Micro final

The following table shows a monopolist's demand curve and cost information for the production of its good. What price will it charge? Quantity Price per Unit Total Cost 25 $5 $110 30 $10 $125 35 $14 $130 40 $15 $140 Select one: a. $13 b. $15 c. $11 d. $12

b. $15

In the last video, what is the price the competitive firm receives for each bushel of apples it sells? Select one: a. $2 b. $3 c. $4 d. $5

b. $3

If a firm holds a pure monopoly in the market and is able to sell 5 units of output at $4.00 per unit and 6 units of output at $3,90 per unit, it will produce and sell the sixth unit if its marginal cost is Select one: a. $3.90 or less b. $3.40 or less c. $3.50 or less d. $4.00 or less

b. $3.40 or less

Given the data provided in the table below, what will the marginal cost equal for production at quantity (Q) level 4? Q P TC TR MR MC Profit 0 $5 $9 1 $5 $10 2 $5 $12 3 $5 $15 4 $5 $19 5 $5 $24 6 $5 $30 7 $5 $45 Select one: a. $5.00 b. $4.00 c. $1.00 d. $3.00

b. $4.00

Which of the following is most unlikely to present a barrier to entry into a market? Select one: a. market forces b. patent laws c. technological advantages d. deregulation

b. patent laws

A monopolist is able to maximize its profits by Select one: a. setting the price at the level that will maximize its per-unit profit. b. producing output where MR = MC and charging a price along the demand curve. c. setting output at MR = MC and setting price at the demand curve's highest point. d. producing maximum output where price is equal to its marginal cost.

b. producing output where MR = MC and charging a price along the demand curve.

33. Refer to the diagram above. In this instance, at the range of output represented at point c, Select one: a. the shutdown point has been reached. b. profits will be maximized. c. physical input levels have been reduced. d. capital input levels have been reduced.

b. profits will be maximized.

If a firm holds a pure monopoly in the market and is able to sell 4 units of output at $2.00 per unit and 5 units of output at $1.75 per unit, it will produce and sell the fifth unit if its marginal cost is Select one: a. $1.75 or less b. $2.00 or less c. $0.75 or less d. $1.00 or less

c. $0.75 or less

Given the data provided in the table below, what will the marginal revenue equal for production at quantity (Q) level 4? Q P TC TR MR MC Profit 0 $5 $9 1 $5 $10 2 $5 $12 3 $5 $15 4 $5 $19 5 $5 $24 6 $5 $30 7 $5 $45 Select one: a. $20.00 b. $15.00 c. $5.00 d. $1.00

c. $5.00

Refer to the table below. If the firm produces 5 units that it sells at a price of $30.00 each, what will its profits or losses equal? Quantity Cost (in dollars) Fixed Costs (in dollars) Total Costs (in dollars) Average Total Costs (in dollars per unit) Average Variable Costs (in dollars per unit) Marginal Costs(in dollars per unit) 0 0 40 40 - - - - - - 1 1 40 55 15 55 15 2 35 40 75 17.5 37.5 20 3 60 40 100 20 33.3 25 4 90 40 130 22.5 32.5 30 5 125 40 155 25 31 35 6 160 40 200 26.6 33.3 40 Select one: a. losses equal $5 b. profits equal $5 c. profits equal $25 d. losses equal $25

losses equal $5

I'MABigCorp. produces and sells kitchen wares. Last year, it produced 7,000 can openers and sold each one for $6. To produce the 7,000 can openers, the company incurred variable costs of $28,000 and a total cost of $45,000. I'MABIGCorp.'s average fixed cost to produce the 7,000 can openers was Select one: a. $1.50 b. $1.23 c. $2.25 d. $2.43

$2.43

Given the data provided in the table below, the total revenue (TR) for production at quantity(Q) level 4 equals Q P TC TR MR MC Profit 0 $5 $9 1 $5 $10 2 $5 $12 3 $5 $15 4 $5 $19 5 $5 $24 6 $5 $30 7 $5 $45 Select one: a. zero b. $1.00 c. $15.00 d. $20.00

. $20.00

Approximately what percentage of the US labor force is employed by firms that have fewer than 100 employees? Select one: a. 63% b. 50% c. 45% d. 35%

35%

Returns to scale refer to the relationship between a firm's inputs and outputs. Economics of Scale refer to plant size and cost of production. Select one: True False

True

________________________ arises where many firms are competing in a market to sell similar but differentiated products. Select one: a. Oligopolistic competition b. Perfect competition c. Monopolistic competition d. Monogopolised competition

Monopolistic competition

What is the level of output where the firm will shutdown? Select one: a. Q=80 b. Q=40 c. Q=60 d. Q=72

Q=60

The economies-of-scale curve is a long-run average cost curve, because Select one: a. it allows all factors of production to change. b. fixed costs cannot be changed. c. only variable costs are allowed to change. d. only marginal costs are allowed to change

a it allows all factors of production to change.

