Micro

Picture 1 100 100 100.00 30 Refer to the data for a nondiscriminating monopolist. This firm will maximize its profit by producing:

4 units.

Picture Which of the diagrams correctly portrays a nondiscriminating pure monopolist's demand (D) and marginal revenue (MR) curves?

B.

Picture a 20 Refer to the data. The industry characterized by the information is:

an oligopoly.

Which of the following will not hold true for a competitive firm in long-run equilibrium?

P equals AFC.

For a purely competitive firm, total revenue:

has all of these characteristics.

Picture Refer to the diagram. The monopolistically competitive firm shown:

is realizing an economic profit.

The monopolistically competitive seller's demand curve will become more elastic the:

larger the number of competitors.

Assume a purely competitive, increasing-cost industry is in long-run equilibrium. If a decline in demand occurs, firms will:

leave the industry and price and output will both decline.

The Sherman Act was designed to:

make monopoly and acts that restrain trade illegal.

A competitive firm in the short run can determine the profit-maximizing (or loss-minimizing) output by equating:

marginal revenue and marginal cost.

An industry comprised of 40 firms, none of which has more than 3 percent of the total market for a differentiated product, is an example of:

monopolistic competition.

The restaurant, legal assistance, and clothing industries are each illustrations of:

monopolistic competition.

The marginal revenue product schedule is:

the firm's resource demand schedule.

Monopolistically competitive and purely competitive industries are similar in that:

there are few, if any, barriers to entry.

Answer the question on the basis of the demand schedule shown below: Picture 7 1 Refer to the data. The marginal revenue obtained from selling the third unit of output is:

$3.

Answer the question on the basis of the following information for Manfred's Shoe Shine Parlor. Assume Manfred hires labor, its only variable input, under purely competitive conditions. Shoe shines are also sold competitively. Picture 0 0 - - Refer to the given data. At what price does each shoe shine sell?

$3.

Answer the question on the basis of the information given in the following table: Picture 0 0 3 Refer to the given data. If the firm is hiring workers under purely competitive conditions at a wage rate of $22, it will employ:

3 workers.

Which of the following is most likely to increase the Herfindahl index of a particular industry?

A horizontal merger between two of the industry's largest firms.

Picture Refer to the diagram where the numerical data show profits in millions of dollars. Beta's profits are shown in the northeast corner and Alpha's profits in the southwest corner of each cell. With independent pricing, the outcome of this duopoly game will gravitate to cell:

D.

If a firm is hiring variable resources D and F in perfectly competitive input markets, it will minimize the cost of producing any level of output by employing D and F in such amounts that:

MPD/PD = MPF/PF.

When a monopolistically competitive firm is in long-run equilibrium:

MR = MC and P > minimum ATC.

In the short run, a purely competitive firm will always make an economic profit if:

P > ATC.

Picture Refer to the diagram for a purely competitive producer. The lowest price at which the firm should produce (as opposed to shutting down) is:

P2.

Which of the following is characteristic of a purely competitive seller's demand curve?

Price and marginal revenue are equal at all levels of output.

Which of the following is not a barrier to entry?

X-inefficiency.

A purely competitive seller is:

a "price taker."

Suppose Slow Ketchup requires that, as a condition of purchase, all restaurants using its product must buy and make available its new sales product. This arrangement is an example of:

a tying contract.

Picture Refer to the diagram. At the profit-maximizing output, total fixed cost is equal to:

BCFG.

Tying contracts are illegal under the:

Clayton Act of 1914.

Other things equal, we would expect the labor demand curve of a monopolistic seller to:

decline more rapidly than that of a purely competitive seller.

Price-fixing:

is a per se violation of the antitrust laws.

A monopolistically competitive firm's marginal revenue curve:

is downsloping and lies below the demand curve.

Assuming a firm is selling its output in a purely competitive market, its resource demand curve can be determined by:

multiplying marginal product by product price.

We would expect a cartel to achieve:

neither allocative efficiency nor productive efficiency.

