Economics exam 2 (quiz 5 and 9)
Farmers currently sell lemons for $2 .At what price must a new farmer sell lemons? Select the best answer.
$ 2 per bushel
What is the elasticity of savings for the following scenario? Select the best answer. Suppose the quantity of financial savings fell by 3%, and the interest rate fell by 2%
% change in quantity saving/ % change in interest rate 1) 3/2 = * 1.5 *
When a monopolist produces 50 units, total cost of production is $5,000 When a monopolist produces 75 units, the total cost is $7,500 The following answer is correct: $100
($7,500−$5,000)/(75−50)=$100
Based on the following information about a perfectly competitive grocery store, what is the store's marginal revenue? Write the exact answer. Do not round. Total revenue increased by $100, and quantity increased by 100
be calculated as change in total revenue/change in quantity=marginal revenue 100/100=1
Is the following statement true or false? Select the best answer .The marginal utility ratio of novels to magazines is 2.2, so the price ratio of novels to magazines must be 1.
false
Is the following statement true or false? Select the best answer. Diminishing marginal productivity is caused by fixed labor.
false
Is the following statement true or false? Select the best answer. Predatory pricing is an example of a trademark.
false
Is the following statement true or false? Select the best answer. The budget constraint line represents the possible combinations of five goods that are affordable given a consumer's limited income.
false
Is the following statement true or false? Select the best answer. If a one-percent change in price leads to an infinite change in quantity demanded, the demand curve is perfectly inelastic.
false
Is the following statement true or false? Select the best answer. In economics, utility is synonymous with elasticity.
false
Is the following statement true or false? Select the best answer. Predatory pricing is an example of the control of a physical resource.
false
The Nike "swoosh" is an example of intimidating potential competitors.
false
Based on the following information, will the firm enter or exit the market? Select the best answer. The firm had its final clearance sale because the last two years have resulted in negative profits.
exit
Is the following example an explicit cost or an implicit cost? Select the best answer. The firm paid the mortgage for the building that houses its warehouse.
explicit cost
Is the following example an explicit cost or an implicit cost? Select the best answer. The firm purchased a new copier machine.
explicit cost
In the long run, firms in perfect competition achieve productive efficiency. What does this mean? Select the best answer.
firms produce at an output level where the average cost its at its lowest
Which option best completes the blank in the following sentence? Select the best answer. New developments in production technology can shift the [blank] average cost curve in ways that can alter the size distribution of firms in an industry.
long-run
Suppose you are in charge of sales at a pharmaceutical company, and your firm has a new drug that clears acne in teenagers. Assume that the company wants to earn as much revenue as possible from this drug. If the elasticity of demand for your company's product at the current price is 1.75, what would you advise the company to do?
lower the price
Which option best completes the blank in the following sentence? Select the best answer .There is [blank] entry and exit into and out of perfectly competitive markets.
free
ider the following scenario: Los Angeles has regulations that allow only one company to pick up the garbage in the whole city. Which of the following describes this scenario?
government-enforced barrier entry
Which option completes the blank(s) in the following statement? Select the best answer. Suppose you spend money that you earn on paying bills, but you spend money that you win playing cards on frivolous things, even when you still have bills to pay. This is an example of [blank].
mental accounting
Is the following statement true or false? Select the best answer. If supply is perfectly inelastic, shifts in demand have a large effect on price.
true
Is the following statement true or false? Select the best answer. In the short run, the only variable factor is labor.
true
Is the following statement true or false? Select the best answer.If a firm in a perfectly competitive market increases its price by one cent, it will make no sales.
true
Is the following statement true or false? Select the best answer.If supply is inelastic, shifts in demand have a larger effect on equilibrium price than on quantity.
true
Is the following example an explicit cost or an implicit cost? Select the best answer. The firm owns a forklift that could be rented out to a new company in town.
implicit cost
Consider the following statement:The demand curve has a vertical appearance.Which case of elasticity does this statement describe? Select the best answer.
inelastic
Is the labor supply for the following job more elastic or inelastic? Select the best answer. human resources manager
inelastic
Which option best completes the blank in the following sentence? Select the best answer. Gasoline would be represented with an [blank] demand curve.
inelastic
Suppose Jennifer initially has an income of $2,000, the price of dinner is $100, and the price of a basketball ticket is $50 To maximize her utility, she initially purchases 1010 dinners and 20 basketball tickets. Now, suppose her income increases to $4,000 and she chooses to purchase 35 dinners. Assuming Jennifer spends all of her income, basketball tickets are considered which type of good? Select the best answer.