In the United States, a pharmaceutical company's exclusive patent rights last for Select one: a. 20 years. b. 25 years. c. 10 years. d. 70 years.

a. 20 years.

Given the data provided in the table below, what will the fixed costs equal for production at quantity (Q) level 4? Select one: a. $35.00 b. $4.00 c. $36.00 d. $9.00

d. $9.00

. If a monopolist increases quantity by one unit, but sells the increased output at a slightly lower price, Select one: a. marginal revenue is affected by adding one additional unit sold at the new price. b. all the previous units, which used to sell at a higher price, now sell for more. c. the marginal revenue of selling a unit is more than the price of the unit. d. because of higher output the marginal revenue curve is above the demand curve.

a. marginal revenue is affected by adding one additional unit sold at the new price.

I'maGoldMiner has benefited from a record rise in gold prices in the global commodities market. While the price of its output is highly influenced by market speculation, if it wants to increase production to take advantage of the current profit-maximizing opportunity, the company Select one: a. must accept market price for its physical capital inputs. b. must reduce what it pays for inputs that make up its costs of production. c. must reduce production to encourage speculators to drive gold prices higher. d. must alter the price of its labor inputs to maximize profits .

a. must accept market price for its physical capital inputs.

A_______exists when the quantity demanded in the market is less than the quantity at the bottom of the long-run average cost curve. Select one: a. natural monopoly b. monopoly c. oligopoly d. monopolistic competition

a. natural monopoly

Refer to the table below. If the firm sells 5 units at a price of $30 each, then the marginal unit produced Quantity Cost (in dollars) Fixed Costs (in dollars) Total Costs (in dollars) Average Total Costs (in dollars per unit) Average Variable Costs (in dollars per unit) Marginal Costs(in dollars per unit) 0 0 40 40 - - - - - - 1 1 40 55 15 55 15 2 35 40 75 17.5 37.5 20 3 60 40 100 20 33.3 25 4 90 40 130 22.5 32.5 30 5 125 40 155 25 31 35 6 160 40 200 26.6 33.3 40 Select one: a. costs more than the average cost. b. is subtracting from profits. c. costs the same as the average cost. d. is adding to profits.

is subtracting from profits

In the video, which LRATC represented a larger scale of plant? Select one: a. LRTC 5 b. LRTC 1

b. LRTC 1

14. If a perfectly competitive firm is a price taker, then Select one: a. pressure from competing firms will force acceptance of the prevailing market price. b. it must be a relatively small player compared to its competitors in the overall market. c. it can increase or decrease its output without affecting overall quantity supplied in the market. d. quality differences will be very perceptible and will play a major role in purchasers' decisions .

a pressure from competing firms will force acceptance of the prevailing market price.

The following table shows a monopolist's demand curve and cost information for the production of its good. What price will it charge? Quantity Price per Unit Total Cost 1 40 $20 2 30 $25 3 25 $28 4 20 $34 Select one: a. $25 b. $30 c. $20 d. $40

a. $25

Given the data provided in the table below, what will the amount of profit be for production at quantity (Q) level 7? Q P TC TR MR MC Profit 0 $5 $9 1 $5 $10 2 $5 $12 3 $5 $15 4 $5 $19 5 $5 $24 6 $5 $30 7 $5 $45 Select one: a. -$10.00 b. zero c. -$5.00 d. $1.00

a. -$10.00

_______law implies ownership over an idea or concept or image Select one: a. Intellectual property b. Copyright c. Patent d. Trademark

a. Intellectual property

. _______ refers to the additional revenue gained from selling one more unit. Select one: a. Marginal revenue b. Total revenue c. Economic profit d. Accounting profit

a. Marginal revenue

_______ refers to the additional revenue gained from selling one more unit. Select one: a. Marginal revenue b. Total revenue c. Economic profit d. Accounting profit

a. Marginal revenue

A firm that holds a monopoly position in the market place is Select one: a. a price maker b. a price taker c. monopolistically competitive d. subject to infinite market forces