Picture Refer to the diagram for a monopolistically competitive firm in short-run equilibrium. This firm's profit-maximizing price will be:

$16.

A monopolistic firm has a sales schedule such that it can sell 10 prefabricated garages per week at $10,000 each, but if it restricts its output to 9 per week it can sell these at $11,000 each. The marginal revenue of the tenth unit of sales per week is:

$1,000.

Answer the question on the basis of the following data: Picture 1 15 45 1 8 24 Refer to the given data. If the prices of labor and capital are $9 and $15 respectively, and labor and capital are the only inputs, the firm's economic profits will be:

$102.

Picture Refer to the diagrams, which pertain to a purely competitive firm producing output q and the industry in which it operates. Which of the following is correct?

The diagrams portray short-run equilibrium but not long-run equilibrium.

DASH Airlines is considering the addition of a flight from Red Cloud to David City. The total cost of the flight would be $1,100, of which $800 are fixed costs already incurred. Expected revenues from the flight are $600. DASH should:

add this flight because marginal revenue exceeds marginal costs and total revenue exceeds total variable cost.

Picture Refer to the diagram. This firm is selling in:

an imperfectly competitive market.

The MR = MC rule can be restated for a purely competitive seller as P = MC because:

each additional unit of output adds exactly its price to total revenue.

The mutual interdependence that characterizes oligopoly arises because:

each firm in an oligopoly depends on its own pricing strategy and that of its rivals.

The legal cartel theory of regulation argues that:

firms in certain industries want to be regulated rather than face the rigors of competition.

A decline in the price of resource A will:

increase the demand for complementary resource B.

Assume the XYZ Corporation is producing 20 units of output. It is selling this output in a purely competitive market at $10 per unit. Its total fixed costs are $100 and its average variable cost is $3 at 20 units of output. This corporation:

is realizing an economic profit of $40.

A natural monopoly occurs when:

long-run average costs decline continuously through the range of demand.

Monopolistically competitive firms:

may realize either profits or losses in the short run but realize normal profits in the long run.

Product variety is likely to be greater in:

monopolistic competition than in pure competition.

If a purely competitive firm is producing at the MR = MC output level and earning an economic profit, then:

new firms will enter this market.

Economic analysis of a monopolistically competitive industry is more complicated than that of pure competition because:

of product differentiation and consequent product promotion activities.

Economic profit in the long run is:

possible for a pure monopoly but not for a pure competitor.

A firm finds that at its MR = MC output, its TC = $1,000, TVC = $800, TFC = $200, and total revenue is $900. This firm should:

produce because the resulting loss is less than its TFC.

Picture Refer to the diagram for a natural monopolist. If a regulatory commission set a maximum price of P2, the monopolist would:

produce output Q3 and realize a normal profit.

If MPa/Pa = MPb/Pb and MRPa/Pa = MRPb/Pb > 1, this firm is:

producing its output with the least costly combination of resources but is not producing the profit-maximizing output.

The vertical distance between the horizontal axis and any point on a nondiscriminating monopolist's demand curve measures:

product price and average revenue.

Assume that a restaurant is hiring labor in an amount such that the MRC of the last worker is $16 and her MRP is $12. On the basis of this information, we can say that:

profits will be increased by hiring fewer workers.

Answer the question on the basis of the following data confronting a firm: Picture 1 16 16 Refer to the data. This firm is selling its output in a(n):

purely competitive market.

A competitive employer should hire additional labor as long as:

the MRP exceeds the wage rate.

Marginal product is:

the amount an additional worker adds to the firm's total output.

If a firm in a purely competitive industry is confronted with an equilibrium price of $5, its marginal revenue:

will also be $5.

If a nondiscriminating imperfectly competitive firm is selling its 100th unit of output for $35, its marginal revenue:

will be less than $35.

Creative destruction is least beneficial to:

workers in the "destroyed" industries.

Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market: Picture 1 100.00 17.00 117.00 17 Refer to the data. If the market price for the firm's product is $12, the competitive firm should produce:

zero units at a loss of $100.

