ECON 202

Assume a firm in a competitive industry is producing 800 units of output, and it sells each unit for $6. Its average total cost is $4. Its profit is

$1,600

Because of diminishing returns, a factor in abundant supply has a

Low marginal product and a low rental price

The shape of the average total cost curve reveals information about the nature of the barrier to entry that might exist in a monopoly market. which of the following monopoly types best coincides with the figure

Natural monopoly

Monopolistic competition is considered efficient because

Price exceeds marginal cost

Reefer to figure 13-1. The graph illustrates a typical

Production function

If the market price is $10 what is the firms short run economic profit? Look at graph

$15

Given that Bear Claws choose the profit maximizing price and quality, what level will it obtain? Look at Graph

$280

Suppose the firm hires each unit of labor for $600 per week, and each unit of output sells for $9 What is the value of the marginal product of the third worker... Look at graph

$675

A competitive firm sells its output for $60 per unit. Assume that labor is only input that varies for the firm. The marginal product of the 10th worker is 20 units of output per day; the marginal product of the 11th worker is 16 units of output per day. The firm pays its workers a wage of $150 per day. For the 11th worker, the value of the marginal product of labor is ...

$960

Based upon the information shown, how many units for bear claws produce to maximize profits?

70

Let L represent the number of workers hired by a firm, and let capital Q represent that firms quantity of output. Assume two points on the firms production function are (L-12, Q=122) and (L =13, Q=130). Then the marginal product of the 13th worker is

8 units of output

Which of the curves is most likely to represent average fixed cost? Look at graph

A

Adibok know that it produces and sells high quality shoes. Workout knows that it produces and sells low quality shoes. According to the advertising

Adibok had an incentive to spend a larger amount on advertising for its shoes, workout does not

Which of the following does not explain the rise in income inequality in the United States from 1970 to 2017?

And increase in minimum wage

According to the signaling theory of education, better educated workers

Are likely to be high ability workers

If a firm in a monopolistic competitive market successfully uses advertising to decrease elasticity of demand for its product, the firm will

Be able to increase its markup over marginal cost

Dr. Benson is regarded as, by, far the best dentist in his part of the country, yet his income is not significantly higher than the average income for a dentist in his area. In contrast, Bo Johnson, the best baseball player in that region, earns five times the average salary of all baseball players. The most likely explanation is that

Bo Johnson, unlike Dr. Benson, can provide his services to millions of people simultaneously

The efficient scale of production occurs at which quantity... Look at the graph

C

A change in the supply of one factor of production

Can alter the earnings of all the other factors

price discrimination

Can maximize profits if the seller can prevent the resale of goods between customers

A disadvantaged associate with in kind transfers to reduce poverty is that they

Do you not allow poor families to make purchases based on their preferences

If long run average total cost decreases as the quality of output increases, the firm is experiencing

Economics of scale

According to the human capitol review, education

Enhances productivity

Robin owns a horse stable and riding academy and gives riding lessons for children at "pony camp". His business operates in a competitive industry, Robin gives riding lessons to 20 children per month. His monthly total revenue is $4000. The marginal cost of pony camp is $250 per child. In order to maximize profits, robin should

Give riding lessons to fewer than 20 children per month

Which of the graphs illustrate the demand curve most likely faced by a firm in a Monopolistically competitive market? Look at graph

Graph B

An oligopolistic Will increase production if the output effect is

Greater than the price effect

ChloeGuilherme both work at the local factory producing cars. Chloe earns $22 per hour working the day shift....

Higher paying job has a compensating wage differential of $3 per hour

Economic just study poverty and income in equality to answer which of the following questions?

How much any quality is there in society

"The firm hires the factor up to the point where the value of the factors marginal product is equal to the factors price," This statement applies to which factor of production?

Land, labor, and capital

The firm should shut down if the market price is... Look at the graph

Less than $6

I society consist of three individuals: Stadium, Christian, and Ulyana. In terms of income income and utility, Sam is currently best off, Tristan ranks in the middle, and Ulyana is worst off. Which of the following statements is correct?

Liberalism suggests that government policies should strive to increase Ulyana's utility

To maximize total surplus, a benevolent social planner would choose which of the following outcomes

Q = 45 P = 45

The Sherman antitrust act

Restricted the ability of competitors to engage in cooperative agreements

Refer to figure 20-2. Which of the following is consistent with the data reported in the figure ?

The female poverty rate is higher for all age groups than the male poverty rate

Farmer Macdonald sells wheat to a broker in Kansas City, MO. Because the market for wheat is generally considered competitive, Mr McDonald maximizes his profits by choosing

The quantity at which market price is equal to Mr. McDonalds marginal cost of production

A monopolistically competitive firm chooses

The quantity of output to produce, but the price of its output is determined by demand

Refer to figure 19.1. If minimum wage in this market is $8 then

There is a surplus of 3 million workers

A recent law school graduate is considering two offers to practice law, one in New York and the other in Illinois. The New York bar exam is very difficult to pass compared with Illinois exam. Assuming all other things equal, the attorney would expect

To make a lower wage in Illinois

An extra dollar of income give you some more additional satisfaction to a poor....

Utilitarianism

Curve A is always declining because

We are dividing fixed costs by higher and higher levels of outputs

In the short run, if the market price is P4 , individual firms in a competitive industry will earn .. look at graph

Zero profits

Which of the following examples illustrates an oligopoly market ?

a city with two firms who are licensed to sell school uniforms for the local schools

For an individual firm operating in a competitive market, marginal revenue equals

average revenue and the price for all levels of output

Because a firm's demand for a factor of production is derived from its decision to supply a good in the market, it is called a

derived demand

In the prisoners dilemma game, self interest leads

each prisoner to confess.

A benefit to society of the patent and copyright laws is that those laws

encourage creative activity

Firms may experience diseconomies of scale when

large management structures are bureaucratic and inefficient

A market structure with only a few sellers, each offering similar or identical products, is known as

oligopoly

A cooperative agreement among Oligopolists is more likely to be maintained

the more likely it is that the game among the oligopolists will be played over and over again

As the number of firms in an oligopoly increases,

the total quantity of output produced by firms in the market gets closer to the socially efficient quantity.