Microeconomics Chapter 9,10,11,12,13,14, Exam Review
The long run equilibrium of a purely competitive industry ensures
Consumer and producer surplus is maximized
Implicit costs are:
"payments" for self-employed resources
If you know that when a firm produces 10 units of output, total costs are $1,030 and average fixed costs are $10, then total fixed costs are:
$100
Which value ( in percentage form) of the four-firm concentration ratio is most likely to indicate a monopolistically competitive market
30%
Productive efficiency refers to:
Cost minimization, where P = minimum ATC
Economies and diseconomies of scale explain
why the firm's long-run average total cost curve is U-shaped.
Resource costs increase in a purely competitive industry. This change will result in a
Decrease in the short-run supply curve for a firm in the industry
When a firm doubles its inputs and finds that its output has more than doubled, this is known as:
Economies of scale
The long run supply curve in a constant-cost industry would be:
Horizontal
If a purely competitive firm is producing at the MR = MC output level and earning an economic profit, then:
New firms will enter this market
Allocative inefficiency due to unregulated monopoly is characterized by the condition:
P>MC
An economy is producing at the least-cost rate of production when
Price and minimum average total cost are equal
Other things equal, a price discriminating monopolist will:
Produce a larger output than a non discriminating monopolist
Which of the following is most likely to be a fixed cost?
Property insurance premiums
creative destruction
Stimulates growth, Contributes to the production of new goods and forces firms to be innovative
In a monopolistically competitive market:
There is a relatively large number of sellers
Which of the following is not a barrier to entry?
X-inefficiency
In a typical graph for a purely competitive firm, the intersection of the total cost and total revenue curves would be
a break-even point
The term oligopoly indicates:
a few firms producing either a differentiated or a homogeneous product.
nonprice competition refers to:
advertising, product promotion, and changes in the real or perceived characteristics of a product.
For a purely competitive seller, price equals
all of these
In the short run, output
can vary as the result of using a fixed amount of plant and equipment more or less intensively
Cash expenditures a firm makes to pay for resources are called:
explicit costs
For a purely competitive firm, total revenue
has all of these characteristics
A constant-cost industry is one in which:
if 100 units can be produced for $100, then 150 can be produced for $150, 200 for $200, and so forth.
The main difference between the short run and the long run is that:
in the short run, one or more inputs is fix
Game theory:
is the analysis of how people (or firms) behave in strategic situations.
In the short run, the individual competitive firm's supply curve is that segment of the
marginal cost curve lying above the average variable cost curve
In the short run, purely competitive firms earn ________ in equillibrium while in the long run firms earn_______ in equillibrium, respectively
normal profits, economic profits
When a purely competitive industry is in long-run equilibrium:
price and average total cost are equal
When a purely competitive firm is in long-run equilibrium:
price equals marginal cost
When diseconomies of scale occur
the long-run average total cost curve rises.
price discrimination refers to:
the selling of a given product at different prices that do not reflect cost differences.
A firm reaches a break-even point (normal profit position) where
total revenue and total cost are equal
In the standard model of pure competition, a profit-maximizing entrepreneur will shut down in the short run if:
total revenue is less than total variable costs
A purely competitive firm's short-run supply is
upsloping and equal to the portion of the marginal cost curve that lies above the average variable cost curve
In the short run, a purely competitive firm that seeks to maximize profit will reduce
where total revenue exceeds total cost by the maximum amount
The wage rate increases in a purely competitive firm that seeks to maximize profit will produce
where total revenue exceeds total cost by the maximum amount
