G300 quiz

You are the manager of a monopoly that faces a demand curve described by P = 230 − 20Q. Your costs are C = 5 + 30Q. Your firm's maximum profits are

495

You are the manager of a firm that sells its product in a competitive market at a price of $30. Your firm's cost function is C = 20 + 3Q2. The profit-maximizing output for your firm is

5

An industry is comprised of 40 firms, each with an equal market share. What is the 4-firm concentration ratio of this industry?

?

For the cost function C(Q) = 50 + 3Q + 2Q2, the total variable cost of producing 2 units of output is:

?

You are the manager of a firm that sells its product in a competitive market at a price of $30. Your firm's cost function is C = 20 + 3Q2. Your firm's maximum profits are

?

Which of the following statements concerning monopoly is NOT true?

A monopoly is always undesirable

You are a manager in a perfectly competitive market. The price in your market is $14. Your total cost curve is C(Q) = 10 + 4Q + 0.5Q2. What price should you charge in the short run?

14

For a cost function C = 50 + 3Q + 2Q2, the average fixed cost of producing 10 units of output is:

5

You are the manager of a monopoly that faces a demand curve described by P = 230 − 20Q. Your costs are C = 5 + 30Q. The profit-maximizing output for your firm is

5

Suppose the production function is given by Q = 6K + 5L. What is the marginal product of capital when 10 units of capital and 10 units of labor are employed?

6

What is the average product of labor, given that the level of labor equals 20, total output equals 1200, and the marginal product of labor equals 200?

60

Costs that are forever lost after they have been paid are

Sunk costs

The production function for a competitive firm is Q = K.5L.5. The firm sells its output at a price of $10, and can hire labor at a wage of $5. Capital is fixed at one unit. The profit-maximizing quantity of labor is

1

If the production function is Q = K.5L.5 and capital is fixed at 1 unit, then the average product of labor when L = 16 is

1/4

When there are economies of scope between two products which are separately produced by two firms, merging into a single firm can:

Accomplish a reduction in costs

Which curve(s) does the marginal cost curve intersect at the (their) minimum point?

Average total cost curve and average variable cost curve

Economies of scale exist whenever

Average total costs decline as output increases

The production function Q = L.5K.5 is called:

Cobb-Douglas

In perfect competition, which is not true

Every firm has a small but perceivable market power

It is profitable to hire units of labor as long as the value of marginal product

Exceeds wage

Which of the following are measures of industry concentration?

Four-firm concentration ratio and HHI index

Which of the following features is common to both perfectly competitive markets and monopolistically competitive markets?

There is free entry and long-run profits are zero

Consider a monopoly where the inverse demand for its product is given by P = 200 − 10Q. Based on this information, the marginal revenue function is

MR(Q)=200-20Q

Firm managers should use inputs at levels where the:

Marginal benefit equals marginal cost and value marginal product of labor equals wage

Which of the following market structures would you expect to yield the greatest product variety?

Monopolistic competition

Which of the following is NOT a type of market structure?

Monopolistic oligopoly

A Herfindahl index (HHI) of 10,000 suggests

Monopoly

Which of the following is true under monopoly?

P > MC

In a competitive industry with identical firms, long-run equilibrium is characterized by

P=AC MR=MC P=MC

Costs that change as output changes are

Variable costs

The combinations of inputs that produce a given level of output are depicted by

isoquants

The absolute value of the slope of the isoquant is the

marginal rate of technical substitution

Changes in the price of labor cause:

slope changes in the isocost line

Suppose the production function is given by Q = max{K, L}. How much output is produced when 10 units of labor and 9 units of capital are employed?

10

One of the sources of monopoly power for a monopoly may be

Patents

If a monopolistically competitive firm's marginal cost increases, then in order to maximize profits, the firm will

Reduce output and increase price

Given the linear production function Q = 10K + 5L, if Q = 10,000 and K = 500, how much labor is utilized

1000

For the cost function C(Q) = 50 + 3Q + 2Q2, the marginal cost of producing 2 units of output is:

11

Suppose the production function is given by Q = 6K + 5L. What is the average product of capital when 10 units of capital and 10 units of labor are employed?

11

You are the manager of a monopoly that faces a demand curve described by P = 230 − 20Q. Your costs are C = 5 + 30Q. The profit-maximizing price is

130