Econ Final

If the restaurant is able to use tying to price salads and steaks, what is the profit-maximizing price to charge for the "tied" good?

$20

Celia's Auto World installs tires on automobiles, light trucks, and sport utility vehicles. She is a profit-maximizing business owner whose firm operates in a competitive market. The marginal cost of installing a tire is $15. The marginal productivity of the last worker that Celia hired was 3 tires per hour. What is the maximum hourly wage that Celia was willing to pay the last worker hired?

$45

If at a market price of $1.75, 52,500 units of output are supplied to this market, how many identical firms are participating in this market?

300

What is the socially efficient quantity of water?

480 gal

At equilibrium, total surplus is represented by the area

A+B+C+D+H+F

If you have a ticket that you sell to the group in an auction, who will buy the ticket?

Biyu

What happens to consumer surplus in the cell phone market if cell phones are normal goods and income of the cell phone buyers rises?

Consumer surplus increases

If there are exactly five sellers of gasoline in Driveaway and if they collude, then which of the following outcomes is most likely?

Each seller will sell 30 gallons and charge a price of $5.

Which of the figures represents the total cost curve for a typical firm?

Figure 2

Which of the following is true about a monopolistically competitive firm?

It can earn an economic profit in the short run, but not the long run.

Which of the following is a necessary characteristic of a monopoly?

The firm is the sole seller of its product

You purchase a $30, nonrefundable ticket to a play at a local theater. Ten minutes into the show you realize that it is not a very good show and place only a $10 value on seeing the remainder of the show. Alternatively you could leave the theater and go home and watch TV or read a book. You place an $8 value on watching TV and a $12 value on reading a book.

You should go home and read a book

If a surplus exists in a market, then we know that the actual price is

above the equilibrium price, and quantity supplied is greater than quantity demand

Your college roommate receives a pay raise at her part-time job from $9 to $11 per hour. She used to work 25 hours per week, but now she decides to work 20 hours per week in order to spend more time studying economics. For this price range, her labor supply curve is

backward sloping

When a firm operates under conditions of monopoly, its price is

constrained by demand

The social cost of a monopoly is equal to its

deadweight loss

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

When the price falls from P2 to P1, consumer surplus

increases by an amount equal to B+C.

Rent, interest, and profit are all forms of income paid to the owners of

land and capital

marginal product decreases

marginal product increases but at a decreasing rate.

If the distribution of water is a natural monopoly, then

multiple firms would likely each have to pay large fixed costs to develop their own network of pipes

Moving production from a high-cost producer to a low-cost producer will

raise total surplus

The accountants hired by Forever Fitness have determined total fixed cost to be $75,000, total variable cost to be $130,000, and total revenue to be $125,000. Because of this information, in the short run, Forever Fitness should

shut down because staying open would be more expensive

One problem with government operation of monopolies is that

the government typically has little incentive to reduce costs

In the labor market in the northern United States, the equilibrium wage

will rise, and the equilibrium quantity of labor will fall