Answer the question on the basis of the following marginal product data for resources a and b. The output of these independent resources sells in a purely competitive market at $1 per unit. Picture 1 25 1 40 Refer to the given data. Assuming the prices of resources a and b are $5 and $8 respectively, when the firm hires the profit-maximizing combination of resources, its economic profit will be:

$170.

Answer the question on the basis of the following information for a pure monopolist: Picture 0 250 500 The given nondiscriminating monopolist should set its price at:

$200.

Answer the question on the basis of the following demand and cost data for a specific firm: Picture 11.00 10.00 6 6 61 Refer to the data. If columns (1) and (3) of the demand data shown are this firm's demand schedule, economic profit will be:

$8.

Answer the question on the basis of the following demand and cost data for a specific firm: Picture 11.00 10.00 6 6 61 Refer to the data. If columns (1) and (3) of the demand data shown are this firm's demand schedule, the profit-maximizing price will be:

$9.

The Herfindahl index for a pure monopolist is:

10,000.

Assume six firms comprising an industry have market shares of 30, 30, 10, 10, 10, and 10 percent. The Herfindahl index for this industry is:

2,200.

Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market. Picture 1 150.00 25.00 175.00 25.00 Refer to the data. If the market price for this firm's product is $35, it will produce:

6 units at a loss of $90.

Answer the question on the basis of the following data: Picture 1 15 45 1 8 24 Refer to the given data. If the prices of labor and capital are $9 and $15 respectively, at the profit-maximizing level, the firm's total output will be:

64 units.

Picture Which of the diagrams correctly portrays the demand (D) and marginal revenue (MR) curves of a pure monopolist that is able to price discriminate by charging each customer his or her maximum willingness to pay?

A.

Which of the following is not a valid generalization concerning the relationship between price and costs for a purely competitive seller in the short run?

Price must be at least equal to average total cost.

Suppose the firms in a five-firm industry have market shares of 30, 30, 20, 10, and 10 percent, respectively. The Herfindahl index for the industry is:

2,400.

Answer the question on the basis of the following table showing market shares of firms in hypothetical industries. Assume these are distinct industries with no buyer-seller relationships or competition among them. Picture 30 30 20 20 - - Refer to the table. The Herfindahl index for Cappa is:

2,500.

Answer the question on the basis of the data contained in the following table. Assume that the firm is hiring labor in a purely competitive market. Picture Refer to the given data. If the wage rate is $20, how many workers will the firm choose to employ?

2.

Answer the question on the basis of the following marginal product data for resources a and b. The output of these independent resources sells in a purely competitive market at $1 per unit. Picture 1 25 1 40 Refer to the given data. Assuming the prices of resources a and b are $5 and $8 respectively, what is the least costly combination of resources for the firm to employ in producing 192 units of output?

3 of a and 4 of b.

Answer the question on the basis of the following information. A farmer who has fixed amounts of land and capital finds that total product is 24 for the first worker hired; 32 when two workers are hired; 37 when three are hired; and 40 when four are hired. The farmer's product sells for $3 per unit and the wage rate is $13 per worker. Refer to the given information. What is the farmer's profit-maximizing output?

37.

Which of the following distinguishes the short run from the long run in pure competition?

Firms can enter and exit the market in the long run but not in the short run.

A profit-maximizing firm employs resources to the point where:

MRP = MRC.

Suppose the demand for strawberries rises sharply, resulting in an increased price for strawberries. As it relates to strawberry pickers, we could expect the:

MRP curve to shift to the right.

Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market. Picture 1 150.00 25.00 175.00 25.00 Refer to the data. The marginal cost column reflects:

The law of diminishing returns.

If a regulatory commission wants to establish a socially optimal price for a natural monopoly, it should select a price:

at which the marginal cost curve intersects the demand curve.

Under pure competition in the long run:

both allocative efficiency and productive efficiency are achieved.

A conglomerate merger:

can extend the line of products sold, extend the territories in which products are sold, or combine totally unrelated products.

