eco

Ryan quit a job with a daily salary and opened a business. On a daily basis, the total revenue of the business is $200, and the explicit costs of the business are $120. If Ryan has zero economic profits, what must be the value of Ryan's implicit costs?

$80

Which of the following is true for a firm in long-run equilibrium in monopolistic competition?

There is neither allocative nor productive efficiency

If Zeta, a single producer, had exclusive control of a key resource needed to produce good Z, a likely result would be which of the following?

There would be a barrier to entry, and Zeta would have a monopoly on good Z

Based on the short-run production function graph above showing the relationship between the quantity of labor and total product, which of the following statements is true?

Total product is maximized when marginal product is zero.

Which of the following statements regarding accounting profits, opportunity costs, and economic profits is true?

If accounting profits are less than opportunity costs, there will be economic losses.

Which of the following statements concerning a natural monopoly is true?

If the monopolist chooses to produce the quantity at which price is equal to average cost, it would earn a normal profit.

Assume that the market is a profit-maximizing monopoly. Which of the following areas shows the consumer surplus?

AP0E

Which of the following explains the difference between short-run and long-run costs?

All costs are variable in the long run but not in the short run.

Which of the following statements relating to a firm in an imperfectly competitive market and a firm in a perfectly competitive market is true?

An imperfectly competitive firm must lower its price to increase sales, while a perfectly competitive firm can increase sales by increasing output at the current price

Assume a decreasing-cost perfectly competitive industry. Which of the following statements is true?

As industry output contracts, each firm's long-run average total cost curve shifts upward.

Which of the following provides an example of the law of diminishing returns?

As more of a variable input—for example, labor is used with a fixed number of machines— output increases but at a diminishing rate.

Based on the information in the graph above, what are the profit-maximizing output quantities for a single-price monopolist and for a monopolist that engages in perfect price discrimination?

For a single-price monopolist, Qo- With perfect price discrimination, Q3-

The graph above shows a firm's long-run average total cost curve (LRATC). Which of the following statements is true as the firm increases its scale of production? (looks like smiley face)

For output levels above Q1, the firm experiences diseconomies of scale.

Assume Nadia voluntarily leaves a job with a salary of $100 per day to open and run a restaurant instead. After deducting all explicit costs from the restaurant revenues, Nadia has a gain of $120. Assuming there are no additional implicit costs, which of the following statements is true?

Nadia has an economic profit of $20

In the short run, which of the following must be true for a perfectly competitive firm that is maximizing profits?

The firm will produce where MR=MC as long as P is greater than average variable cost

Which of the following statements relating to a profit-maximizing perfectly competitive firm is true?

The firm's price is given by the market and is equal to marginal revenue.

Assume a profit-maximizing monopolist is able to price discriminate, dividing its consumers into two distinct groups charging each a different price. Based on this information, which of the following is true?

The group with the more elastic demand will pay the lower price.

Assume the marginal product of labor first rises, reaches a maximum, and then falls. If the average product of labor is falling, which of the following is true?

The marginal product of labor must be falling.

Which of the following is true for a monopolist that engages in perfect price discrimination?

The monopolist sells the allocatively efficient quantity of output.

Assume that the market is a profit-maximizing monopoly. Which of the following areas shows the producer surplus and the deadweight loss?

The producer surplus is area P1BJF, and the deadweight loss is area BJE.

Which of the following statements relating to a firm in an imperfectly competitive market and a firm in a perfectly competitive market is true?

When an imperfectly competitive firm raises the price, it will likely continue to sell some units of output, but when a perfectly competitive firm raises the price, it will sell no output.

Based on the information in the above graph describing a monopolistically competitive firm, which of the following is true?

With the firm making economic profits, it can be expected that new firms will enter this market.

Assume a firm doubles its usage of each input, resulting in a doubling of the firm's output. Which of the following describes this result?

constant returns to scale

When a competitive firm maximizes short-run economic profits, it produces at the output level where

marginal revenue equals marginal cost (MR=MC)

Which of the following is true of monopolistically competitive firms in long-run equilibrium?

marginal revenue equals marginal cost and price equals average total cost.

Which of the following correctly describes the dominant strategy of each firm?

mine's dominant strategy is to not cheat; mine's dominant strategy is to cheat.

In the absence of barriers to entry, a typical firm is currently in long-run equilibrium. Assume there is an increase in the market demand for the good that the firm is producing. Which of the following will happen in the long run?

new firms will enter the market

which of the following market structures is firm interdependence and strategic behavior most commonly observed?

oligopoly

Game theory is used to explain

strategic behavior of firms in oligopoly

In the short run, assume diminishing marginal product of labor sets in with the hiring of the second worker. Which of the following will remain constant as a firm produces more output?

total fixed cost