Micro Final

34. Figure 23.4: In the firm in the above figure produces output level D, it incurs an average fixed cost production equal to the distance

34. Figure 23.4: In the firm in the above figure produces output level D, it incurs an average fixed cost production equal to the distance

Figure 24.1: In the above figure, at the firm's profit maximizing level of output, total revenue is rectangle

A 0P1AQ1

Figure 24.1(Q1-Q5, P1-P5): In the above figure, marginal cost and marginal revenue are equal at output level

A Q5

Advertising by monopolistically competitive firms can do all the following EXCEPT

A lower the consumer's purchase price

. If government regulations significantly increase the cost of operating within a particular market, one result is that

A new firms are discouraged from entering the market

Monopolistic competition is characterized by

A relative ease of entry into the market

. Figure 22.3 (16, 11): According to the above figure, the minimum average total costs for producing chairs occurs at point

A. A

. Figure 23.4: The firm in the above figure breaks even when market price is

A. H

Figure 22.1: In the above figure, at an output level of Q1, total variable cost is

A. OF times Q1

. Suppose a perfectly competitive firm faces the following short run cost and revenue conditions: ATC = $12; AVC = $8; MC = $10. The firm should:

A. decrease output

8. Figure 23.2 (P1-P4): In the above figure, if the price is equal to P4, the firm will

A. earn positive profits

Figure 22.4 (butt, Q1-Q4): In the above figure, for any output level less than Q2, this firm experiences

A. economies of scale

The price elasticity of demand for a good produced by a monopolist

A. equals zero as long as the good has no close substitutes

Perfect competition is characterized by

A. many buyers and sellers

Figure 23.2: In the above figure, point A represents a competitive firm's

A. maximum profit point

40. Which of the following is NOT a barrier to entry?

A. patents

In Table 22.1A, when the firm employs 4 workers, the marginal product will be

B 30 snowboards

. Which of following is NOT a characteristic of monopolistic competition?

B barriers to entry into the market

The law of diminishing returns states that

B successful equal sized increases in labor,when added to fixed factors of production, will result in smaller increases of output

A merger between firms in which one firm purchases an input from the other is called a

B vertical merger

Figure 23.1 (swiggley TC): In the above figure, the market price charged by this firm is

B. $10 per unit of output

Assume that it takes 10 units of labor to produce 4 units of output. When the price of labor is $6 a unit, and when fixed costs are $60, what is the total cost of the 4 units of outputs?

B. $70

In the above figure, the profit maximizing output and price for this monopolistically competitive firm are

B. 10,000 units at a price of $10 per unit

According to Table 23.1A (output and cost x2), if the price is $10 for a firm in a competitive market, then the firm should produce

B. 106 units

Which of the following statements is FALSE?

B. ATC = AFC + AVC

Figure 23.4 (d1-d4): In the above figure, if the firm is operating at d2, then to maximize profits it will produce at output level

B. B

Which of the following is NOT a component of the production function?

B. Cash

2. Figure 22.1 (Q1, Q2, A-F): In the above figure, if this firm produces output level Q2, it has average variable costs of

B. OE

Figure 22.4: In the above figure, the firm experiences constant returns between output levels o

B. Q2 and Q3

If marginal product is negative, then

B. Total product is falling

The most competitive industry of those presented in the above table is likely to industry

B. W

9. Figure 24.2 (Q1-Q4, P1-P4): In the above figure, if the firm is producing at Q3 and charging a

B. decrease input and increase price

When the demand is perfectly elastic, marginal revenue is

B. equal to price

When the marginal cost curve is above the average cost curve, the average cost curve is

B. rising

An oligopoly is a market situation in which

B. there are very few sellers and they recognize their strategic dependence on one another

According to Table 22.2A (labor output), at what usage of labor do diminishing marginal returns begin?

C 4

The firm's short-run costs contain

C Both variable and fixed costs

Figure 24.1: The profit maximizing price and quantity established by the

C Q1 units of output and a price of P1

A monopolist can earn profits in the long run because

C barriers to entry prevent new firms from entering the industry

A firm in a perfectly competitive market maximizes profits when it finds

C the quantity at which total revenue equals total cost

It takes 12 units of labor to produce 5 units of good X and 15 units of labor to produce 6 units of good X. If the price of labor is $4 per unit, what is the marginal cost of the 6th unit of good X?

C. $12

The perfect competitive firm faces

C. A perfectly elastic demand

. Figure 22.2 (Q1, Q2, A-E points): In the above figure, the distance between points C and D is equal to

C. average fixed costs

Which of following is NOT characteristic of a perfectly competitive market?

C. it is difficult for a firm to enter or leave the market

A natural monopoly usually arises when

C. there are large economies of scale relative to the industry's demand

Which of the following statements is FALSE

MC = TC divided by Q

Figure 23.5 (Bushels of wheat): According to the above figure, if the firm is making zero profits, what quantity is the firm selling and at what price?

Q= 1000 P= $5

When the marginal cost curve is above the average cost curve, the average cost curve is

Rising

4. Figure 23.1: In the above figure, at the output level between 5 units and 13 units

1. C the firms economic profits are positive

4. If a firm sells 10 units of output at $100 per unit and 11 units of output when price is reduced to $99, its marginal revenue for the last unit sold is

D $89

The short-run break-even price is the point at which

D marginal cost, price and average variable cost are all equal

. If price is $5, marginal cost is $5, average cost is $3, and the quantity produced is 150 units, then the firm is

D. earning $300 and maximizing profit

Average fixed costs will

D. fall as outputs rises

. A basic distinction between the long run and the short run is that

D. in the short run, complete adjustment of all inputs is impossible, while in the long run all inputs can be adjusted

Which of the following is NOT a short-run decision for a firm?

D. investing in a new addition to the plant

. Monopoly producers are faced with

D. no competitive producers of the same product

. Suppose a perfectly competitive firm faces the following short run cost and revenue conditions: ATC = $6; AVC = $4; MC = $3.50; MR = $3.50. The firm should

D. shut down

Figure 23.2: In the above figure, when price is equal to P1, the firm should

D. shut down