inferior
Based on the following statement, what kind of elasticity does the demand curve have? Select the best answer. The demand curve for movie tickets when the price increases by 20%
infinite elasticity
Which elasticity does the following expression solve? Select the best answer. % change in quantity of borrowing/% change in interest rate
interest rate elasticity of borrowing
Which elasticity does the following expression solve? Select the best answer. % change in quantity of borrowing / % change in interest rate
interest rate of elasticity in borrowing
Suppose there is a single firm in a market that was formed by deterring potential entrants. What type of monopoly or barrier to entry does this describe? Select the best answer.
intimidating potential competitors
Suppose there is a single firm in a market that was formed by possessing a trade secret. What type of monopoly or barrier to entry does this describe? Select the best answer.
legal monopoly
Consider this scenario; then, complete the blank in the following statement by selecting the best answer. Elizabeth loses $25 playing the lottery. Later, Elizabeth finds $25 on the ground. Behavioral economics would predict that Elizabeth is likely to be [blank] than she was before either of these things happened.
less happy
Supply and/or demand is perfectly inelastic for which good? Select the best answer.
life-saving drugs
Consider the following scenario: Property taxes increase significantly. Would you expect the elasticity of demand for housing to be higher in the short run or the long run? Select the best answer
long run
The popularity of beach vacations rises dramatically. Would you expect the elasticity of supply for beachfront property to be higher in the short run or the long run?
long run
There is an increase in people who need health care. Would you expect the elasticity of supply for doctors to be higher in the short run or the long run?
long run
The government imposes a tax on cigarettes. Under what conditions will cigarette buyers bear most of the tax burden?
demand for cigarettes is inelastic
When a monopolist produces 60 units, total cost of production is $1,200. When a monopolist produces 70 units, the total cost is $1,400 .What is the firm's marginal cost? Write the exact answer. Do not round.
(1400-1200)/(70-60)= 20
Which of the following are characteristics of a natural monopoly?
*The average cost of production falls as output expands., *Producing additional output requires only very modest additional outlays beyond the fixed initial investment.
The equilibrium price of a good is $14. The demand for this good is more elastic than the supply. Suppose the government introduces a tax on the good. In this case, the price paid by consumers is $16, and the price received by producers is 3.2 times less. Calculate the tax per good for the group bearing most of the tax burden.
1) 16/ 3.2 = 5 2) 14- 5 = 9 * 9 *
Using the midpoint method, calculate the price elasticity of supply from Point N to Point P. (table)
1) (100-95)/(100+95)/2 * 100= 5.13 -quantity 2)(13-12)/(13+12)/2 *100 =8 -price 3) 5.13/8 = .64 Inelastic
When a monopolist produces 95 units, total cost of production is $900. When a monopolist produces 100 units, the total cost is $1,000 What is the firm's marginal cost? Write the exact answer. Do not round.
1) (1000-900)/(100-95)= 20
A product costs $12. When the price increases by $5, the quantity demanded decreases by 2020 units. The price elasticity of demand is unitary when the price increases from $12 to $17. What is the corresponding percentage change in quantity demanded
1) (17-12) /(17+12)/2 *100=34.48% (mathway) 2) % change in quantity demanded -34.48%
A fast-food chain is considering opening a new restaurant. To operate the restaurant, management would need to hire 10 employees (cooks and cashiers) at $19,000 for each per year and 6 supervisors at $28,000 for each per year. The rent will be $46,000 per year. Depreciation of the equipment will make the company spend, on average, $16,000 per year on its repairs. Management assumes that true economic profit would be $78,000 per year. Determine the amount of expected earnings per year. If necessary, round all intermediate calculations and your final answer to the nearest dollar.
1) (19000*10) +(28000*6)+46000= 404000 2) 404000+16000= 420000 3) 78000+420000= *498000*
The following table displays data about demand for smart phones. Step 1 of 2 : Using the midpoint method, calculate the price elasticity of demand from Point C to Point E. If necessary, round all intermediate calculations and your final answer to two decimal places.
1) (2,200-2,600/2,200+2,600/2 )* 100= -16.67% 2) (100-80/100+80/2)*100 = 22.22 % 3) 16.67/22.22= .75 *.75* 2) elastic
A product's price was $5, and its quantity demanded was 50 units. Then, the quantity demanded decreased by 25 units, while the product's price increased by $4 Calculate the price elasticity of demand. Use the midpoint method in your calculations and enter your answer as a positive number in the box below, rounding to two decimal places if necessary.
1) (50-25)-50/((50-25)+50)/2 * 100= -66.67 * - units 2) (5+4)-5/((5+4)+5)/2 *100= 57.14 -money 3)-66.67%/57.14%= *1.17* - positive
When price is equal to 320, a monopolist can sell 20 units of output, and when price is equal to 280, a monopolist can sell 30 units of output .What is the firm's marginal revenue? Write the exact answer. Do not round.
