econ exam 3

Suppose a firm produces 20 units of output. At this level of output, ATC = 35, P = 50, MR = 30, and MC = 30. The firm's economic profit is:

$300

Based on the table, what must be TRUE about the labor supply curve as the wage rate rises from $20 to $30 per hour?

As the wage rate rises, more hours of leisure are consumed.

According to the table, the firm should hire ____ workers.

8

Which act established an independent regulatory body?

Federal Trade Commission Act

Which statement(s) is true? I. José has been told that, since the job he has just started is part of a union shop, he has thirty days to join the union. II. Agatha has learned that because her workplace is a clo sed shop she must pay union dues even though she is not a member of the union. III. Michelle found out that she could not get a job at the local factory since it is a closed shop and she is not a member of the union

I and III only

Which statement is NOT true in determining the equilibrium price and quantity for a monopolist?

Monopolists select the price that is equal to the average total cost.

how do you find total revenue?

Price x Quantity

Which stipulation is the main feature of the Americans with Disabilities Act?

The Act prohibits discrimination against people with a physical or mental disability who could perform a job with reasonable accommodation.

Which of these is NOT one of the potential benefits of labor unions?

Unions may reduce a company's profits.

Which factor will NOT shift the labor supply curve to the left?

a new miracle drug that increases longevity

Which of these is the BEST example of a natural monopoly?

an electric utility company

All of these would cause a rightward shift in the labor demand curve EXCEPT

an increase in the use of capital

The main difference between marginal revenue product (MRP) and the value of marginal product (VMP) is that VMP:

applies to firms selling in competitive markets, while MRP applies to firms selling in all markets.

A monopolistic competitor is like a perfectly competitive firm in the long run because:

both firms will earn a normal profit

A monopolist sells 2,000 units for $20 each. The total cost of 2,000 units is $30,000. If the price falls to $19, the number of units sold increases to 2,100. The total cost of 2,100 units is $30,075. When the monopolist moves from a price of $20 to $19, the marginal revenue will

decrease

monopolistically competitive markets and perfectly competitive markets do NOT share which characteristic?

differentiated products

Blocked entry exists under monopolistic competition.

false

If wage discrimination against women exists within some firms, Becker proposes that women who are not discriminated against will be paid higher wages

false

In the short run, when labor is the only variable factor of production, the elasticity of demand for labor tends to be more elastic.

false

Interdependence is a key attribute of firms in monopolistic competition.

false

Pure competition and pure monopolies are very prevalent in the economy

false

An increase in the demand for a firm's product will increase the:

firm's demand for labor but not the value of the marginal product.

Which of these is NOT a characteristic of a competitive labor market?

firms are price makers

what are the two types of advertising?

informational and persuasive

A deadweight loss:

is the same as welfare loss.

If an oligopolistic firm believes that its competitors would match a price decrease, but not match a price increase, its demand curve is:

kinked, being steeper below the current price

Which of these is NOT an example of a natural monopoly?

local newspaper

Ticketmaster has an exclusive right to sell tickets to certain events, which is an example of:

market power

A firm that is the only seller of a good with no close substitutes is a(n):

monopolist

A market situation in which large numbers of firms produce similar but not identical products is:

monopolistic competition

Large cities typically have many grocery stores and most sell similar products of various brands and quality. The grocery store market in a big city can be BEST classified as:

monopolistic competition

A one-firm industry with no close product substitutes and substantial barriers to entry is called a(n)

monopoly

A(n) _____ market is a market in which just a few firms control a large market share.

oligopoly

Which of these is NOT an example of product differentiation?

price discrimination

What is NOT a method of regulating a natural monopoly?

selling pieces of a company to different owners to spur competition

Which of these is NOT a government -imposed restriction that could keep potential entrants out of a market?

subsidizing imported goods

The marginal physical product of labor is:

the change in output a firm receives from hiring an additional worker.

The idea that the demand for labor is a derived demand means that:

the demand for labor depends on the demand fo r the product the labor produces

Assume that a monopolistically competitive firm faces the following situation: P = $14, output = 9,000 units, MC = $11, ATC = $16, AVC = $7, and MR = $11. Which statement is correct regarding profit maximization?

the firm is minimizing its losses

For both the monopolist and the perfectly competitive firm:

the profit-maximizing output occurs where MR = MC

Which piece of legislation ended "closed shops" in the American workplace?

the taft-hartley act

Which theory of economic discrimination was proposed by the influential economist Gary Becker?

the theory of discriminatory tastes

Which characteristic is NOT typical of a monopoly?

there is low demand for the product

Which repeated game strategy does the MOST to reward cooperation and punish defection while producing the greatest efficiency?

tit-for-tat strategy

A cartel will maximize its profits as long as it limits industry output to the level found where the MR and MC curves intersect.

true

A dominant strategy occurs when one player chooses the same action regardless of what the other player chooses.

true

A large increase in the value of the stock market will shift the labor supply curve to the left

true

A noncooperative game includes players who neither negotiate nor cooperate in any way

true

Buyers cannot easily substitute other products for those sold by a monopolist.

true

Gary Becker believes that firms that do not discriminate will attract the best employees and earn higher profits than firms that do discriminate.

true

If labor's share of the total cost is small, then the demand for labor tends to be rather elastic

true

In a Prisoner's Dilemma, the players each select the strategy that will produce the best outcome for them personally

true

One of the practical implications of the existence of the Nash equilibrium is that game theory can be fruitfully used to analyze real-world economic problems

true

The kinked demand curve explains pricing strategy in oligopolistic markets.

true

A(n) _____ shop is a workplace in which workers do not have to be union members to be hired but must join the union within thirty days

union

The game theory table for Barbara and Helen (with Barbara's profits in regular text and Helen's profits in italics) indicates that:

Both Barbara and Helen have dominant strategies to earn profits.

Papabear Corporation is a single seller of Wonderstuff, but there are two substitutes for Wonderstuff. Given this situation, Papabear:

cannot be a monopoly because there are substitutes for Wonderstuff

how do you find marginal cost?

change in total cost / change in quantity

how do you find marginal revenue?

change in total revenue / change in quantity