Micro Econ Final Exam (Missed Questions)

a) rise; fall

According to the cost-benefit principle, the number of labor hours demanded will _____, and the number of labor hours supplied will _____ as the wage decreases. a) rise; fall b) fall; fall c) rise, rise d) fall; rise

c) both marginal revenue and demand for the labor would increase.

After Giselle increased worker training at her company, the output per worker rose by 5%. What impact would this have on labor's marginal revenue product and her demand for labor? a) marginal revenue product would rise, and demand for the labor would decrease. b) marginal revenue product would decrease, and demand for labor would increase. c) both marginal revenue product and demand for labor would increase. d) both marginal revenue product and demand for labor would decrease.

a) yes, because it added more to revenue than to cost.

Alena manages a small theme park. She hires one more custodian at $450 per week, and her park is cleaner and more attractive. As a result of this improvement, ticket sales rise by 40 tickets per week. Tickets sell for $12. Use the Rational Rule for Employers to determine of hiring the extra custodian was a good move. a) yes, because it added more to revenue than to cost. b) yes, because ticket sales rose more than the price. c) no, it added more to cost than revenue. d) no, price did not rise as much as ticket sales.

a) profit by charging each customer the highest price he is willing to pay

The goal of price discrimination is to increase a) profit by charging each customer the highest price he is willing to pay b) profits by raising the demand to sell at higher prices c) sales by advertising to gain more customers who are willing to pay more d) sales by attracting new groups of customers who are willing to pay more for the product

c) reservation price

The highest price that a customer is willing and able to pay for a product is the customer's a) trigger price b) market equilibrium price c) reservation price d) perfect price

c) the profit margin multiplied by quantity

Total Profit Equals: a) price multiplied by quantity b) total cost minus total revenue c) the profit margin multiplied by quantity d) marginal revenue minus total cost.

d) average revenue; price

Total revenue divided by quantity is called ____ or ____ a) average revenue; profit b) price; marginal revenue c) price; profit d) average revenue; price

c) can identify how much customers are willing to pay, the product cannot be resold, company has market power.

What 3 conditions must be present before a company can price discriminate? a) market power, the product is homogeneous, the demand is elastic b) the product cannot be resold, consumers have differing willingness to pay, there are many sellers. c) can identify how much customers are willing to pay, the product cannot be resold, company has market power. d) highly elastic, can identify customers willingness to pay, seeking market power

d) existing sellers in the market earning economic profits

What attracts new sellers into a market? a) a large number of sellers already in the market b) a market that has not changed in several years c) fewer sellers in the market that a year previously d) existing sellers in the market earning economic profits

c) the greater the market power, the higher the price the firm can charge without losing many customers.

What is the relationship between a company's market power and the price that the company's owner can charge for its product? a) the lower the market power, the firm does not have to worry about losing customers. b) the lower the market power, the higher the price the firm can charge without losing many customers. c) the greater the market power, the higher the price the firm can charge without losing many customers. d) the greater the market power, the lower the price the firm must charge to avoid losing many customers.

d) rises with the gain shared by sellers and buyers

When a price-discriminating company lowers price for potential new customers who wouldn't buy otherwise, total economic surplus a) stays the same, but there is a transfer from buyers to sellers b) rises, with the buyers receiving all the increase c) stays the same, but there is a transfer from sellers to buyers d) rises with the gain shared by sellers and buyers

b) new companies will enter the market, reducing average company profits.

When firms in a market with free entry and exit have economic profits, then: a) some companies will exit the market, reducing average company profits. b) new companies will enter the market, reducing average company profits. c) some companies will exit the market, raising average company profits d) new companies will enter the market, raising average company profits.

a) a larger output; a greater range of prices

When price discrimination is practiced, a company sells ____ and charges ____ compared to what it would do without practicing price discrimination. a) a larger output; a greater range of prices b) the same output; a greater range of prices c) a smaller output; higher prices d) a higher output; higher prices

a) a rising price, higher sales, and increased market power.