a. a price maker

An _______ is calculated by subtracting the firm's costs from its total revenues, _______ . Select one: a. accounting profit; excluding opportunity cost b. accounting profit; including opportunity cost c. economic profit; excluding opportunity cost d. opportunity cost; including economic profit

a. accounting profit; excluding opportunity cost

If a firm is experiencing _____________________, then as the quantity of output rises, the average cost of production rises. Select one: a. decreasing returns to scale b. consent returns to scale c. economies of scale d. increasing returns to scale

a. decreasing returns to scale

In the video, the graph indicates that firm's average revenue curve is the market______? Select one: a. demand curve b. supply curve c. equilibrium

a. demand curve

The term "constant returns to scale" describes a situation where Select one: a. expanding all inputs does not change the average cost of production. b. a larger-scale firm can produce at a lower cost than a smaller-scale firm. c. expanding all inputs changes the average cost of production. d. the quantity of output rises and the average cost of production falls.

a. expanding all inputs does not change the average cost of production.

The above figure shows the average cost curve, demand curve, and marginal revenue curve for a monopolist. After maximizing profits, what do the firm's costs equal? Select one: a. the area of rectangle ABGH b. the area of rectangle BDEG c. the area of rectangle ACFH d. the area of rectangle ADEH

a. the area of rectangle ABGH

In a free market economy, firms operating in a perfectly competitive industry are said to have only one major choice to make. Which of the following correctly sets out that choice? Select one: a. what quantity to produce b. what price to charge c. what quantity of labor is needed d. what quality to produce

a. what quantity to produce

In the US economy, nearly half of all the workers employed by private firms work at Select one: a. 18,000 firms with fewer than 100 employees. b. 18,000 large firms that employ more than 500 workers. c. 26,000 firms with fewer than 100 employees. d. 26,000 large firms that employ more than 300 workers.

b. 18,000 large firms that employ more than 500 workers.

In the video, when MC > MR, what action should the firm take to Maximize Profit. Select one: a. Increase Price b. Decrease Quantity c. Decrease Price d. Increase Quantity

b. Decrease Quantity

In the video, to Determine the level of Q* you must multiple q* by ____. Select one: a. Price of product b. Number of Firms in Market c. Marginal Revenue d. Not Possible

b. Number of Firms in Marke

The marginal revenue curve for a monopolist_______the market demand curve. Select one: a. always rises above b. always lies beneath c. always runs parallel d. always is the same

b. always lies beneath

Under perfect competition, any profit-maximizing producer faces a market price equal to its Select one: a. average costs b. marginal costs c. total costs d. variable costs

b. marginal costs

Idaho farmers can sell as large a quantity of their potato crop as they wish, Select one: a. if they set their own price in the short run, but in the long run, the market sets the price. b. provided each is willing to accept the prevailing market price. c. if they set their own price in the long run, but in the short run, the market sets the price. d. provided quality is perceptible and determines the market price .

b. provided each is willing to accept the prevailing market price.

In the video, the misallocation of society's resources is due to the monopoly behavior of ______. Select one: a. charging monopoly price for its product b. restricting the level of production c. setting product price equal to MC d. eliminating competition

b. restricting the level of production

Fixed costs are important because, at least in the ___________, the firm _______________. Select one: a. long run; cannot alter them b. short run; cannot alter them c. long run; can alter them d. short run; can alter them

b. short run; cannot alter them

If a firm's revenues do not cover its average variable costs, then that firm has reached its _______ . Select one: a. price taking point b. shutdown point c. marginal point d. opportunity margin

b. shutdown point

What qualities would ideally suit a monopolistic firm with regard to barriers to entry? Select one: a. a few impediments to limit new firms from operating and expanding within the market b. sufficient strength to prevent or discourage potential competitors from entering the market c. government rules on prices, quantities, or conditions of entry in an industry d. government regulations that provide no barriers to entry, exit, or competition

b. sufficient strength to prevent or discourage potential competitors from entering the market

For a perfectly competitive firm, the marginal cost curve is identical to the firm's _______ . Select one: a. demand curve b. supply curve c. average total cost curve d. average variable cost curve

b. supply curve

The above figure shows the average cost curve, demand curve, and marginal revenue curve for a monopolist. After maximizing profits, what do the firm's profit's equal? Select one: a. the area of rectangle ABGH b. the area of rectangle BDEG c. the area of rectangle BCFG d. the area of rectangle ADEH

b. the area of rectangle BDEG

31.Refer to the diagram above. Which of the following explains the slope of the total revenue curve illustrated in this graph? Select one: a. total revenue shown as a straight line sloping up indicates a perfectly competitive firm b. the slope of the total revenue curve is determined by the price of the goods produced c. at higher levels of output, diminishing returns will cause total cost to slope downward steeply d. the slope of the total revenue curve is explained by both a and b above.

b. the slope of the total revenue curve is explained by both a and b above.