1) (8400-6400)/(30-20)= 200 320* 20 = 6400 280*30 = 8400
The price elasticity of demand for a product is 0.31 Given that the percentage change in price is 14%, what is the percentage change in quantity demanded?
1) .31*.14= .0434 2) .0434 *100= * 4.34% *
Last month, Video Game Store A sold 2,600 copies of a new game for $10 each. Store B started selling this game one day earlier and sold 280 copies more at the same price. Store A pays $6,500 in wages and $5,500 in building rent. Step 1 of 2 : Calculate the total economic profit. Use a minus sign to show losses if necessary. Write the exact answer. Do not round.
1) 10*2600=26000 2) 6500+5500+10*280=14800 3)26000-14800=11,200 2) yes, because true economic profit is greater than 0
The equilibrium price of a good is$10.00. Demand for the good is more elastic than supply. Suppose the government introduces a tax on this good; as a result, the tax burden on consumers is $1.50, and the tax burden on producers is $3.00 Calculate the price received by producers after the introduction of the tax.
1) 10.00- 3.00 = 7.00
Calculate the profit margin for a firm that gained $100 in profit for the 3 dresses it produced and sold. Enter your answer in the box below, rounding to the nearest whole number if necessary.
1) 100/3 =33
When a monopolist produces 100 units, total cost of production is $10,000. When a monopolist produces 125 units, the total cost is $12,500.What is the firm's marginal cost?
1) 12,500- 10,000/ (125- 100)= 100
Suppose the price of a good decreases from $19 to $13, and the quantity demanded increases from 260 goods to 380 goods.
1) 13-19/ ( 13+ 19)/2 *100= 37.5 2) 380-260/ 380+ 260/2 *100= -37.5 unitary
The first change in price for a good was from $10 to $14. Suppose the price changes by the same amount at each point of the supply curve. Calculate the percentage change in quantity at the second point using the midpoint method if there is constant unitary elasticity of the supply curve.
1) 14-10= 4 2) 14+4= 18 3) 4/(18+14)/2 * 100 * 25 % *
The price of a good increased from $12 to $15. Assuming the good's supply curve exhibits constant unitary price elasticity, calculate the percentage change in quantity supplied using the midpoint method. If necessary, round all intermediate calculations and your final answer to two decimal places.
1) 15-12/(15+12)/2 *100= 22.23 2) 22.23
The price of a good decreased from $20 to $15. Assuming the demand curve exhibits constant unitary price elasticity, calculate the percentage change in quantity demanded using the midpoint method. I
1) 15-20/ (15+20)/2 * 100= -28.57 change in quantity demanded * 28.57*
he price of a board game fell from $ 20 to $12. The quantity supplied fell from 210 to 160 units. Step 1 of 2 : Calculate the price elasticity of supply using the midpoint method.
1) 160-210/(160+210)/2 *100= * -27.03* 2) 12-20/(12+20)/2 *100= -50 3) -27.03/-50= *.54 Calculate the supply curve 1) 12-20= -8 2) 160 - 210= -50 3) -8/-50=.16
If two gardeners can plant 11 flowers in an hour, and three gardeners can plant 20 flowers in an hour, what is the marginal product of the third gardener? Write the exact answer. Do not round.
1) 20-11=9
In January, a store sold 200 stuffed toys (their only good) at a price of $55. The shop's January accounting profit was $1,935. To open the store, the owner had left her previous job, where she earned $1,430 per month. The cost of the materials used to create a toy is $22$. The shop also incurred overhead costs. Calculate the store's total costs, both implicit and explicit. Write the exact answer.
1) 200*500=11000 2)11000-1935= 9065 3)9065+1430=10495
The equilibrium price of a good is $22. Suppose the government introduces a tax on this good. In this case, the price paid by consumers is 1.4 times more than the equilibrium price, and the price received by producers is 1.1 times less than the equilibrium price. Calculate the amount of tax per good.
1) 22 * 1.4 =30.80 2) 22/ 1.1 = 20 3) 30.80 - 20 = 10.80 * $ 10.80*
In the following scenario, what is the marginal utility per dollar? Round your answer to two decimal places if necessary. Marisol gains 23 utils from buying an additional pillow that costs $10$
1) 23/10= 2.3
Given that total cost is $12, and profit is $24, what is total revenue? Write the exact answer. Do not round.
1) 24+12= 36
The average annual income rises from $20,000 to $30,000and the quantity of bread consumed in a year by the average person falls from 32 loaves to 24 loaves. Step 1 of 2 : What is the income elasticity of bread consumption? Round your answer to two decimal places. Enter the results in the box below.
