ECO2023 Escaleras Exam 3

All of these are explicit costs, EXCEPT:

the salary an entrepreneur could have earned in a corporate job

If a competitive firm can increase its profits by increasing its output, then the firm's:

P > MC

In the short run:

at least one cost is fixed

How are corporations different from partnerships?

Corporations have limited liability but partnerships have unlimited liability.

If the total cost of 3 units is $40 and the total cost of 4 units is $50, the marginal cost of the fourth is:

$10

Suppose that the only café in town can sell five fish dinners per night at a price of $10 each. If this monopoly firm wants to sell six fish dinners, it must reduce the price to $9 each. When the business pursues this strategy to increase sales, the marginal revenue from the sixth dinner sold is:

$4.

A firm in a perfectly competitive industry is maximizing its profits at five hundred units, if the marginal revenue and marginal costs are each $35 and the firm's average total cost is $25, this firm's profit is:

$5,000

The market price of pomegranates is $2, and Joanne sells 25 pomegranates at the local farmer's market. The total revenue is ________ and the marginal revenue is _______ .

$50.00; $2.00

Jen-Chi's Tea House produces 300 four-ounce packets of tea per week. Jen-Chi's variable cost is $14.10 per packet and his fixed cost per week is $1,775. Jen-Chi's total cost per week is:

$6,005

If a perfectly competitive firm has a total revenue that is equal to $400 when its produces one hundred units, and if its total revenue rises tp $406 when it produces one hundred and one units, the marginal revenue of the one hundred and first unit is:

$6.

Staci's Sign Shoppe makes signs for business. Staci is currently producing 300 signs per week with three employees. She hires an additional worker and total output per week rises to 328 signs. The marginal product of the last worker is ______ signs.

28.

A wedding planner determines that one waiter can serve 30 guests, two waiters can serve 70 guests, three waiters can serve 120 guests, four waiters can serve 160 guests, and five waiters can serve 180 guests. The marginal product of the third waiter is _________ guests. A) 40 B) 36 C) 120 D) 50

50

A monopoly firm exhibits all of the following characteristics except:

a marginal revenue curve that equals price at all quantities

For a monopolistically competitive firm, profit is maximized when:

MC = MR

If the price of copper pipes is $70 in a perfectly competitive market, and a firm is producing a quantity at which the marginal cost is $65, is this firm maximizing profit?

No, this firm should be producing more to maximize profit.

If the market price is $60, a firm's minimum average total cost is $70, and minimum average variable cost is $50, what should the firm do in this perfectly competitive market?

The firm should continue producing in the short run in order to minimize losses.

Which of these inputs can be altered in the short run?

The number of hours that existing employees work.

If Glass Inc. produces 80 window panes per day at the market price of $60 in a perfectly competitive market, what would happen to price if Glass Inc. increases production to 120 window panes, all else equal?

The price would remain the same.

All of these are characteristic of monopolistic competition, EXCEPT:

barriers to entry

Which of the following is NOT an explicit cost?

earnings that the owner could have earned at an alternate job

The reason monopolistic competitive firms have difficulty maintaining a profit in the long run is that:

ease of entry into the market encourages new firms to enter and force down the price

In a perfectly competitive industry, short-run economic profits will lead firms to _____ the market, causing market price to _____.

enter; decrease

Justin owns a home entertainment installation company. One employee can complete two installations per month; two employees can complete 5 installations, three employees can complete 9 installations, four employees can complete 12 installations, and five employees can complete 11 installations. Diminishing marginal returns begin with the ________ worker.

fourth

If the marginal revenue for the next unit being produced is $50, but the marginal cost is $45, the firm should:

increase production

What are the two types of advertising?

informational and persuasive

If a firm is producing where price exceeds average variable cost, the firm should continue production even though it will incur a loss, since:

it can cover its variable costs (payroll, utilities, etc.) and have some funds left over to apply toward paying fixed costs.

Compared with a competitive market, a cartel as a whole will produce:

less output in order to increase prices

Walmart is able to order huge quantities of shovels and rakes at very low prices from many different factories in China as it opens more stores. This best represents:

long-run economies of scale

Perfectly competitive firms and monopoly firms should increase production when:

marginal revenue is greater than marginal cost

Which of these is NOT part of the basic setup of a game?

mistakes

If the owner of a concert hall wishes to use third-degree price discrimination to price its tickets at $20, $15, and $10, it should price tickets lower for customers who are:

more elastic in their demand for tickets

Compared to a competitive industry, a monopolist is likely to achieve _____ producer surplus while generating _____ deadweight loss.

more; more

Murphy's Gas Station constantly monitors the price of unleaded gas at Johnson's Gas Station. If Johnson's lowers the price of gas, so will Murphy's. This is an example of:

mutual interdependence

Which of these characteristics of an oligopoly market structure?

mutual interdependence

Which characteristic is found in a perfectly competitive market?

no barriers to market entry or exit

All of these are necessary for perfect competition, EXCEPT:

only one product

When market structure has many relatively small buyers and sellers, a standardized product, good information to both buyers and sellers, and no barriers to entry or exit?

perfect competition

Which market structure does not exhibit a downward-sloping demand curve for the firm?

perfect competition

In the long run, which of the following is true for a monopolistic competitive firm?

price equals average total cost and MR = MC.

A perfectly competitive firm is a:

price taker; it must accept the market equilibrium price.

Suppose that a monopoly in the market for an HIV drug turns competitive after another company discovers another cure. What is likely to happen to prices and quantity in this market?

prices would fall, but quantity would rise

Product differentiation:

reduces price elasticity of demand

The taxi industry in many cities has lobbied politicians to increase driver requirements for ride-sharing companies such as Uber in order for them to operate legally. The money spent by the taxi industry for this purpose is:

rent-seeking

Consumers often seek bargains by purchasing goods in large quantities; for example, buying in bulk at Costco or buying larger boxes of cereal so the price per ounce is lower. These purchasing strategies result in which form of price discrimination?

second-degree price discrimination

When business offers its customers a bulk discount, they are practicing:

second-degree price discrimination

Jim Delaney employs five people to make pizzas for his neighborhood. He makes $4,000 in profit per month, which he pays himself. This firm is an example of a:

sole proprietorship

If a firm can change all of its factors of production, then it is operating in:

the long run

Normal profits for a competitive firm occur when:

the price equals average total cost