economics exam 2
downward sloping
If the firm has no competitors, the marginal revenue curve is
there are fixed costs
In figure 4.2 the reason that point A is not through the origin but starts up on the vertical axis is that...
in figure 5.4 a monopolist would charge which price?
P4
It is $5
Suppose an apple pie sells at a grocery store for $5. Suppose that the grocery store purchased it from a baking company for $4. suppose the baking company paid $2 for ingredients, $1 in profit. What is the GDP contribution of the pie?
removes food and energy from the price index
The "core rate" of inflation
includes all goods and services people buy (not just what "average" people buy).
The Personal Consumption Expenditures Index...
maximize profit
a key assumption about the way firms behave is that they...
the percentage of sales in the industry by the largest firms
an indicator of the degree of competiton in an industry is the concentration ratio. It measures...
oligopoly
an industry in which there are just a few large firms is likely to be characterized by
monopolistic competition
an industry with Herfindahl-hershman ...
variable or changeable costs
costs which increase with an increase in output are called
a firm makes more than the minimum required to maintain the incentive to remain in the industry
economic profit exists whenever...
inversely related to the number of firms competing in the industry
economic theory would suggest that the profitability of an industry would be
overstates it by a difference of about .8% (meaning that an official inflation rate of 1.8% is really only about 1%).
economists generally believe that, relative to the true cost of living, the CPI
a single seller
for a market to be characterized by monopoly, there must be
net exports are -$0.5 trillion
if GDP is $10 trillion...
more than this quantity
if MC>MR, the firm should produce
other farmers are likely to plant the same vegetable, pushing down the prevailing market price
if a farmer earns a larger profit than the "normal profit" by producing a special type of vegetable that becomes popular,
decreasing
if a firms marginal cost is smaller than its average total cost, its average total cost is
downward sloping
if the market price for a good produced by a price taking firm is $6 the firms total revenue is...
the loss the firm makes from shutting down (its TFC) is less than the loss they make as a result of producing
if the price is less than the average variable cost, then
discouraged worker effect
if the unemployment rate falls because the number of people not working but searching for work falls, economists would attribute this to the
structurally unemployed
in 2005, general motors announced a 20% reduction in its staffing levels and the closure of many assembly plants. those laid off as a result would likely be classified as
The firm will go from making a normal profit to a loss that is big enough to make it want to shutdown.
in figure 5.8 if the supply curve moves from S3 to S5 ...
counted, but goods produced by american firms in foreign firms in the US are
in measuring Gross domestic product, goods produced by foreign firms in the US are
to the left and up from the minimum of the MC
in order to be drawn correctly, the minimum of the AVC is...
the percentage year-to-year increase
inflation is measured using _______ in a price index
the addition to cost associated with one additional unit of output
marginal cost is
quality has remained steady
one of the reasons that Real Gross Domestic Product is not synonymous with social welfare is
inflation
one subject of study for macroeconomics is
more workers always produce more
referring to Figure 4.1 the increase in output from point B to C is greater than the increase in output from point C to D because
$110
referring to table 4.1, box F should be filled with
is 100
suppose there are only two goods (good A and good B) ...
issues relating to frequency of market basket updates
the BLS has recently made explicit adjustments in its CPI calculations to control for
perfect competition and monopolistic competition
the absence of freedom of entry and exit is key to fact that there is no pressure for economic profit to go to zero under
monopolistic competition
the fast food industry can be modeled best using the model of
the percentage increase in the price index from one year to the next
the inflation rate is
monopoly
the local residential electrical power industry can be best modeled using the model of...
labor force participation rate
the percentage of the population aged 16 or older that is in the labor force
TR is maximized
the quantity where MC=MR is also the quantity where
one of (if not) the worst post-World War II recession
the recession of 2007-2009 has been
a monopolist or a perfect competitor
the shape of the firm's marginal revenue curve depends ultimately on whether the firm is...
a farm
the typical firm in perfect competition is
oligopoly
there are 15 airlines that will take you from NY to LA the best model to analyze this market is ...
low barriers to entry
under monopolistic competition, there are
MC
when firms are in perfect competition, the result is that firms charge a price that is always equal to its
whether the firm faces competition
whether marginal revenue is constant or decreasing depends on...
MC=TC(Q)-TC(Q-1)
which of the following algebraic expression is inaccurate?
powerful buyers
which of the following is NOT an assumption of perfect competition