1) 24-32/ (24+ 32)/2 * 100= -28.57 2) 30000- 20000/ (30000 + 20000)/2 * 100= 40 -28.57%/ 40%= -.71 inferior good
The average annual income rises from $25,000 to $30,000 and the quantity of bread consumed in a year by the average person falls from 32 loaves to 24 loaves. Step 1 of 2 : What is the income elasticity of bread consumption? Round your answer to two decimal places.
1) 24-32/ (24+ 32)/2 * 100= -28.57 2) 30000- 25000/ (30000 + 25000)/2 * 100= 18.19 -28.57/18.19= -1.57 inferior
There is a monopoly firm that produces agricultural machinery. The total production cost for 11 thousand machines is $55 million, and the total revenue is $145 million. At an output of 2 thousand machines, the total cost will be $80 million, while the expected total revenue will be $240 million. Determine the marginal profit the firm will receive from selling 2 thousand machines.
1) 240-145/ (2-1)= 95 2) 80-55/(2-1)= 25 3) 95-25= * 70 *
The average annual income rises from $25,000 to $38,00, and the quantity of bread consumed in a year by the average person falls from 30 loaves to 27 loaves. Step 1 of 2 : What is the income elasticity of bread consumption? Round your answer to two decimal places
1) 27-30/ (27+30)/2 * 100= -10.53 2) 38000- 25,000/( 38,000+25,00)/2 * 100= 41.27 3) -10.53/41.27=-.26 inferior
Consider a market with a monopoly firm. Sales revenue of this firm is $10,080,000 total cost is $3,920,000 and average cost is $1.40. Another firm wants to enter the market and provide the same product at a lower price. To intimidate the potential competitor, the monopoly firm intends to use predatory pricing. By how much can this firm reduce the price of its product without losses?
1) 3,920,000/1.40= 2,800,000 2)10,080,000/ 2,800,000= 3.6 3) 3.60 -1.40= *2.20*
You run a shop that sells everything connected with coffee. Currently, you sell 18 coffee makers per month, but you would like to increase this to 32. Knowing that coffee makers and coffee beans are complements, you have decided to stimulate demand for coffee makers by decreasing the price of coffee beans. Given that you achieved your sales target for coffee makers by reducing the price of coffee beans from $0.50 to $0.39, what is the cross-price elasticity of demand between the two goods? Use the midpoint method,
1) 32- 18/ 32+ 18/2 * 100 = 56 2) .39-.50/ .39+.50/2 * 100= -24.72 56/ -24.72 = -2.27
The price of a good decreased from $70 to $35. Assuming the demand curve exhibits constant unitary price elasticity, calculate the percentage change in quantity demanded using the midpoint method. If necessary, round all intermediate calculations and your final answer to two decimal places.
1) 35-70/35+70/2*100= -66.67 2) Therefore, 66.67
Assume that as a result of an economic boom, the average annual income in Country A increased from $220,000$ to $240,000. At the same time, the quantity of black caviar demanded per capita increased from 3.5 kilograms to 4.0 kilograms. Using the midpoint method, calculate the income elasticity of demand for black caviar
1) 4.0- 3.5 / (4.0 +3.5)/2 * 100 = 13.3 = 13.34 2) 240,000 - 220,000/ 240,000 + 220,000/2 * 100= 8.70 3) 13.33/8.70= * 1.53 *
Suppose that a monopolist has a constant marginal cost curve. That is, for each unit of output that the monopolist produces, it costs an additional $40. The monopolist's marginal revenue is MR=600−8Q, where Q is the quantity produced. The demand curve is P=600−4Q What is the monopolist's profit-maximizing output and price?
1) 40= 600- 8q = 70 q= 70 2) 600- 4 (70)= 320 Price= $320 quantity = 70
Calculate the profit margin for a firm that gained $410 in profit for the 30 alarm clocks it produced and sold. Enter your answer in the box below, rounding to the nearest whole number if necessary.
1) 410/30= 13.66= * 14*
Calculate the short-run average cost for a pet store given that the total cost of inputs is $550 and quantity of output produced is 50 .Enter the answer in the box below, and round to the nearest cent if necessary.
1) 550/50= 11
When price is equal to 70, a monopolist can sell 30 units of output, and when price is equal to 60, a monopolist can sell 40 units of output. What is the firm's marginal revenue?
