ECON exam 3

in figure 24.2, The profit maximizing monopolist will earn a profit per unit of a. $1.50 b. $4.00 c. $4.70 d. $5.00

$1.50

referred to figure 22.3 for a perfectly competitive firm. This firm should shut down at any price below a. $10 b. $4 c. $15 d. $23

$10

in figure 24.2, the profit maximizing level of output is a. between 4 and 5 units b. between 5 and 6 units c. 4 units d. between 2 and 3 units

4 units

refer to figure 22.2 for a perfectly competitive firm. The profit maximizing quantity of output is a. E b. D c. B d. C

D

for a perfectly competitive market, long run equilibrium is characterized by all of the following but which one? a. P = minimum ATC b. P = MR c. P = maximum ATC d. P = MC

P = maximum ATC

The shut down point for a perfectly competitive firm is where a. The best it can do is break even b. The firm is losing money c. total revenue falls below total cost d. Price falls below AVC

Price falls below AVC

if catfish farmers expect catfish prices to fall in future, then right now a. there will be a movement up along the market supply curve for catfish b. there will be a movement down along the market supply curve for catfish c. The market supply curve for catfish will shift to the right d. The market supply curve for catfish of shift to the left

The market supply curve for catfish will shift to the right

if a perfectly competitive firm is producing a rate of output at which MC exceeds price, then the firm a. is maximizing profit b. can increase its profit by decreasing output c. must have an economic loss d. can increase its profit by increasing output

can increase its profit by decreasing output

The marginal revenue for a perfectly competitive firm is always a. increasing b. decreasing c. constant d. equal to the average total cost

constant

Technology improvements shift the firms marginal cost curve a. upward and supply decreases b. downward and supply decreases c. upward and supply increases d. downward and supply increases

downward and supply increases

for a competitive market in the long run, a. accounting profit is zero b. economic losses induce firms to shut down c. economic profit is positive d. economic profits induce firms to enter until profits are normal

economic profits induce firms to enter until profits are normal

for monopolist, marginal revenue a. The change in total cost divided by the change in quantity b. is less than the price of any unit that is greater than 1 c. is price times quantity d. is the change in quantity divided by the change in total revenue

is less than the price of any unit that is greater than 1

which one of the following statements about the demand curve confronting a competitive firm is true a. it's slopes downward, and the marginal revenue curve is below it b. it is horizontal, as is the Market demand curve c. it's slopes downward, while the Market demand curve is horizontal d. it equals the marginal revenue curve

it equals the marginal revenue curve

which one of the following statements about a competitive firm is correct a. it is large enough relative to the market to be taken into account by competitors b. it confronts a downward sloping firm demand curve c. it is a price taker d. it has the market power to compete effectively

it is a price taker

The entry a firms into a Market, a ceteris paribus, a. shifts the market demand curve to the left b. decreases the equilibrium output in the market c. reduces the economic profit of each firm already in the market d. shifts the market supply curve to the left

reduces the economic profit of each firm already in the market

Lashondra is the owner/operator of an interior design firm. Last year she earned $400,000 in total revenue. Her explicit costs were $200,000 (assume that this amount represents the total opportunity cost of these resources). During the year she received offers to work for other design firms. One offer would have paid her $120,000 per year and the other would have paid her $130,000 per year. Lashondra's economic profit is equal to A. -$50,000. B. $70,000. C. $0. D. $200,000.

$70,000

which of the following is characteristic of a perfectly competitive market a. Long run economic profit b. high barriers to entry c. identical products d. A small number of firms

identical products

if a monopolist is producing a level of output where MR exceeds MC, then it should a. raise its price b. shift it's marginal cost curve upward c. increase its output d. lower is output

increase its output

in figure 24.2, total profit at the profit maximizing rate of output is a. $6.00 b. $22.00 c. $16.00 d. $5.50

$6.00

if a competitive market experiences long run economic losses, then a. more firms will enter the market b. equilibrium price will rise as firms exit c. The Market supply curve will shift to the right d. normal profit will fall to zero as firms enter

equilibrium price will rise as firms exit

accounting profit is a. greater than economic by the amount of implicit cost b. less than economic profit by the amount of explicit cost c. greater than the economic profit by the amount of explicit cost d. less than the economic profit by the amount of implicit cost

greater than economic by the amount of implicit cost

at equilibrium in a monopoly, economic profit will most likely be a. greater than zero b. zero c. negative d. normal

greater than zero

which of the following statements is true for monopolist a. it faces many competitors b. it's marginal revenue curve is equal to its demand curve c. it faces a perfectly elastic demand curve d. it must lower its price on all of its units in order to sell any additional unit

it must lower its price on all of its units in order to sell any additional unit

compared with a competitive market with the same cost and market demand circumstances, a monopolist has a. more pressure to reduce cost and less reason to improve quality b. less pressure to reduce cost and more reason to improve quality c. less pressure to reduce cost and less reason to improve quality d. more pressure to reduce cost and more reason to improve quality

less pressure to reduce cost and less reason to improve quality

an individual competitive firm cannot affect market price because a. there is an infinite demand for their goods b. demand is perfectly inelastic for their goods c. their individual production is insignificant relative to the production of the industry d. The government exercises control over the market power of competitive firms

their individual production is insignificant relative to the production of the industry