within a country. B) market value of the final goods and services produced in a given year within a country. C) market value of the final goods and services consumed by households in a given year within a country. D) measures the market value of the domestic labor in a given year within a country.

market value of the final goods and services produced in a given year within a country.

Shares in a Ford Motor Company is an example of ___. You collected at $20 bill from a cash machine is an example of ___.

neither an immediate good nor a final good; neither an intermediate good nor a final good

5) The sum of the components of incomes is called ________. A) net domestic product at market prices B) gross domestic product at market prices C) gross domestic product at factor cost D) net domestic product at factor cost

net domestic product at factor cost

46) When firms in a perfectly competitive market are earning an economic profit, in the long run A) new firms will enter the market. B) no new firms will enter the market. C) the initial firms continue to earn an economic profit. D) firms will exit the market.

new firms will enter the market.

41) A natural monopoly exists when A) a monopoly firm faces a horizontal demand curve. B) the producers in an industry have formed a cartel. C) one firm can supply an entire market at a lower average total cost than can two or more firms. D) a firm can engage in price discrimination.

one firm can supply an entire market at a lower average total cost than can two or more firms.

34) A monopoly occurs when A) one firm is larger than the many other firms that make an identical product. B) one firm sells a good that has no close substitutes and a barrier blocks entry for other firms. C) each of many firms produces a product that is slightly different from that of the other firms. D) a few firms control the market.

one firm sells a good that has no close substitutes and a barrier blocks entry for other firms.

3) The four market types are A) perfect competition, imperfect competition, monopoly, and oligopoly. B) perfect competition, monopoly, monopolistic competition, and oligopoly. C) oligopoly, monopsony, monopoly, and imperfect competition. D) oligopoly, oligopolistic competition, monopoly, and perfect competition.

perfect competition, monopoly, monopolistic competition, and oligopoly.

31) A marginal cost pricing rule sets marginal cost equal to A) average cost. B) minimum average variable cost. C) marginal revenue. D) price.

price

23) Comparing a perfectly competitive market to a single-price monopoly with the same costs, we see that A) the perfectly competitive market achieves efficiency in resource use while the monopoly market does not. B) the monopoly market achieves efficiency in resource use while perfectly competitive market does not. C) both markets are equally efficient in their use of resources. D) the monopoly market always is more efficient in the use of resources

the perfectly competitive market achieves efficiency in resource use while the monopoly market does not.

Which of the following is an example of​ investment?

the purchase of new bookshelves by barnes and noble

44) Investment is defined as the purchase of A) any financial asset only. B) financial assets and inventories only. C) the purchase of new capital goods and additions to inventories. D) the purchase of new capital goods but not additions to inventories.

the purchase of new capital goods and additions to inventories.

32) The price charged by a perfectly competitive firm is A) higher the more the firm produces. B) indeterminate. C) different than the price charged by competing firms. D) the same as the market price.

the same as the market price.

22) The above figure shows a perfectly competitive firm. If the market price is $5 per unit, the firm A) will definitely shut down to minimize its losses. B) will stay open to produce and will make an economic profit. C) will stay open to produce and will make zero economic profit. D) might shut down but more information is needed about the fixed cost.

will definitely shut down to minimize its losses.

18) The above figure shows a perfectly competitive firm. If the market price is $20per unit, the firm A) will stay open to produce and will make zero economic profit. B) will stay open to produce and will make an economic profit. C) might shut down but more information is needed about the fixed cost. D) will earn zero economic profit.

will earn zero economic profit.

19) The above figure shows a perfectly competitive firm. If the market price is $10per unit, the firm A) will stay open to produce and will incur an economic loss. B) will lose the total fixed cost regardless whether it continues to produce or it shuts down. C) will stay open to produce and will make zero economic profit. D) might shut down but more information is needed about the fixed cost.

will lose the total fixed cost regardless whether it continues to produce or it shuts down.

20) The above figure shows a perfectly competitive firm. If the market price is $40 per unit, the firm A) will produce 20 units of output to maximize its profit. B) will produce 40 units of output to maximize its profit. C) will produce 35 units of output to maximize its profit.. D) will produce 30 units of output to maximize its profit.

will produce 40 units of output to maximize its profit.

21) The above figure shows a perfectly competitive firm. If the market price is $15 per unit, the firm A) might shut down but more information is needed about the fixed cost. B) will stay open to produce and will make an economic profit. C) will stay open to produce and will incur an economic loss. D) will stay open to produce and will make zero economic profit. E) will definitely shut down to minimize its losses.

will stay open to produce and will incur an economic loss.

17) The above figure shows a perfectly competitive firm. If the market price is $40 per unit, the firm A) will stay open to produce and will make an economic profit. B) will stay open to produce and will make zero economic profit. C) will definitely shut down to minimize its losses. D) might shut down but more information is needed about the fixed cost.

will stay open to produce and will make an economic profit.