. Which of the following denotes the typical shape of the monopolist's total cost curve? Select one: a. total costs decrease and become flatter as output rises b. total costs rise and grow steeper as output rises c. higher output levels create the typical downward sloping cost curve d. total costs are typically constant and are shown by a straight horizontal line

b. total costs rise and grow steeper as output rises

____________________________ occur when the marginal gain in output diminishes as each additional unit of input is added. Select one: a. Diminishing variable returns b. Diminishing average returns c. Diminishing marginal returns d. Diminishing marginal costs

c. Diminishing marginal returns

In the video, when we assume constant returns to scale, the result is? Select one: a. MC>AC b. MC<AC c. MC=AC

c. MC=AC

________________________ arises where many firms are competing in a market to sell similar but differentiated products. Select one: a. Oligopolistic competition b. Perfect competition c. Monopolistic competition d. Monogopolised competition

c. Monopolistic competition

In the video, what is the level of output that will maximize the firm's profit? Select one: a. Q=23 b. Q=26 c. Q=29 d. Q=30

c. Q=29

27. The graph above illustrates the total cost function for GoodieCookie Co. How are the company's fixed costs represented in this graph? Select one: a. by adding up the fixed costs b. at any vertical axis point where the total cost curve never equals zero c. as the point where the total cost curve touches the vertical axis d. by adding up the variable cost

c. as the point where the total cost curve touches the vertical axis

For a monopolistic firm, the demand for its product is Select one: a. unitary elastic b. completely elastic c. completely inelastic d. neither b or c

c. completely inelastic

The form of legal protection intended to prevent reproduction of original works is referred to as _______law. Select one: a. patent b. trademark c. copyright d. trade secret

c. copyright

Which of the following falls outside of the classification of business expenses that fall into the category of fixed costs? Select one: a. costs that must be made before production starts b. costs that vary according to specific line of business c. costs incurred in the act of producing d. costs incurred as advertising expenses

c. costs incurred in the act of producing

It is said that in a perfectly competitive market, raising the price of a firm's product from the prevailing market price of $179.00 to $199.00, _______ . Select one: a. will likely cause the firm to reach its shutdown point immediately b. will cause the firm to recover some of its opportunity costs c. could likely result in a notable loss of sales to competitors d. is a sure sign the firm is raising the given price in the market

c. could likely result in a notable loss of sales to competitors

In the video, according to Adam Smith, monopoly market power will result in ____. Select one: a. an efficient allocation of society's scarce resources. b. increased competition on the supply side of the market the monopolist sells in. c. elimination of the invisible hand of competition. d. all of the above.

c. elimination of the invisible hand of competition.

55. The graph above illustrates the electricity market. Consider market competition between firms where price is based on AR and select the most appropriate answer. Select one: a. in the short-run, the demand curve and average revenue shift as other firms enter the market and increase competition b. in the short-run, the demand curve and average revenue shift as other firms leave the market and decrease competition c. in the long-run, the demand curve and average revenue shift as other firms enter the market and increase competition d. in the long-run, the demand curve and average revenue shift as other firms leave the market and decrease competition

c. in the long-run, the demand curve and average revenue shift as other firms enter the market and increase competition

34.Refer to the diagram above. In this instance, the range of production possibilities at point d, Select one: a. is a steeper slope reflecting increasing profits due to diminishing costs. b. is a steeper slope reflecting a lower price. c. is a steeper slope reflecting a return to losses due to diminishing returns. d. is a steeper slope reflecting higher total revenue .

c. is a steeper slope reflecting a return to losses due to diminishing returns.

