Microeconomics Final: Practice Questions
Price controls often generate...
Black Markets
A movement from one point on the supply curve to another point is...
A change in the quantity supplied
Economies of Scale are illustrated by...
Falling long-run average cost curve
The market demand curve in perfect competition is found by...
Horizontally summing the demand curves of the individual consumers
A Demand Schedule...
Is only for a given time period
The short-run supply curve of a perfect competitor is...
Its marginal cost curve equal to or above the minimum point on its average variable cost curve
The main source of diseconomies of scale is...
Limits to the efficient functioning of management
When the marginal physical product is increasing...
Marginal cost is falling
The value of the marginal product is...
Marginal physical product times the product price
If the wage rate increase and firms in a perfectly competitive industry are hiring labor, then....
Market supply will decrease
When economic profits are positive, accounting profits...
Must be positive
The law of diminishing marginal returns is responsible for...
None of the long-run relationships
As a firm hires more workers, holding the amounts of capital and other inputs constant....
Output increases at a decreasing rate
At the firm's short-run break-even point, accounting profits are
Positive
The market supply curve is found by...
Summing up and plotting the supply curves of individual firms
Under perfect competition, the firm must decide...
The best rate of output it should produce
The marginal physical produce of labor is...
The change in output resulting from the addition of one more worker, holding other factors of production constant
Marginal physical product is...
The change in total output from using an additional unit of one variable input, holding other inputs constant
The marginal revenue product of labor declines as the number of workers increases because...
The law of diminishing marginal returns
The additional revenue obtained by a firm when it hires an additional worker, holding other inputs constant, is...
The marginal revenue product of labor
The meaning of demand is...
The quantities of a good that people will buy at various prices
Marginal physical product of labor equals...
The wage divided by marginal cost
Average variable costs equal...
Total variable costs divided by output
The Market Demand Curve of the perfectly competitive industry is downward sloping while the demand curve facing an individual firm is elastic....T/F
True
The price system features...
Voluntary exchange that makes both parties better off
An increase in the price of labor will lead to a...
Change in supply
The law of supply includes the statement "other things being equal", these other things do not include:
Consumer's income
If marginal revenue is less than marginal cost, the firm should...
Decrease its rate of output