econ 202- Nwoha exam 3
if the monopoly firm is currently producing Q4 units of output, then a decrease in output will necessarily cause profit to
increase if the output is between Q3 and Q4
robin owns a horse stable and riding academy and gives riding lessons for children at pony camp. 20 children, 4000 total revenue. marginal cost of pony camp is 250 per child. in order to maximize profits, Robin should
give riding lessons to fewer then 20 children per month
which graphs illustrate the demand curve most likely faced by a firm in a monopolistically competitive market
graph B (downward slope)
an oligopolists will increase production if the output effect is
greater than the price effect
refer to figure 15-4. what area measures the monopolists profit
(k-b)*w
monopolistically competitive market figure: how much consumer surplus will be derived from the purchase of this product at the monopolistically competitive price
100 to 80 (where price meets demand curve); high x width / 2; Ans: 200
if the market price is $10, what is he firms short-run economic profit
15
which of the curves most likely represent average fixed cost
A???
adibock knows that it produces and sells-high quality athletic shoes. wurkout knows that it produces and sells low quality athletic shoes.
Adibock has an incentive to spend a large amount pf money on advertising for its shoes
the efficient scale of production occurs at which quantity
C
a profit-maximizing monopoly total revenue is equal to
P5*Q3
profit can always be increased by increasing the level of output by one unit if the monopolist is currently operating at
Q1 and Q2 only
a profit-maximizing monopoly will produce an output level of
Q3
for an individual firm operating in a competitive market, marginal revenue equals
average revenue and the price for all levels of output
If a firm in a monopolistically competitive market successfully uses advertising to decrease elasticity of demand for its product, the firm will
be able to increase the markup over marginal costs
the firm should shut down if the market price is
below 6
a change in the supply of one factor of production
can alter the earnings of all other factors
price discrimination
can maximize profits if the seller can prevent the resale of goods between customers
which of the following examples illustrate an oligopoly market
city with two firms who are licensed to sell school uniforms
construction work is much riskier than working as a server as a restaurant. as a result, we'd expect a difference in wages between the two jobs. the difference is known as
compensating differential
in the prisoners' dilemma game, self-interests leads to
each prisoner to confess
in the long-run average total cost decreases as the quantity of output increases, the firm is experiencing
economies of scale
in the long-run a company that produces and sells popcorn incurs total costs of 1050 when output is 90 canisters and 1200 when is 120 canisters. the popcorn company exhibits
economies of scale because average total costs is falling output rises
benefit of society
encourage creative activity
according to the human-capital view, education
enhances productivity
which of the figures represent the total cost curve for a typical firm
figure 2
when an oligopoly market searches Nash equilibrium
firm will have to choose best strategy
refer to figure 16-2. which of the following will occur in the long run in this industry
firms will enter this industry
why doesnt total cost curve begin at the origin
fixed cost are positive when output is 0
a gov-created monopoly arises when
gov gives the exclusive rights to sell some good or service
refer to figure 16-6. The firm's maximum profit is
is -2000
empirical work that does not account for differences in the productivity of workers
is likely to misinterpret apparent evidence of labor market discrimination
in the parable of the leaky bucket, a fundamental problem with gov redistribution programs is identified. as long as the gov only have "leaky buckets" at its disposal,
it should not try to reach complete equality in income
dr. benson is regarded as, by far, the best dentist in his part of the country, yet his income is not significantly higher than the average. bo johnson, the best baseball player un the region earns 5 times the average salary
johnson, unlike dr benson, can provide his services to millions
refer to figure 15-1. the shape of the average total cost curve reveals info about the same nature of the barrier to entry that might exist in a monopoly market. which of the following types best coincides with the figure
natural monopoly
a market structure with only a few sellers, each offering similar or identical products, is known as
oligopoly
in the long-run equilibrium
only a perfectly competitive firm operates at its efficient scale
the marginal product of labor is defined as the change in
output per additional units of labor
monopolistic competition is considered inefficient because
price exceeds marginal costs
if duopoly firms that are not collecting were able to successfully collude, then
price rises and q falls
If one firm left a duopoly market where the firms did not cooperate then
price would rise and quantity would fall
if the gov forces this firm at its efficient scale, it will
produce 5 lose 5
the graph illustrates
production function
to maximize total surplus, a benevolent social planner would choose which of the following outcomes
q=45 and p=45
wage is to the labor market as the
rental price of capital is to the capital markety
sherman antitrust act
restricted the ability of competitors to engage in cooperative agreement
in which of the following markets are strategic interaction among firms
tennis balls
which of the following is consistent with the data reported in the figure
the female poverty rate is higher for all age groups than make poverty rate
a cooperative agreement among oligopolists is more likely to maintain
the more likely it is that the game among the oligopolists will be played over and over
The rental price of land is
the price for the flow of services from land over a specified time period
Farmer McDonald sells wheat to a broker in Kansas City, Missouri. Because the market for wheat is generally considered to be competitive, Mr. McDonald maximizes his profit by choosing
the quantity at which the market price is equal to mr mcdonald's marginal cost of production
monopoly competitive firm chooses
the quantity of output to produce, but price of output determined by demand
As the number of firms in an oligopoly increases,
the total quantity of output produced by firms in the market gets closer to the socially efficient quantity.
