econ hw 6

Chapter 13 - The Printech Company has a monopoly on the sale of a specialized color printer. If it sells two of these printers its total revenue is $1,000, and if it sells three color printers its total revenue is $1,600. The marginal revenue of the third color printer sold is

c- $600

Chapter 13 - Refer to Figure 13.5. The profit-maximizing level of output for this monopolist is ________ units of output.

c- 22

Chapter 12 - ________ reflects household willingness to pay, and ________ reflects the opportunity cost of the resources needed to produce a good.

c- Price; marginal cost

Chapter 12 - If a restaurant runs a special and sells a turkey dinner for $5.50, Harry buys one turkey dinner a week. If turkey dinners are not on special and the price is $17.00, Harry buys zero turkey dinners per week. Which of the following is true?

c- The value of Harry's marginal utility from a turkey dinner is at least $5.50 and less than $17.00.

Chapter 12 - To conduct a general equilibrium analysis of a change in consumer preferences away from beef and toward chicken, you must consider

c- all of the above

Chapter 13 - Suppose we know that a monopolist is maximizing its profits. Which of the following is a correct inference? The monopolist has

c- equated marginal revenue and marginal cost.

Chapter 13 - The demand for food will likely be price ________ while the demand for a Big Mac hamburger will likely be price ________.

c- inelastic; elastic

Chapter 12 - Suppose a policy change will generate $100,000 of benefits for low-income families and $80,000 of costs for high-income and middle-class families. This change can best be described as

c- potentially efficient.

Chapter 12 - If no one can be excluded from consuming its benefits and there is no rivalry in consumption, then the good is a ________ good.

c- public

Chapter 12 - The whole class of goods that will be underproduced or not produced at all in a completely unregulated market economy are referred to as

c- public goods.

Chapter 12 - Market failure occurs when

c- resources are misallocated, or allocated inefficiently.

Chapter 12 - Suppose there is a permanent shift of consumer preferences away from popcorn and toward peanuts. The most likely result would be

c- short-run profits in the peanut market increase.

Chapter 12 - Efficiency occurs when

c- the economy is producing what people want at least possible cost.

Chapter 13 - Refer to Figure 13.5. The profit-maximizing price for this firm is

x- $7 x-$9

Chapter 13 - When a monopolist sells two units of output its total revenue is $600. When a monopolist sells three units of output its total revenue is $630. In order to sell three units of output instead of only two, the monopolist must

x- decrease its price by $30 per unit. x- increase its price by $30 per unit.

Chapter 14 - Assume that firms in an oligopoly are currently colluding to set price and output to maximize total industry profit. If the government forces the oligopolists to stop colluding, the price charged by the oligopolies will ________ and the total output produced will ________.

x- decrease; decrease x- increase; increase

Chapter 13 - For a monopolist, price

x- is less than marginal revenue. x- can be greater than or less than marginal revenue.

Chapter 12 - Society will produce the efficient mix of output if all firms equate

x- marginal cost and average total cost. x- price and average total cost.

Chapter 14 - Entry to and exit from a ________ market are ________.

x- oligopolistic; easy x- perfectly competitive; difficult

Chapter 13 - The Gold Goggles Company has a monopoly over the sale of gold eyeglass frames. This company is currently pricing and producing where marginal revenue is equal to marginal cost. It is selling 50 gold eyeglass frames at a price of $5,000 each. Total costs for the company are $300,000 of which fixed costs are $100,000. You are hired as an economic consultant to this company. You should advise this monopolist to

x- produce in the short run but exit the industry in the long run if conditions do not change. x- shut down in the short run and exit the industry in the long run.