econ 202- Nwoha exam 3

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if the monopoly firm is currently producing Q4 units of output, then a decrease in output will necessarily cause profit to

increase if the output is between Q3 and Q4

robin owns a horse stable and riding academy and gives riding lessons for children at pony camp. 20 children, 4000 total revenue. marginal cost of pony camp is 250 per child. in order to maximize profits, Robin should

give riding lessons to fewer then 20 children per month

which graphs illustrate the demand curve most likely faced by a firm in a monopolistically competitive market

graph B (downward slope)

an oligopolists will increase production if the output effect is

greater than the price effect

refer to figure 15-4. what area measures the monopolists profit

(k-b)*w

monopolistically competitive market figure: how much consumer surplus will be derived from the purchase of this product at the monopolistically competitive price

100 to 80 (where price meets demand curve); high x width / 2; Ans: 200

if the market price is $10, what is he firms short-run economic profit

15

which of the curves most likely represent average fixed cost

A???

adibock knows that it produces and sells-high quality athletic shoes. wurkout knows that it produces and sells low quality athletic shoes.

Adibock has an incentive to spend a large amount pf money on advertising for its shoes

the efficient scale of production occurs at which quantity

C

a profit-maximizing monopoly total revenue is equal to

P5*Q3

profit can always be increased by increasing the level of output by one unit if the monopolist is currently operating at

Q1 and Q2 only

a profit-maximizing monopoly will produce an output level of

Q3

for an individual firm operating in a competitive market, marginal revenue equals

average revenue and the price for all levels of output

If a firm in a monopolistically competitive market successfully uses advertising to decrease elasticity of demand for its product, the firm will

be able to increase the markup over marginal costs

the firm should shut down if the market price is

below 6

a change in the supply of one factor of production

can alter the earnings of all other factors

price discrimination

can maximize profits if the seller can prevent the resale of goods between customers

which of the following examples illustrate an oligopoly market

city with two firms who are licensed to sell school uniforms

construction work is much riskier than working as a server as a restaurant. as a result, we'd expect a difference in wages between the two jobs. the difference is known as

compensating differential

in the prisoners' dilemma game, self-interests leads to

each prisoner to confess

in the long-run average total cost decreases as the quantity of output increases, the firm is experiencing

economies of scale

in the long-run a company that produces and sells popcorn incurs total costs of 1050 when output is 90 canisters and 1200 when is 120 canisters. the popcorn company exhibits

economies of scale because average total costs is falling output rises

benefit of society

encourage creative activity

according to the human-capital view, education

enhances productivity

which of the figures represent the total cost curve for a typical firm

figure 2

when an oligopoly market searches Nash equilibrium

firm will have to choose best strategy

refer to figure 16-2. which of the following will occur in the long run in this industry

firms will enter this industry

why doesnt total cost curve begin at the origin

fixed cost are positive when output is 0

a gov-created monopoly arises when

gov gives the exclusive rights to sell some good or service

refer to figure 16-6. The firm's maximum profit is

is -2000

empirical work that does not account for differences in the productivity of workers

is likely to misinterpret apparent evidence of labor market discrimination

in the parable of the leaky bucket, a fundamental problem with gov redistribution programs is identified. as long as the gov only have "leaky buckets" at its disposal,

it should not try to reach complete equality in income

dr. benson is regarded as, by far, the best dentist in his part of the country, yet his income is not significantly higher than the average. bo johnson, the best baseball player un the region earns 5 times the average salary

johnson, unlike dr benson, can provide his services to millions

refer to figure 15-1. the shape of the average total cost curve reveals info about the same nature of the barrier to entry that might exist in a monopoly market. which of the following types best coincides with the figure

natural monopoly

a market structure with only a few sellers, each offering similar or identical products, is known as

oligopoly

in the long-run equilibrium

only a perfectly competitive firm operates at its efficient scale

the marginal product of labor is defined as the change in

output per additional units of labor

monopolistic competition is considered inefficient because

price exceeds marginal costs

if duopoly firms that are not collecting were able to successfully collude, then

price rises and q falls

If one firm left a duopoly market where the firms did not cooperate then

price would rise and quantity would fall

if the gov forces this firm at its efficient scale, it will

produce 5 lose 5

the graph illustrates

production function

to maximize total surplus, a benevolent social planner would choose which of the following outcomes

q=45 and p=45

wage is to the labor market as the

rental price of capital is to the capital markety

sherman antitrust act

restricted the ability of competitors to engage in cooperative agreement

in which of the following markets are strategic interaction among firms

tennis balls

which of the following is consistent with the data reported in the figure

the female poverty rate is higher for all age groups than make poverty rate

a cooperative agreement among oligopolists is more likely to maintain

the more likely it is that the game among the oligopolists will be played over and over

The rental price of land is

the price for the flow of services from land over a specified time period

Farmer McDonald sells wheat to a broker in Kansas City, Missouri. Because the market for wheat is generally considered to be competitive, Mr. McDonald maximizes his profit by choosing

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

monopoly competitive firm chooses

the quantity of output to produce, but price of output determined by demand

As the number of firms in an oligopoly increases,

the total quantity of output produced by firms in the market gets closer to the socially efficient quantity.