The demand curve perceived by a perfectly competitive firm Select one: a. shows that such a firm is a price-maker b. shows economies of scale over a large range of output c. is horizontal d. all of the above

c. is horizontal

If marginal cost is rising in a competitive firm's short-run production process and its average variable cost is falling as output is increased, then Select one: a. marginal cost is above average variable cost. b. marginal cost is below average fixed cost. c. marginal cost is below average variable cost. d. average fixed cost is constant .

c. marginal cost is below average variable cost

If marginal cost is rising in a competitive firm's short-run production process and its average variable cost is falling as output is increased, then Select one: a. marginal cost is above average variable cost. b. marginal cost is below average fixed cost. c. marginal cost is below average variable cost. d. average fixed cost is constant .

c. marginal cost is below average variable cost.

The largest cattle rancher in a given region will be unable to have a _______ when sufficient numbers of smaller cattle ranchers provide sources of competition. Select one: a. oligopoly b. patent c. monopoly d. monopolistic competition

c. monopoly

The term _______ refers to a firm operating in a perfectly competitive market that must take the prevailing market price for its product. Select one: a. price setter b. business entity c. price taker d. trend setter

c. price taker

When a firm pursues a predatory pricing strategy, it does so Select one: a. to hire more staff to lower unemployment. b. to increase supply to benefit consumers. c. to maximize profits in the long run. d. to discourage short run competition.

c. to maximize profits in the long run.

In the _______ , if profits are not possible, the perfectly competitive firm will seek out the quantity of output where _______ . Select one: a. long run; increasing production b. short run; fixed costs can be reduced c. short run; losses are smallest d. long run; fixed costs can be eliminated

c. short run; losses are smallest

In the _______ , the perfectly competitive firm will seek out _______ . Select one: a. long run; the quantity of output where profits are highest b. short run; profits by ignoring the concept of total cost analysis c. short run; the quantity of output where profits are highest d. long run; methods to reduce production and shut down

c. short run; the quantity of output where profits are highest

Which of the following falls outside of the classification of business expenses that fall into the category of fixed costs? Select one: a. costs that must be made before production starts b. costs that vary according to specific line of business c. costs incurred in the act of producing d. costs incurred as advertising expenses

costs incurred in the act of producing

In the video, the acceleration of Total Cost beyond output Q1 is the result of ___? Select one: a. Labor Specialization, b. Profit Maximization c. Fixed Cost d. Diminishing Returns

d. Diminishing Returns

In order to determine ____________, the firm's total costs must be divided by the quantity of its output. Select one: a. diminishing marginal returns b. fixed costs c. variable cost d. average cost

d. average cost

The slope of the demand curve for a monopoly firm is Select one: a. horizontal, parallel to the x-axis b. vertical, parallel to the y-axis c. upward sloping d. downward sloping

d. downward sloping

Economies of scale may arise from all but one of the following. Which one is it? Select one: a. doubling promotional expenses to expand sale more than proportionately b. having a larger retail space can expand sales more than proportionately c. spreading the fixed-costs of administration over more customers holds average costs down d. government economic subsidies protect firms from competition to avoid losses.

d. government economic subsidies protect firms from competition to avoid losses.

Markets that are best served by a natural monopoly are markets were the cost structure of production is dominated by _____. Select one: a. low variable cost b. high average variable cost c. low fixed cost d. high fixed cost

d. high fixed cost

In the _______ , the perfectly competitive firm will react to profits by _______ . Select one: a. short run; increasing quality of products b. long run; tailoring their quality controls c. short run; reducing its labor inputs d. long run; increasing its production

d. long run; increasing its production

When a natural monopoly exists in a given industry, the per-unit costs of production will be Select one: a. lowest when there are a large number of producers in the industry. b. lower for the smaller firms than for larger firms. c. minimized at the output that maximizes the industry's profitability. d. lowest when a single firm generates the entire output of the industry.

d. lowest when a single firm generates the entire output of the industry.

The term _____________ is used to describe the additional cost of producing one more unit. Select one: a. average cost b. fixed cost c. variable cost d. marginal cost

d. marginal cost

The total revenue curve for a monopolist will Select one: a. start high, rise, and then decline. b. start low, decline, and then rise. c. start high, decline, and then rise. d. start low, rise, and then decline.

d. start low, rise, and then decline.

If I'maJuiceCo. establishes a bottling plant in Delaware, it will most likely Select one: a. use production technologies that require more workers. b. strive for economies of scale where quantity of output falls as the cost of production falls. c. strive to reach economies of scale that will result in producing at a higher average cost. d. use production technologies that conserve on the number of workers.

d. use production technologies that conserve on the number of workers.

n the video, which point would on the two graphs would the monopolist select that would determine the level of output that would maximize profit? Select one: a. Y b. y c. R d. X e. Z

e. Z