1) 70 * 30=2100 2) 60 * 40 = 2400 3) ( 2400- 2100)/ (40- 30)=30
A country is about to let refugees in, but current residents are strongly against it. They are afraid that the wages of low-skilled workers will fall if there is an increase in the available workforce. It is estimated that the country can let in 80,000 refugees, but only 65% of them are expected to look for a job. The wage elasticity of labor demand is −0.8. In the country's labor market, there are 624,000 low-skilled workers. Calculate the expected wage drop as a percentage, using the midpoint method. Wage elasticity of labor demand =% change in quantity of labor demanded / % change in wage
1) 80,000 *65% = 52,000 2) 52,000/ ( 624,000 + 624,000 + 52,000)/2 * 100= 8 3) 8.0 %/ -0.8= -0.1 -0.1 * 100= -10
If two painters can paint 90 square feet of wall in an hour, and three painters can paint 96 square feet, what is the marginal product of the third painter? Write the exact answer. Do not round.
1) 96-90= 6
Suppose the price of a good increases from $15 to $17, and the quantity supplied increases from 300 goods to 340 goods. Using the midpoint method, what is the type of elasticity in this situation?
1) price- (17-15)/(17+15)/2 *100= 12.5 2) quantity- ( 340-300)/ (300+340)/2 * 100= 12.5 Unitary elasticity of supply
You were asked to use the following table to calculate the price elasticity of demand from Point C to Point H. Table
1) quantity (1600-12600)/1600+2600)/2 *100= 47.62 2) price (130-80)/(130+80)/2 *100= 47.62 3)quantity/ price 47.62/47.62 unit elastic
The price of a board game fell from $19$ to $9. The quantity supplied fell from 220 to 200 units. Step 1 of 2 : Calculate the price elasticity of supply using the midpoint method.
1) quantity - 200-220/(200+220)/2 *100= -9.52 2) price-9-19/(9+19)/2 *100= -71.43 3) -9.52% /-71.34%= * .13* Slope of the supply curve 1) 9-19= -10 2) 200- 220= -20 3) -10/-20= * .50 * elastic
Determine the maximum demand at which the market will be in equilibrium and the firm will stay a natural monopoly in the long run. Enter your answer in the box below. (table)
1) total cost/ quantity * $9,00/ 1,000= 9* *$10,200/ 1,200= 8.5 * all of them* step 2 determine minimum units 1400 units answer 1,200 units
Determine the firm's profit-maximizing price. (Table)
1)At a quantity of 11 ton, marginal revenue is equal to $1,200$1,200.MR (Q=2 tons)=$2,230−$1,200=$1030 (Q=3 tons)=$3,090−$2,230=$860 (Q=4 tons)=$3,780−$3,090=$690 Q=5 tons)=$4,300−$3,780=$520 (Q=6 tons)=$4,650−$4,300=$350 (Q=7 tons)=$4,830−$4,650=$180 2) total cost - total cost = 2-1 and then keep going 980-900= 80 6 tons
The bakery initially starts its operation with one oven. What is the marginal productivity of the second worker in the long run? Write the exact answer. Do not round.
10 because the second worker does 20 and the first one 10 so 20-10= 10
What is the average variable cost of production when the firm produces five jewelry display cases? Round your answer to two decimal places if necessary.
104/5=20.80
What should a profit-maximizing monopolist do in the short run given the columns Total Revenue 2 and Total Cost 2 and a current output of 3? Select the best answer.
12 5,400 1,200 4,400 8,850 Increase quantity
When price is equal to 320 a monopolist can sell 20 units of output, and when price is equal to 280, a monopolist can sell 30 units of output. What is the firm's marginal revenue?
200
What is her total utility if she purchases 1 pair(s) of earrings and 1 bracelet(s)? Enter the exact value. Do not round.
25 +30= 55 total utility
Use the following table to calculate the marginal product of shirts produced by hiring a second tailor. Write the exact answer. Do not round.
25- 17= 8 second tailer- first tailer= 8
Is the following statement true or false? A larger coefficient indicates more elastic demand and a flatter demand curve.
true
The equation for a demand curve is P=50−2Q. What is the elasticity in moving from a quantity of 5 to a quantity of 6?
3.55
When price is equal to 140, a monopolist can sell 30 units of output, and when price is equal to 120 a monopolist can sell 40 units of output.What is the firm's marginal revenue?
60
Which of the following statements explains how a natural monopoly arises? Select the best answer.
A natural monopoly arises when economies of scale are large relative to the market demand such that one producer can serve the entire market more efficiently than a number of smaller producers that would need to make duplicate physical capital investments.
Which of the following statements explains how a natural monopoly arises?
A natural monopoly exists because the cost of producing the product is lower due to economies of scale if their is just a single producer than if there are several competing producers. or A natural monopoly occurs when firms experience declining average total costs over the full range of output that consumers are willing to pay.
Suppose a perfectly competitive firm faces the following situation: Total Revenue (TR) > Fixed Cost (FC) at all output levels) What should the firm do in the short run? Select the best answer.
