Micro Final
what is another way of saying "marginal cost"
additional cost
when the total product curve is falling the
marginal product of labor is negative
the range of diminishing marginal productivity begins when
marginal product reaches its maximum
which pair of variables might be positively or negatively related dependig on the characteristic of the product
the income of consumers and the demand for a product
a firm has fixed cost of 5000 its average variable cost is $2.00. at an output of 5000 units its average total cost is
$3.00
lock's sells 500 bottle of perfume a month when the price is $7. A huge increases in resource cost cayse the price to rise to $9 and block only manges to sell 460 bottles of perfume the price of elasticity of demand is
.33 inelastic
when the price of candy bars increased from $.45 to $.55 the quantity demanded changed from 21000 per day to 19000 per day in this range the price elasticity of demand for candy bars is
.5
which will not cause the supply curve to shift
A change in the price of the good
A and B are subtitute goods, but A and C and complentary good. if the cost of production of A decreases, then the demand for
B will decrease and demand for C will increase
A firm produces and sells two goods A and B. Good A is known to have many close substitutes; good B makes up a significant portion of most families budgets. A orice increase for each good woul most likely cause total revenues from good A to
Decrease and total revenues from good B to Decrease
when the price of a product increases by 10 percent the quantity demand decreases 15 percent in this range of prices demand for this product is
Elastic
which will not ceteris paribus cause the demand curve for good A to shift
a change in price of A
which would cause and increase in the demand for product A
a decrease in the price of a complementary product b
which cannot be a characteristic of an oligopolistic industry
a perfectly elastic firm demand curve
the "invisible hand" concept used to describe the guiding function of prices was developed by
adam smith
if marginal cost exceeds average total cost in the short run then which is likely to be true
average total cost is increasing
if you know that total fixed cost is 200 and total variable cost is 600 and total products is 4 units then
average variable cost is 150
which is the correct match of and economic resource and payment of resource
capital and interest income
if a 10 percent increase in the price of one good results in a decrease of 5 percent in the quantity demanded of another good then it can be concluded that the two goods are
complements
assume the market for ball bearing is purely competitive. currently each of the firms in this market is makeing a positive level of economic profits in the long run we can except the market
demand curve to increase
if 100 units of product K are sold at unit price of $10 and 75 units of product K are sold at a price $15 one can conclude that
demand for product K is inelastic
in the long run a representative firm in a monopolistically competitive industry will typically
earn a normal profit but not an economic profit
A 4 percent reduction in the price of a product causes consumer expenditure to remain unaffected. the price of elasticity of demand is
equal to 1
which is a reason why there is no advertising by individual firms under pure competition
firms produce a homogeneous produc
the major difficulty in asking people to pay voluntarily for what a government program is worth to them is
free rider problem
the principle underlying the kinked demand curve model of oligopoly is that the demand curve facing one firm is more elastic when other firm in the industry
hold price constant when firms changes it prices
Which statement is not correct and supply price and quantity
if demand decreases and supply increases price will fall and quantity exchange will fall
under pure monopoly a profit maximizing firm will produce
in the elastic range of the demand curve
an increase in demand for a good may be caused by
increase in the price of a substitute good
if a product has a short run elasticity of supply equal to zero then an increase in the demand for the product will
increase price and leave the quantity sold unchanged
A fall in the price of milk used in the production of ice cream will
increase supply of ice cream causing the supply curve of ice cream to shift to the right
For some products, purchases ten to decrease as the buyers income increases such products are known as
inferior goods
chuck grim had a price elasticity of demand for beer of 1. suppose the price of each bee is increased by 10 percent. what will happen to the toatal amount chuck spends on beer
it will not change
a reduction in level of unemployment would have which effect with respect to nations production possiblilities curve
it would not shift the curve it would be represented by moving from a point inside the curve towards the curve
when a firm is experiencing diseconomics of scale
its average total cost will decline if it reduces its scale of operations
if the demand curve facing a firm is perfectly elastic then
its marginal revenue will equal price
pure competition produces a socially optimal allocation of resources in the long run because
marginal cost equal price
which is true with respect to the demand data confronting a monopolist
marginal revenue is less than price
which is true under the conditions of pure competition
no single firm can influence the market price by changing its output
if and oligopolist's demand curve has a 'Kink" in it then
over some interval a change in the oligopolists marginal cost will not cause a change in the oligopololists profit maximizing profit
all of the fallowing would effect the postition of the supply curve for cranberries except
popularity of cranberry drinks
in monopolictic competition thers is an underallocation of resources at the profit maximizing level of output which means that
price is greater than MC
a monopolist will definitely discontinue production in the short run if
price is less than average fixed cost
Product %change income % change in quantity d w -1 -1 x +6 +3 y -1 +1 z +4 +8 refer to the above table which product is a normal good but least resposive to change in income
product X
which idea is inconsistent with pure competition
product differentiation
FArner jones is producing wheat, and must accept the price of $6.00 per bushel. at this time her total average cost and her marginal cost both equal $8.00 per bushel. her average variable costs are $5 per Bushel. in choosing he optimal output Farmer Jones Should
reduce output and continue production
the simple circular flow model shows that workers entrepreneurs and the owners of land and capital off service through
resources markets
a firm sell a product in a pureley competitive market. the marginal cost of the product at the current output is $5.00 and the market price $5.00 what should the firm due
shut down if the minimum possible average variable cost is $5.25
the ceteris paribus assumption is employed in economic analysis to
simply the complex world
if government intervenes when negative externalities exsist in an industry it should attempt to shift the industry
supply curve to the left
the main reason for the high price of antiques is that
supply is relatively inelastic and demand increases over time
tickets to a university football game always sell out in this case the
supply of tickets is highly inelastic
which is one of the four simplifying assumptions made in the chapter about the construction of the production possibilities model
the economy is fully employed and is using the least cost methods of production
the idea that the desires of resources suppliers and producers to further their own self interest will automatically furthe the public intrest is known as
the invisible hand
A paper plant creates chemical waste which dumps it into a nearby river. if this situation applied to most paper plants in the nation, then you can conclude
the market price of paper is too low because the supply of paper fails to incorporate all the cost of production
which is one of the conditions that must be realized before a seller finds that price discrimination is workable
the seller must be able to segregate buyers based of willingness to pay
which is not a characteristic of a product with relatively inelastic demand
there are a large number of good substitutes
the law of increasing opportunity cost indicates that
to produce more of one good society must sacrafice larger and larger amounts of alternative goods
when marginal cost ins increasing
total cost must be increasing
consumer sovereignty and "dollar votes" are most related to which fundamental question about a competitive market
what will be produced
all economic systems must answer certain fundamental economic questions. except for
which actions should government take to reduce inflation