ECON100

When a price ceiling is set for a market, the quantity demanded will be:

Greater than the equilibrium quantity, and price will be less than the equilibrium price.

The main difference to an economist between "short-run" and "long-run" is that

In the long-run all resources are variable where as in the short-run at least one resource is fixed.

Marginal Physical Product

change in additional output. Associate with adding another unit of input

Shift =

line moves

A market shortage is

Caused by a price ceiling.

If supply is unchanged, a rightward shift in the demand curve for gourmet ice cream will result in:

An increase in equilibrium quantity and a higher equilibrium price

Explicit costs:

Are the sum of actual monetary payments made for resources used to produce a good.

Which of the following is consistent with competitive long-run equilibrium?

Average total costs of production are minimized.

In a competitive market, maximum efficiency is achieved because of:

Competitive pressure on prices.

Which of the following does not characterize a competitive market?

High barriers to entry

In a market economy, the _______ determines who gets the goods and services produced

Market Mechanism

Suppose a market has many firms and each firm has some brand image. This type of market is called

Monopolistic competition

Movement =

Move along line. Affect sprice

All points on the production possibilities curve:

Represent the use of all available resources.

Which of the following statements concerning the relationship between total product (TP) and marginal physical product (MPP) is not correct?

TP will fall if MPP is falling

Which of the following is NOT a factor of production?

The money hidden in an old basement.

As more labor is hired in the short run, diminishing returns are observed because:

The new workers have less capital and land to work with.

The maximum output that can be produced from a set of inputs is measured by:

The production function

Investment refers to all of the following except:

The purchase of stock by an individual.

For a monopolist, the demand curve facing the firm is:

The same as the market demand curve

The law of diminishing returns means that:

The total product production function will eventually increase at a decreasing rate

Which of the following is characteristic of a perfectly competitive market?

There are low barriers to entry

average cost curve

Total cost / total output

Diminishing Marginal Utility

Upward sloping

The market mechanism:

Uses prices as a means of communication between consumers and producers.

Law of diminishing return

as input grows relative to another, we expect output to slow down or even decline (when Starbucks over franchised)

According to the law of demand, a demand curve:

downward sloping

demand is

downward sloping

When supply and demand are equal, it is said to be at an _______

equilibrium

For a monopoly in long-run equilibrium, economic profits are likely to be:

greater than zero

Production Function Curve

increasing at increasing rate, increasing at decreasing rate, decreasing Total output produced by given some sort of combination of factor imputs

Total cost

market value of all resources used in production

Price Ceiling

maximum price imposed by Gov

Price Floor

minimum price imposed by Gov, meant to help

Which firms have greatest markest power?

monopolies

what happens when marginal cost _____ marginal revenue in monopolies

profit is maximized

Negative MPP =

result of overcrowding

Ceteris paribus, _______ can change without shifting the demand curve for jackets

the price of jackets

supply is

upward sloping

One HEADLINE article in the text suggests that most Americans do not trust the federal government to do the right thing. If they are correct, then government intervention results in:

A less desirable mix of output.

If a state adopts a free college tuition program, ceteris paribus, economists expect there to be a:

A shortage of college education opportunities in the state.

A monopolist sets price at a point on the _______ curve, corresponding to the rate of output determined by the intersection of _______.

Demand; marginal revenue and marginal cost

If price equals ATC and equals MC then:

Economic profits would be zero

If marginal cost equals price, then _____ is at a maximum

Profit

Ceteris paribus, according to the law of supply, if the price of product Z increases from $6 to $8, then the:

Quantity supplied of Z will increase.

Ceteris paribus, according to the law of supply, if the price of lawn mowing decreases from $50 per lawn to $45 per lawn, then the

Quantity supplied of lawn mowing will decrease.

In order to sell one additional unit of output, a profit-maximizing monopolist must:

Reduce the price of all units sold