Economics MO4

In Exhibit 11-4, the equilibrium wage and the number of food servers employed per day, respectively, are:

$4.00 - 10,000

In Exhibit 9-3, how much vaccine should GeneTech produce to maximize its profit?

300 doses per hour

As shown in Exhibit 9-4, in order to maximize its profit (or minimize its loss), how much output should the monopoly produce?

4 units per hour

In Exhibit 11-12, suppose this labor market is unionized by a powerful union which forces a wage of $35 upon the industry. The firm would respond by hiring ____ workers and paying a wage of ____.

40-35

Which of the following most clearly illustrates the concept of derived demand?

An increase in the demand for new houses leads to an increase in the demand for construction workers

Some economists argue that monopolistically competitive markets are inefficient because:

Firms do not produce the output rate that would minimize their average total cost

For a monopolist:

Price is above marginal revenue

If marginal cost exceeds marginal revenue, a profit-maximizing monopolist will:

Restrict output to increase the price even higher

Which of the following correctly describes price discrimination?

Selling the same product to different people for different prices.

Which of the following is true for perfect competition, monopolistic competition, and monopoly?

Short-run profits are maximized when marginal cost equals marginal revenue

While there is no specific number of firms that must dominate an industry before it is an oligopoly, the number of sellers characterizes an oligopoly when:

The firms are so large relative to the total market that they can affect the market price

Which of the following distinguishes a natural monopoly from monopoly caused by ownership of a vital resource?

The natural monopoly has a downward-sloping long-run average cost curve as opposed to a U-shaped long-run average cost curve.

Which of the following best explains why the monopolist's marginal revenue is less than the selling price?

To sell more units, the monopolist must reduce price on all units sold

A monopolist can earn an economic profit only when:

average total cost is less than price and the same is true for a perfectly competitive firm.

In order to make oil profits as large as possible, OPEC meets to set oil production quotas for its members. OPEC is best classified as a:

cartel

Suppose a monopolist and a perfectly competitive firm have the same cost curves. The monopolistic firm would:

charge a higher price than the perfectly competitive firm

A monopolist will maximize profits by:

producing the output where marginal revenue equals marginal cost

If the price of labor falls, we can expect:

quantity of labor demanded will increase

A monopolist is a sole ____, and a monopsonist is a sole ____.

seller in a product market - buyer in a labor market

As a result of a kinked demand curve, the price:

settles at the kink

A union may attempt to obtain stricter certification requirements or longer apprenticeships. These changes would raise workers' wages because they:

shift the labor supply curve leftward

A monopolist faces a downward-sloping demand curve because:

the entire market demand curve is the monopolist's demand curve.

A kink in the demand curve facing an oligopolist is caused by:

the tendency of competitors to follow price reductions but not price increases

If the MRP of labor decreases, labor:

demand will decrease

The marginal revenue product of a resource:

equals the extra output produced by an additional unit of the resource multiplied by the marginal revenue per unit of that output

The labor supply curve facing an individual employer in a perfectly competitive labor market is:

horizontal

For a monopsonist, the supply of labor facing the firm is:

identical to the supply curve facing the market

The strategy underlying price discrimination is to:

increase total revenue by charging higher prices to those with the most inelastic demand for the product and lower prices to those with the most elastic demand.

Featherbedding allows unions to increase wages by:

increasing firms' demand for labor

Which of the following is not associated with the monopoly market structure?

many sellers

A monopsonist hires the amount of labor where the marginal revenue product of labor equals the:

marginal factor cost of labor

A firm's demand curve for labor coincides with the:

marginal revenue product curve

Firms should hire additional units of a resource as long as the:

marginal revenue product of the resource exceeds the cost of an additional unit of the resource

Suppose the firm or firms in the market for Good A face a downward-sloping demand curve, maximize profit by producing the quantity at which marginal revenue equals marginal cost, set the price higher than the marginal cost, and break even in long run equilibrium. Which one of the following market structures most likely exists for Good A?

monopolistic competition

In a price leadership oligopoly model,

one firm is the price leader and all other firms follow.