if the gov decided that each family needed a minimum income of 25,000 and promised to make up the difference between whatever a family earned and 25,000, which of the following is correct

this program reduces the incentive to work to earn any wage up to 25000

an extra dollar of income gives more additional satisfaction to a poor person than to a rich person. this is an important assumption of which of the political philosophy

utilarianism

what political philosophy believes that gov should equalize income...

utilitarian, liberalism, and libertarianism all do not believe the gov...

to maximize profit, a competitive firm hires workers up to the point of intersection of the

value of marginal product curve and the wage

when labor supply increases

wages decrease as long as labor demand is downward sloping

assume a firm is a competitive industry is producing 800 units of output, and its sells each for 6. average total cost is 4. total profit is

1600

suppose this market is served by 2 firms who each face the marginal cost curve shown in the diagram and have 0 fixed costs. the marginal revenue curve that a monopolists would face in this market is also shown. if the firms are able to collude successfully, what is the marginal profit if each firms

2 (difference between 8 and 4 and then split between both firms) and the price will be 9 per unit

how much profit will the monopolistically competitive firm earn in this situation

200

if the us government determines tat the cost of feeding an urban family of 4 is 7,500 per year, then the official

22,500

given that Bearclaws chooses the profit-maximizing price and quantity, what profit level will it obtain

280=(14-4)*70

to maximize profit (or minimizing loss), the firm will produce

30 units

if there are 300 identical firms in the market, what level of output will be supply when price is 1

300*100= 30,000

suppose that the firm pays its workers 45 per day. each unit of output sells for 10. how many workers should the firm i=hire?

4

what is the total revenue from selling 4 units

480

given demand for labor, D1, and supply of labor, S1, what are the equilibrium wage and quantity of labor

5 and 250

suppose the firm hires each unit of labor for 600 per week, and each unit of output sells for 9. what is the value of the marginal product of the third worker

675= (285-210)*9

based upon the info shown, how many units will Bearclaws produce to maximize profit

70

what is the marginal product of the second worker

8

let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. assume two points on the firms productoin functions are (L=12, Q=122) and (l=13, q=130)

8 units of output

What price will the monopolistically competitive firm charge in this market?

80

a competitive firm sells its output for 60 per unit. assume that labor is the only input that varies for the firm. Marginal profit for the 10th worker is 20 units. the marginal product of the 11th worker is 16 units. the firm pays a wage of 150 per day. for 11th worker, the value of the marginal product of labor is

960

which of curve is most likely

?

For a firm, marginal revenue minus marginal cost is equal to

???

assume the market starts in equilibrium at point W in graph (b) and that graph (a) illustrates the cost curves facing individual firms. suppose that demand increases from D0 to D1. which of the following statements is not correct? (most likely not on exam)

???

if the minimum wage in this market is 8, then

???

in the short run, if the market price is P4, individual firms in a competitive industry will earn

???

what price will the monopolist charge in order to maximize profit

???

imagine a small town in which only two residents, Rochelle and Alec work together to decide how many gallons of water to pump

????

hat happens to the labor supply curves in both countries when Mexican workers leave Mexico and move to US

LS increases in US and decreases in Mexico

each august many high school students visit doctor's office to have a sports physical. if price of sports physical fall, what happens in the market for nurses

demand decreases from D2 to D1

Because a firm's demand for a factor of production is derived from its decision to supply a good in the market, it is called a

derived demand

economists generally agree that

differences in average wages do not by themselves provide conclusive evidence about the magnitude of discrimination in labor markets

a disadvantage associated with in-kind transfers to reduce poverty is that they

do not allow poor families to make purchases based on their preferences

chloe and guilherme both work at the local factory producing cars. chloe earns 22 per hour working the day shift, and Guilherme earns 25 per hour working the night shift. Chloe and Guilherme do the same job, have the same experience, and have the same level of education. This means that the

higher-paying job has a compensating wage differential of 3 per hour

economists study poverty and income inequality to answer which of the following questions

how much inequality is there in society

assuming the firm is maximizing profit, this firm is operating

in the short run and earning a positive economic profit

which of the following does not explain the rise in income inequality in the US from 1970 to 2017

increase in minimum wages

the firm hires the factor up to the point where the value of the factors marginal product is equal to the factors price. this statement applies to which factor of production

land, labor and capital

Firms may experience diseconomies of scale when

large management structures are bureaucratic and inefficient

a society of these individuals: sam, tristan, and ulyana. in terms of income and utility, sam is currently...

liberalism suggests that gov policies should strive to increase ulyanas utility

according to the signaling theory of education, better-education workers

likely to be high-ability workers

because of diminishing returns, a factor in abundant supply has a

low marginal product and low rental cost

a recent law school graduate is considering two offers to practice law, one in new york and the other in Illinois. the new york bar exam is very difficult to pass compared with illinois exam.

lower wage in Illinois

curve a is always declining because

we are dividing fixed costs by higher and higher levels of output

after an employer pays the cost of educating a worker, the

worker might look for another job unless his employer pays him more


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