if the gov decided that each family needed a minimum income of 25,000 and promised to make up the difference between whatever a family earned and 25,000, which of the following is correct
this program reduces the incentive to work to earn any wage up to 25000
an extra dollar of income gives more additional satisfaction to a poor person than to a rich person. this is an important assumption of which of the political philosophy
utilarianism
what political philosophy believes that gov should equalize income...
utilitarian, liberalism, and libertarianism all do not believe the gov...
to maximize profit, a competitive firm hires workers up to the point of intersection of the
value of marginal product curve and the wage
when labor supply increases
wages decrease as long as labor demand is downward sloping
assume a firm is a competitive industry is producing 800 units of output, and its sells each for 6. average total cost is 4. total profit is
1600
suppose this market is served by 2 firms who each face the marginal cost curve shown in the diagram and have 0 fixed costs. the marginal revenue curve that a monopolists would face in this market is also shown. if the firms are able to collude successfully, what is the marginal profit if each firms
2 (difference between 8 and 4 and then split between both firms) and the price will be 9 per unit
how much profit will the monopolistically competitive firm earn in this situation
200
if the us government determines tat the cost of feeding an urban family of 4 is 7,500 per year, then the official
22,500
given that Bearclaws chooses the profit-maximizing price and quantity, what profit level will it obtain
280=(14-4)*70
to maximize profit (or minimizing loss), the firm will produce
30 units
if there are 300 identical firms in the market, what level of output will be supply when price is 1
300*100= 30,000
suppose that the firm pays its workers 45 per day. each unit of output sells for 10. how many workers should the firm i=hire?
4
what is the total revenue from selling 4 units
480
given demand for labor, D1, and supply of labor, S1, what are the equilibrium wage and quantity of labor
5 and 250
suppose the firm hires each unit of labor for 600 per week, and each unit of output sells for 9. what is the value of the marginal product of the third worker
675= (285-210)*9
based upon the info shown, how many units will Bearclaws produce to maximize profit
70
what is the marginal product of the second worker
8
let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. assume two points on the firms productoin functions are (L=12, Q=122) and (l=13, q=130)
8 units of output
What price will the monopolistically competitive firm charge in this market?
80
a competitive firm sells its output for 60 per unit. assume that labor is the only input that varies for the firm. Marginal profit for the 10th worker is 20 units. the marginal product of the 11th worker is 16 units. the firm pays a wage of 150 per day. for 11th worker, the value of the marginal product of labor is
960
which of curve is most likely
?
For a firm, marginal revenue minus marginal cost is equal to
???
assume the market starts in equilibrium at point W in graph (b) and that graph (a) illustrates the cost curves facing individual firms. suppose that demand increases from D0 to D1. which of the following statements is not correct? (most likely not on exam)
???
if the minimum wage in this market is 8, then
???
in the short run, if the market price is P4, individual firms in a competitive industry will earn
???
what price will the monopolist charge in order to maximize profit
???
imagine a small town in which only two residents, Rochelle and Alec work together to decide how many gallons of water to pump
????
hat happens to the labor supply curves in both countries when Mexican workers leave Mexico and move to US
LS increases in US and decreases in Mexico
each august many high school students visit doctor's office to have a sports physical. if price of sports physical fall, what happens in the market for nurses
demand decreases from D2 to D1
Because a firm's demand for a factor of production is derived from its decision to supply a good in the market, it is called a
derived demand
economists generally agree that
differences in average wages do not by themselves provide conclusive evidence about the magnitude of discrimination in labor markets
a disadvantage associated with in-kind transfers to reduce poverty is that they
do not allow poor families to make purchases based on their preferences
chloe and guilherme both work at the local factory producing cars. chloe earns 22 per hour working the day shift, and Guilherme earns 25 per hour working the night shift. Chloe and Guilherme do the same job, have the same experience, and have the same level of education. This means that the
higher-paying job has a compensating wage differential of 3 per hour
economists study poverty and income inequality to answer which of the following questions
how much inequality is there in society
assuming the firm is maximizing profit, this firm is operating
in the short run and earning a positive economic profit
which of the following does not explain the rise in income inequality in the US from 1970 to 2017
increase in minimum wages
the firm hires the factor up to the point where the value of the factors marginal product is equal to the factors price. this statement applies to which factor of production
land, labor and capital
Firms may experience diseconomies of scale when
large management structures are bureaucratic and inefficient
a society of these individuals: sam, tristan, and ulyana. in terms of income and utility, sam is currently...
liberalism suggests that gov policies should strive to increase ulyanas utility
according to the signaling theory of education, better-education workers
likely to be high-ability workers
because of diminishing returns, a factor in abundant supply has a
low marginal product and low rental cost
a recent law school graduate is considering two offers to practice law, one in new york and the other in Illinois. the new york bar exam is very difficult to pass compared with illinois exam.
lower wage in Illinois
curve a is always declining because
we are dividing fixed costs by higher and higher levels of output
after an employer pays the cost of educating a worker, the
worker might look for another job unless his employer pays him more