Additional information is needed to determine if the firm should produce in the short run.
Are the following statements true or false? Select the best answer. Statement 1: By being productively efficient, perfectly competitive markets are able to sell their products at the lowest possible prices. Statement 2: By being productively efficient, perfect competitors utilize society's scarce resources in the best possible way.
Both statements are true.
Calculate the short-run marginal cost for a firm given that total cost of inputs increased from $555to $560 and quantity of output produced increased from 10 units to 11 units. Enter the answer in the box below. Round to the nearest cent.
Change in total cost: 560−555=5 Change in quantity produced: 11−10=1 Marginal cost: 5/1=5.00
Natalie owns a small business. This year, she paid her employees $94,318 Insurance and licensing expenses cost $19,000. Cost of materials was $75,454. Natalie has $73,873 invested in equipment for the business, which could be sold for the same price that she paid for it. If she did not own this equipment, she would have this amount in savings, which could be earning 10% interest. Natalie also received an offer to return to her previous job at a salary of $55,000.Calculate Natalie's explicit and implicit costs for this year. Enter your answers in the boxes below, rounding to the nearest whole number if necessary.
Explicit costs: $188,772 Implicit costs: $62,387 $94,318+$19,000+$75,454=$188,772$94,318+$19,000+$75,454= $188,772 implicit costs ($73,873×0.10)+$55,000=$62,387
Which of the four perfect competition conditions does the following scenario comply with? Select the best answer. A footwear store had a final clearance sale and permanently closed its doors.
Free market entry and exit
Which of the four perfect competition conditions does the following scenario comply with? Select the best answer. Three new bookstores opened near a college campus.
Free market entry and exit
Which option is necessary to calculate implicit costs? Select the best answer.
Leisure time and employee has to give up
Which statement is correct?
In contrast to a perfectly competitive market, a monopoly negatively affects society because it sells a lower quantity of goods at a higher price.
Which elasticity does the following expression solve? Select the best answer. % change in quantity demanded/% change in income
Income elasticity of demand
What should a profit-maximizing monopolist do in the short run given the columns Total Revenue 1 and Total Cost 1 and a current output of 3? Select the best answer.
Increase quantity This is correct because, at an output of3, the marginal profit (marginal revenue minus marginal cost) from increasing output by one is 500 which is positive. Therefore, a profit-maximizing monopolist would increase output.
Which statement describes a legal monopoly?
Most monopolies of this type are utilities and socially beneficial
Which statement is correct?
Musical groups sometimes choose to sell tickets for less than the absolute maximum they be able to charge, often more to obtain more money by selling their merchandise
Based on the following statement, what kind of elasticity does the supply curve have? Select the best answer. The supply curve has a slope of 0.11
Not enough information
Which statement is correct?
Price elasticity might change along the supply or demand curve
A firm had a sales revenue of $1,000,000 last year. It spent $400,000 on labor, $150,000 on capital, and $200,000 on materials. The firm's factory sits on land owned by the firm that it could rent for $30,000per year. What was the firm's economic profit? Write the exact answer. Do not round.
Since all four costs are included in total cost, subtract each one from the firm's total revenue. sales revenue−labor−capital−materials−opportunity cost of land= $1,000,000−$400,000−$150,000−$200,000−$30,000= *220,000*
Consider the spending choices of the following consumer: Kristin's income is spent on chocolate bars and truffles, as well as other goods. She considers chocolate bars to be an inferior good and truffles to be a normal good. What will happen to Kristin's purchases of these goods if her income increases? Select the best answer.
She will buy fewer chocolate bars and more truffles
Consider the spending choices of the following consumer: Lara's income is spent on books and movies, as well as other goods. She considers books to be a normal good and movies to be a normal good. What will happen to Lara's purchases of these goods if her income increases? Select the best answer.
She will buy more books and more movies.
Is the landscaping firm operating in the short run or the long run? Select the best answer. (Table)
Short run
A firm had a sales revenue of $900,000 last year. It spent $400,000 on labor, $150,000 on capital, and $80,000 on materials. What was the firm's accounting profit? Enter the exact value. Do not round.
Since all three costs are explicit costs, subtract each one from the firm's total revenues Profit Sales−Labor−Capital−Materials=Accounting $900,000−$400,000−$150,000−$80,000=$900,000−$400,000−$150,000−$80,000= *270000*
Perfect competition is considered to be "perfect" because both allocative and productive efficiency are met at the same time in long-run equilibrium. Suppose there is a good with a price of $30 and a marginal cost of $20.Based on this information, what action should society take? Select the best answer.
Society will benefit from producing more of the good since the benefits exceed the costs.
