Econ FInal

The Big Blue Sky Jet company has long-run total costs of $20 million if it produces 5 jets and long-run total costs of $24 million if it produces 6 jets. The Big Blue Sky jet company is experiencing

b. constant returns to scale

The amount by which total cost rises when the firm produces one additional unit of output is called

b. Marginal Cost

Refer to Figure 14-12 If the figure in panel (a) reflects the long-run equilibrium of a profit maximizing firm in a competitive market, the figure in panel (b) most likely reflects

b. Perfectly elastic long-run market supply

Which of the following best describes the idea of excess capacity in monopolistic competition?

b. The output produced by a typical firm is less than what would occur at the minimum point on its ATC curve

Suppose Ireland exports beer to China and imports pineapples from the United States. This situation suggests that

Ireland has a comparative advantage to China in producing beer, and the United States has a comparative advantage relative to Ireland in producing pineapples.

A firm that wants to achieve economies of scale could do so by

a,. assigning limited tasks to its employees, so they can master those tasks

Refer to Figure 16-3 How much consumer surplus will be derived from the purchase of this product at the monopolistically competitive price?

a. $200

Refer to table 15-3 The marginal cost of the 4th Unit is

a. $7

Which of the following conditions is characteristic of a monopolistically competitive firm in long-run equilibrium?

b ATC=demand and MR=MC

The deadweight loss from production for this firm is represented by which of the following areas?

c. BHJ

Refer to Figure 15-17 Which of the following areas represents the deadweight loss from this profit-maximizing monopolist

c. EFG

If a firm experience constant returns to scale at all output levels, then its long-run average total cost curve would

b. be horizontal

Int he long run the local coffee shop incurs total costs of $625 when output is 1,250 cups of coffee and $750 when output is 1,500 cups of coffee, For this range of output, the coffee ship exhibits

b. constant returns to scale

Which of the following statements is correct?

c. Monopolistic competition is similar to perfect competition because both market structures are characterized by perfectly elastic demand curves for firms

Diminishing marginal product suggests that the marginal

c. Product of an extra worker is less than the previous workers marginal product

A similarity between monopoly and monopolistic competition is that in both market structures

c. Sellers are price makers rather than price takers

What is the marginal cost of the 8th unit of output?

d. $32.00

For any country that allows free trade

d. the domestic price is equal to the world price

Refer to Figure 15-18 If the monopoly firm perfectly price discriminates, then consumer surplus amounts to

a. $0

Refer to Figure 15-7 Which of the following areas represents the consumer surplus from this profit-maximizing monopolist?

a. ABE

A long-run supply curve is flatter than a short-run supply curve because

a. Firms can enter and exit a market more easily in the long run than in the short run

The profit maximizing rule for a firm in a monopolistically competitive market is to always select the quantity at which

a. Marginal revenue is equal to marginal cost

Which of these types of firms can earn a positive economic profit in the long run?

a. Monopolies, but not competitive firms or monopolistically competitive firms

Which of the following statements is correct? -Monopolistic Competition

a. Monopolistic competition is similar to monopoly because both market structures are characterized by firms being price makers rather than price takers

In a competitive market,

a. No single buyer or seller can influence the price of the product

What do economists call the business practice of selling the same good at different prices to different customers?

a. Price discrimination

Which of these types of costs can be ignored when an individual or a firm is making decisions?

a. Sunk Cost

Entry into a market by new firms will increase the

a. Supply of the good

Refer to Figure 14-3 If the market price is $10, what is the firm's short-run economic profit?

b. $15

Refer to Figure 15-9 The deadweight loss caused by a profit-maximizing monopoly amounts to

b. $500

In order to maximize its profit, the firm will choose to produce

b. 100 units of output, and its profit will be zero

Refer to Figure 14-10 If there are 700 identical firms in this market, what is the value of Q1?

b. 210,000

Suppose the government forced Beatrice's to produce at the efficient scale of output. Who would be better off as a result of this policy? Who would be worse off as a result of this policy?

b. Consumers would be better off; Beatrice would be worse off.

The deadweight loss created by the tariff is represented by the area

b. D+F

A monopolistically competitive market is characterized by

b. Differentiated products, but not long run profits

Refer to Figure 16-4 Which of the following will occur in the long run in this industry?

b. Firms will enter this industry.

Refer to Figure 9-22 Suppose the government imposes a tariff of $20 per unit. The amount of revenue collected by the government from the tariff is

c. $12,000

Refer to Figure 16-12 How much cost per unit could this firm save by producing the efficient level of output rather than the profit-maximizing level of output?

c. $2

How much profit will the monopolistically competitive firm earn in this situation?

c. $200

Refer to Table 15-9 What price should the monopoly charge to maximize profit?

c. $24

When a profit maximizing firm is earning profits can be identified by

c. (P-ATC) x Q

Monopolistic competition differs from perfect competition because in monopolistically competitive markets,

c. Each of the sellers offers a somewhat different product

In a monopolistically competitive market,

c. Firms can enter or exit the market without restrictions

Hotels in NYC frequently experience an average vacancy rate of about 20% This kind of excess capacity is indicative of what kind of market?

c. Monopolistic Competition

The difference between accounting profit and economic profit relates to

c. The manner in which costs are defined

Which of the following represents the firm's long-run condition for eating a market?

c. exit if P<ATC

An example of an explicit cost of production would be the

c. lease payments for the land on which a firm's factory stands

An example of an opportunity cost that is also an implicit cost is

c. the value of the business owner''s time

Trade enhances the economic well-being of a nation in the sense that

c. trade results in an increase in total surplus

Refer to Fig 9-17 With trade and tariff, consumer surplus is

d. $1,024 and producer surplus is $392

Refer to Table 15-2 What is Tanya's profit-maximizing price?

d. $8

Suppose Jan started up a small lemonade stand business last month. Variable costs for Jan's lemonade stand now include the cost of

d. All of the Above -lemons and sugR -paper cups -the wages paid to her hourly workers

In which of the following market structures can a firm earn an economic profit in the short run?

d. All of these market structures can earn an economic profit in the short run

Which of the following is not a reason for the existence of a monopoly?

d. Diseconomies of Scale

The average total cost curves on the diagram labeled ATC1, ACT2, ACT3 most likely correspond to three different

d. Factory sizes

Regulation of a firm in a monopolistically competitive market (q31 in original)

d. Is unlikely to improve market efficiency

Which of the following is an example of a barrier to entry?

d. John obtained a copyright for the song he wrote and recorded

Refer to Figure 16-9 In response to the situation represented by the figure we would expect

d. None of the above are correct

In a competitive market the current price is $5. The typical firm in the market has ATC=$5.oo and AVC= $4.50

d. The firm will earn zero profits in both the short run and long run

In perfect competition as well as in monopolistic competition,

d. There are many firms in a single market

The price of sugar that prevails in international markets is called the

d. World price of Sugar

If marginal cost is greater than average total cost, then

d. average total cost is increasing

In the long run,

d. both monopolistically competitive and perfectly competitive firms produce where P=ATC

In both perfect competition and monopolistic competition, each firm,

d. has many competitors