ECN Ch. 8

Smoking illegal public building, market failure

Externalities

In the long run there are no __ costs

Fixed

Payments to individuals for which no current goods or services are exchanged are known as

Income transfer

Assume a toy company hires an additional worker to assemble toys, and the size of the factory and amount of equipment remain constant. As a result, the level of output increases but by a smaller amount than when the previous additional worker was hired. This is an example of:

Law of diminishing returns

A firm should continue to hire additional workers as long as the

MPP is equal to the market wage rate

The change in total output that results from one additional unit of input is the

Marginal physical product

In a perfectly competmarket

No buyer or seller has market power

A monopolist maximizes profit

None of the above

I'm figure 6.1 the market demand D2 and supply curve S the market price will be

P2

If marginal cost equals price, the _ is at a maximum

Profit

Total revenue minus total cost equals

Profit

The production decision is the

Selection of short run rate of output

Which of the following is true about the short run?

Some inputs (costs) are fixed

Min wage $20 results

Surplus 56 workers

The price of a good multiplied by the quantity sold equals

Total revenue

Fig 7.1 profit max level output monopolist

3

Figure 6.3 for a perfectly competitive firm. If price is $4 the profit maximizing rate of output is

32

What is the marginal physical product of the fourth unit of labor in Table 5.1

42

A minimum wage impacts the labor market by causing

An increase in the quantity of labor supplied and a decrease in the quantity of labor demanded

Which of the following is U shaped

Average total cost curve

Market power form market failure

Competition restricted output reduced and higher price

In figure 7.1 the price charged by a profit maximizing monopolist

$7

Fig 7.2 Ind comp the profit max level output

Between 3 & 4

Which of the following is not characteristic of a perfectly competitive market

Brand Loyalty

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