Are the following statements true or false? Select the best answer. Statement 1: Productive efficiency is the condition where resources are fairly distributed .Statement 2: In the long run, in perfect competition, market price equals the minimum average cost of production, a condition that is called productive efficiency.
Statement 1 is false; Statement 2 is true.
Are the following statements true or false? Select the best answer. Statement 1: Competitive markets are productively and allocatively efficient because they produce goods and services that people want at the lowest possible cost. Statement 2: Allocative efficiency refers to the ability of price-taking firms to freely enter or exit the market to make the best use of scarce resources.
Statement 1 is true; Statement 2 is false.
Many people are surprised to find out that slavery still exists today. One major concern for people fighting slavery is that some solutions can lead to unintended consequences.Watch the following video regarding elasticity and slave redemption. What is true about the elasticity of supply in the short run? Select the best answer.
Supply is more inelastic in the short run.
Which statement is correct? Select the best answer.
The demand for energy is inelastic in the short run because but much more elastic in the long run.
A monopolist, unlike a competitive firm, has some market power because of barriers to entry. That is, other companies cannot enter the market to create competition in that particular industry. Consider the following scenario. The United States Postal Service, an independent agency of the federal government, is the only agency that can offer certain types of services, such as first-class and standard mail delivery .Is there an entry barrier in this scenario, and if so, what is the source? Select the best answer.
The entry barrier is government-created.
A monopolist, unlike a competitive firm, has some market power because of barriers to entry. That is, other companies cannot enter the market to create competition in that particular industry. Consider the following scenario. The United States Postal Service, an independent agency of the federal government, is the only agency that can offer certain types of services, such as first-class and standard mail delivery. Is there an entry barrier in this scenario, and if so, what is the source?
The entry-barrier is government created
Suppose a perfectly competitive firm faces the following situation: Total Revenue (TR) > Total Cost (TC) at all output levels. What should the firm do in the short run? Select the best answer
The firm should continue to produce in the short run.
Jacob owns a small business. This year, he paid his employees $56,284. Insurance and licensing expenses cost $17,000 The cost of materials was $39,399 Jacob has $190,000 invested in equipment for the business, which could be sold for the same price that he paid for it. If he did not own this equipment, he would have this amount in savings, which could be earning 5% interest. Jacob also received an offer to return to his previous job at a salary of $60,000.Jacob sold 20,000 units of his product this year at a price of $24 Step 1 of 2 : Calculate Jacob's total (economic) costs for this year. Enter your answer in the box below, and round to the nearest whole number if necessary.
The following answer is correct: $182,183 Jacob's explicit costs are: $56,284+$17,000+$39,399=$112,683 His implicit costs are: ($190,000×0.05)+$60,000=$69,500 Then, total (economic) costs are: $112,683+$69,500=$182,183 Don't forget to round to the nearest whole number! Step 2 of 2 : Calculate Jacob's economic profit for this year. His total revenue is: Price×Quantity= $24×20,000=$480,000 Now, you can find economic profit. Economic profit=total revenue−total cost $480,000−$182,183=$297,817
A monopolist is currently producing a level of output such that marginal revenue is $34 and marginal cost is $133. The monopolist then sets a price based on demand for the current level of output. Answer
The monopolist should decrease output and increase price.
In the following situation, what should the monopolist do to maximize profit? Select the best answer. A monopolist is currently producing a level of output such that marginal revenue is $146 and marginal cost is $72. The monopolist then sets a price based on demand for the current level of output.
The monopolist should increase output and decrease price.
Suppose the demand curve shows a price change from $5.50 to $8.00 per water heater. What is the percentage change in quantity demanded?
The percentage change in quantity demanded is 0% because demand is perfectly inelastic.
Suppose the supply curve shows a price change from $21 to $42$ per bus ticket. What is the percentage change in quantity supplied in the short term?
The percentage change in quantity supplied in the short term is 0% because supply is perfectly inelastic
Consider the following scenario: An industry where the fixed costs are extremely high but the marginal cost of adding an additional customer is low Which of the following describes this scenario? Select the best answer.
This is a barrier to entry that is not government-enforced.
Which of the following statements explains why firms in perfect competition earn zero profit in the long run? Select the best answer.
There are no barriers to entry into the industry.
Which of the following statements explains why firms in perfect competition earn zero profit in the long run? Select the best answer.
There are no entry barriers to keep new firms from entering an industry where existing firms earn profits.
Many people are surprised to find out that slavery still exists today. One major concern for people fighting slavery is that some solutions can lead to unintended consequences. Watch the following video regarding elasticity and slave redemption. What was the main economic problem with the slave redeemers?
They unintentionally increased the demand for slaves
San Antonio has regulations that allow only one water company to service the whole city. Which of the following describes this scenario?