When sellers exit a market in which the average seller has losses, the remaining sellers will each experience: a) a rising price, higher sales, and increased market power. b) a rising price, lower sales, and increased market power. c) a steady price, higher sales, and decreased market power. d) a steady price, lower sales, and decreased market power.

b) have a more elastic demand

When setting prices for different groups of customers, a manager should charge lower prices to groups that: a) value the product more b) have a more elastic demand c) have a higher demand d) have a more inelastic demand

a) increases

When the wage for public school teachers rises by 15% in a state, the number of people seeking jobs as teachers: a) increases b) decreases c) remains the same d) fluctuates up and down quickly

b) robot owners gain, and displaced workers lose

Who gains and who loses when robots replace workers? a) displaced workers gain, and robot owners lose b) robot owners gain, and displaced workers lose c) low-wage workers gain, and robot manufacturers lose d) workers gain, and robots lose

a) players have incentives to disregard such agreements

Why are cooperative agreements rare in markets with strategic interactions? a) players have incentives to disregard such agreements b) it is too hard to predict what other players will do c) there is little to gain because noncooperation yields the best possible outcome d) cooperation entails higher costs

a) smaller; more

With a _____ number of sellers in a market, _____ market power tends to exist in the market. a) smaller; more b) smaller; less consistent c) greater; more d) greater; less consistent

b) $8.00

Your company sells 19 units at a price of $10 and must change price to $9.90 in order to sell 20 units. What is the marginal revenue of the 20th unit? a) -$.10 b) $8.00 c) $9.90 d) $198.00

c) marginal revenue

The change in total revenue from selling one additional unit of output is the: a) market power b) profit c) marginal revenue d) collusive reward

a) explicit financial

The formula for calculating accounting profit is total revenue minus ____ costs a) explicit financial b) total c) opportunity d) explicit financial cost minus implicit opportunity

d) it will experience zero economic profits

Assume that there is free entry and exit in the management consulting market. How profitable can Mario expect his new consulting business to be in the long run? a) it will experience continually rising economic profits b) it will suffer economic losses c) it will earn positive economic profits. d) it will experience zero economic profits

c) demand curve is above its average cost curve

Candice's stand-up paddleboard company will earn profits producing and selling at any output level where the company's : a) marginal cost curve is above the demand curve b) average cost curve is above its marginal revenue curve c) demand curve is above its average cost curve d) marginal revenue curve is below its average cost curve

d) independence between

Game theory is helpful in analyzing situations in which there is ____ the decision makers. a) dominance by one of b) independence across all c) unequal information across d) independence between

d) under price discrimination, some customers pay a higher price, and some pay a lower price.

How does the price customers pay under price discrimination compare to the price with no price discrimination or the one that is set according to the marginal cost = marginal benefit? a) there is no difference in the prices. b) under price discrimination, the price is higher c) under price discrimination, the price is lower d) under price discrimination, some customers pay a higher price, and some pay a lower price.

d) rightward shift of the labor supply curve.

If a government increases subsides for childcare, there will be a ____ in the country's labor market. a) move to a different point on the labor supply curve with a smaller quantity. b) move to a different point on the labor supply curve with a larger quantity. c) leftward shift of the labor supply curve. d) rightward shift of the labor supply curve.

c) total costs are less than total revenue.

Marta's company definitely has economic profits in which of the following situations? a) implicit opportunity costs are less than direct financial costs. b) total revenue is less than direct financial costs. c) total costs are less than total revenue. d) total revenue exceeds implicit opportunity costs.

b) the product cannot be resold

Price Discrimination can be successful only if: a) the market is highly competitive b) the product cannot be resold c) there are many sellers d) the company lacks market power

d) MPl x P

The Marginal Revenue product of labor is equal to: a) MPl + P b) MR x Wage c) MR + Wage d) MPl x P