Econ 102 Exam 3

What is the four-firm concentration ratio if the four largest firms in an industry account for 5 percent, 6 percent, 7 percent, and 8 percent of total revenue?

26 percent

a perfectly competitive firm is producing 50 units of output and selling at the market price of $23. the firms average total cost is $20. what is the firms economic profit?

$150

in the long run, firms in monopolistic competition make zero economic profit because

firms are free to enter and exit

if the market price is $50 per unit for a good produced in a perfectly competitive market and the firm's average total cost is $52 then the firm

incurs an economic loss of $2 per unit

if a perfectly competitive firm finds that price is less than its ATC then the firm

is incurring an economic loss

a industry with a large number of firms, differentiated products and free entry and exit is called

monopolistic competition

If a business owner decided to expand her business but rather than borrowing money from a bank used her own funds, then

she would forego the opportunity to earn interest on the money

John fishes for a living. Last year, he sold $100,000 of fish. Bait, nets and other fishing supplies cost John $10,000 and he paid $40,000 in salaries to his helpers. Depreciation on his boat and other equipment, as calculated using IRS rules, was $15,000. What was John's profit as would be calculated by an accountant?

$35,000

a single price monopoly can sell 2 units for $8.50 per unit. in order to sell 3 units, the price must $8.00 per unit. the marginal revenue from selling the third unit is

$7.00

if 6 workers can wash 42 cars a day and 7 workers can wash 50 cars a day, then the marginal product of the 7th worker equals

8 cars a day

To eliminate losses in a perfectly competitive market, firms exit the industry. This exit results in

a decrease in market supply

a cost incurred in the production of a good or service and for which the firm does not need to make a direct monetary payment, is referred to as ___________ cost

a implicit

a major characteristic of monopoly is

a single seller of a product

In the long run, the firm ________ change the number of workers it employs and ________ change the size of its plant.

can; can

if a producer wants a monopoly with a legal barrier to entry how can this be done i. im not ii. writing all iii. of these

i, ii, iii

which of the following statements is correct

in order to price discriminate, a firm must sell a good or service that cannot be resold.

if a perfectly competitive seller is maximizing profit and is making zero economic profit, which of the following will this seller do?

increase production in order to make an economic profit

If firms in a perfectly competitive industry are earning an economic profit then in the ________, firms will _________ the industry

long run; enter

as a firm, apple's goal is to

maximize profit

in which market structure do firms exist in very large numbers, each firm produces an identical product, and there is freedom of entry and exit?

only perfect competition

a natural barrier to entry is defined as a barrier that arises because of

technology that allows one firm to meet the entire market demand at lower average total cost than could two or more firms

the marginal product of labor is the change in

total output from employing one more worker

average product is equal to

total product ÷ quantity of labor

Chuck owns a factory that produces leather footballs. His total fixed cost equaled $86,000 last year. His total cost equaled $286,000 last year. Hence Chuck's

total variable cost equaled $200,000

the relationship between marginal revenue and elasticity is

when demand is elastic, marginal revenue is positive and when demand is inelastic, marginal revenue is negative