ap micro final

as its output increases, a firm's short-run marginal cost will eventually increase because of

e) diminishing returns

the profit-maximizing level of output for this firm is

e) impossible to determine from the information given

if the marginal cost curve of a monopolist shifts up, which of the following will occur to the monopolist's price and output?

e) increase; decrease

the payoff matrix above shows the profits associated with the strategic decisions of two oligopoly firms, Bright Company and Sparkle Company. the first entries in each cell show the profits to Bright and the second the profits to Sparkle. What are the dominant strategies for Bright and Sparkle, repsectively?

e) no dominant strategy; strategy 1

assume a consumer finds that his total expenditure on compact discs stays the same after the price of compact discs declines. which of the following is true for this price change?

e) the consumer's demand for compact discs is unit price elastic.

which of the following situations would necessarily lead to an increase in the price of peaches?

A) the wage paid to peach farm workers rises at the same time that medical researchers find that eating peaches reduces the chances of a person's developing cancer.

a perfectly competitive producer of steel rods and steel beams employs 100 workers with identical steals. if steel rods and steel beams sell for the same price, which of the following rules should the producer always follow to use the 100 workers efficiently? I. allocate workers so that the average cost of producing beams equals the average cost of producing rods. II. allocate workers so that the marginal product of labor is the same in both rod production and beam production. III. allocate half the workers to rod production and half the workers to beam production.

B) II only

scarcity is correctly describe by which of the following statements? I. scarcity exists if there are more uses for resources than can be satisfied at one time. II. scarcity exists if decisions must be made about alternative uses for the resources. III. Scarcity would not exist in a society in which people wanted to help others instead of themselves.

D. I and II only.

the marginal cost of producing the fourth unit of output is

a) $4

the graph above shows the market for good x. the letters in the graph denote the enclosed areas. if the government imposes and excise tax of t dollars on each unit of good x, which of the following represents the consumer surplus. producer surplus, and deadweight loss after the imposition of the tax?

a) A; G; D+E

the diagram above shows the demand and supply curves for a normal good. the equilibrium price could rise from P1 to P2 if..

a) consumers income increased.

for a firm hiring labor in a perfectly competitive labor market, the marginal revenue product curve slopes downward after some point because as more of a factor is employed, which of the following declines?

a) marginal product.

a market is clearly NOT perfectly competitive if which of the following is true in equilibrium?

a) price exceeds marginal cost.

the total amount of tax collected by the government is equal to

b) P1GIP2

if firms in a perfectly competitive industry have been dumping toxic waste free of charge into a river, government action to ensure a more efficient use of resources would have which of the following effects on the industry's output and product price?

b) decrease; increase

at the price 0A, economic profits are

b)ABKH

the total variable cost of producing five units of output is

c) $30

if a perfectly competitive industry is in long run equilibrium, which of the following is most likely to be true?

c) firms are earning a return on investment that is equal to their opportunity costs.

which of the following bears the total tax burden?

c) the consumer and the producers each bear a part of it.

in the short run, the firm will stop production when the price falls below

d) 0D

the deadweight loss created by the tax is equal to

d) GKI

which of the following is always true of the relationship between average and marginal costs?

d) average variable costs are increasing when marginal costs are higher than average variable costs.

a lorenz curve can be used to evaluate which of the following economic issues?

d) the degree of equity in income distribution

from the point of view of economic efficiency, a monopolist produces

d) too little of a good and charges too high a price