Game theory can be used to demonstrate that oligopolists:

can increase their profits through collusion.

Suppose that at 500 units of output marginal revenue is equal to marginal cost. The firm is selling its output at $5 per unit and average total cost at 500 units of output is $6. On the basis of this information, we:

cannot determine whether the firm should produce or shut down in the short run.

Secret conspiracies to fix prices are examples of:

covert collusion.

Picture Refer to the diagram. Equilibrium price is:

d.

If an oligopoly is faced with a kinked-demand curve that is relatively elastic above, and relatively inelastic below, the going price, then it will:

decrease total revenue by either increasing or decreasing price.

Price is constant to the individual firm selling in a purely competitive market because:

each seller supplies a negligible fraction of total supply.

Picture Refer to the diagram where the numerical data show profits in millions of dollars. Beta's profits are shown in the northeast corner and Alpha's profits in the southwest corner of each cell. If both firms follow a high-price policy:

each will realize a $20 million profit.

Concentration ratios may be inaccurate indicators of the degree of monopoly power in an industry because:

foreign competition is not considered.

If a purely competitive constant-cost industry is realizing economic profits, we can expect industry supply to:

increase, output to increase, price to decrease, and profits to decrease.

Answer the question on the basis of the following information: Suppose a firm hires both labor (L) and capital (C) under purely competitive conditions. The price of labor is PL and that of capital is PC. The marginal product of labor is MPL and that of capital is MPC. The firm sells its product competitively at a price of PX. Refer to the given information. In competitive labor markets, the marginal cost of an additional unit of labor:

is equal to PL.

The Clayton Act of 1914:

outlawed price discrimination, tying contracts, acquisition of stocks of competing corporations, and interlocking directorates that lessen competition.

Concentration ratios measure the:

percentage of total industry sales accounted for by the largest firms in the industry.

Suppose a firm in a purely competitive market discovers that the price of its product is above its minimum AVC point but everywhere below ATC. Given this, the firm:

should continue producing in the short run but leave the industry in the long run if the situation persists.

A competitive employer is using labor in such an amount that labor's MRP is $10 and its wage rate is $8. This firm:

should hire more labor because this will increase profits.

Assume that an appliance manufacturer is employing variable resources X and Y in such amounts that the MRPs of the last units of X and Y employed are $100 and $60 respectively. Resource X can be hired at $50 per unit and resource Y at $20 per unit. The firm:

should hire more of both X and Y.

Which of the following statements applies to a purely competitive producer?

It will not advertise its product.

Picture Refer to the diagram. To maximize profits or minimize losses, this firm should produce:

E units and charge price A.

Picture Refer to the diagram. To maximize profit or minimize losses, this firm will produce:

E units at price A.

In the long run, a profit-maximizing monopolistically competitive firm sets it price:

above marginal cost.

Answer the question on the basis of the following demand and cost data for a specific firm: Picture 11.00 10.00 6 6 61 Refer to the data. If columns (1) and (3) of the demand data shown are this firm's demand schedule, the profit-maximizing level of output will be:

8 units.

Answer the question on the basis of the following information. A farmer who has fixed amounts of land and capital finds that total product is 24 for the first worker hired; 32 when two workers are hired; 37 when three are hired; and 40 when four are hired. The farmer's product sells for $3 per unit and the wage rate is $13 per worker. Refer to the given information. The marginal revenue product of the second worker is:

$24.

Picture 1 100 100 100.00 30 Refer to the data. At its profit-maximizing output, this firm's total revenue will be:

$280.

Assume labor is the only variable input and that an additional input of labor increases total output from 72 to 78 units. If the product sells for $6 per unit in a purely competitive market, the MRP of this additional worker is:

$36.

Answer the question on the basis of the following data confronting a firm: Picture 1 16 10 Refer to the data. At the profit-maximizing output, the firm's total revenue is:

$48.

Which of the following gave the Federal Trade Commission responsibility to protect the public against false and misleading advertising?

Wheeler-Lea Act of 1938.