This a government-enforced barrier to entry
A pizzeria can produce pizza with the following methods: If the cost of labor is $50$50, and the cost of pizza ovens is $70 which method is the low-cost production method? Select the best answer.
This is correct because Method B (at $630) is a lower production cost than Method A (at $640) and Method C (at $640).
Which definition matches the following term? Inelastic demand
When the elasticity of demand is less than one, indicating the one-percent increase in the price paid by consumer leads to less than one-percent changes in purchases (and vice versa); this indicates a low responsiveness by consumers to price changes.
Suppose the cross-price elasticity of apples with respect to the price of oranges is 0.8, and the price of oranges rises by 5%. What will happen to the demand for apples?
Which two parts of the equation are you given? Select all that apply Cross-price elasticity Percent change in price of Good B .8 * 5=4 * 4 % increase in demand*
Does the following statement describe fungibility? Select the best answer. The $15 Jacob received in a gift card is equal to the $15 he spent on a board game.
Yes, this statement describes fungibility.
Which option correctly completes the blank in the following sentence? Select the best answer. Fixed inputs [blank] easily be increased or decreased in a short period of time.
cannot
Which elasticity does the following expression solve? Select the best answer. % change in Qd of Good A%/ change in price of Good B%
cross-price elasticity of demand
Which option correctly completes the blank in the following sentence? Select the best answer. Diminishing marginal productivity occurs when firms employ more labor and additional output produced [blank].
declines
Which option best completes the blank in the following sentence? Select the best answer.Market price in a perfectly competitive market is solely determined by [blank].
demand and supply
Does the following statement describe economies or diseconomies of scale? Select the best answer. A popular restaurant prematurely opened up new branches across the state and was forced to close down one store due to unexpectedly high output costs.
diseconomies of scale
Consider the following scenario: The government imposes a tax on soda. Under what conditions will soda buyers bear most of the tax burden? Select the best answer.
elastic
The price elasticity of demand for a good is 1.81
elastic
Gems on Display is a manufacturer of jewelry display cases, operating in a perfectly competitive industry. The table below shows the short-run output and cost data for the firm. What is the marginal cost of producing the fifth jewelry display case? Round your answer to two decimal places if necessary.
equation: marginal cost = change in total cost/change in quantity (184-164)/1= 20
Suppose there is a single firm in a market that was formed by demand being relatively small compared to the economies of scale. What type of monopoly or barrier to entry does this describe?
natural monopoly
chapter 9 Which term matches the description below? Select the best answer A situation in which one producer can serve the entire market more efficiently than a number of smaller producers
natural monopoly
Suppose Jennifer initially has an income of $2,000, the price of dinner is $100, and the price of a basketball ticket is $50. To maximize her utility, she initially purchases 10 dinners and 20 basketball tickets. Now, suppose her income increases to $4,000, and she chooses to purchase 24 dinners. Assuming Jennifer spends all of her income, basketball tickets are considered which type of good? Select the best answer.
normal
Based on the following statement, what kind of elasticity does the demand curve have? Select the best answer. The demand curve has a slope of −0.25 The demand curve has a slope of −0.16
not enough information
Supply and/or demand is perfectly elastic for which good?
pens
Which of the following goods has a greater price elasticity of demand?
perfume
The equilibrium price of a good is $5. The demand for this good is more elastic than the supply. Suppose the government introduces a tax on the good. In this case, the price paid by consumers is $6, and the price received by producers is 3 times less. Calculate the tax per good for the group bearing most of the tax burden. Write the exact answer. Do not round.
producers 1) 6/3 = 2 2) 5-2 = 3 * $3 *
Suppose you are in charge of sales at a pharmaceutical company, and your firm has a new drug that clears acne in teenagers. Assume that the company wants to earn as much revenue as possible from this drug. If the elasticity of demand for your company's product at the current price is 0.4, what would you advise the company to do?
raise the price
What was the main economic problem with the slave redeemers? Select the best answer.
they unintentionally increased demand for slaves
hich of the following goods has a greater price elasticity of demand? Select the best answer.
waterfront property
Would a behavioral economist agree with the following statement? Select the best answer. Nasir lost $5 in the vending machine and was reimbursed $5 by vending machine maintenance. Nasir is upset he lost $5.
yes, a behavioral economist would agree with this statement
Imagine you are choosing between purchasing two goods: hot dogs and magazines. Assume both are normal goods.How would you respond to the income effect of an increase in the price of hot dogs? Select the best answer.
you will buy fewer hot dogs and fewer magazines
Which option best completes the blank in the following sentence? Select the best answer. [Blank] elasticity refers to the extreme case where quantity supplied changes by zero amount in response to any change in price.
zero