micro exam #3 finel

Refer to Figure 15-4. What price will the monopolist charge in order to maximize profit?

B

If a certain market were a monopoly, then the monopolist would maximize its profit by producing 4,000 units of output. If, instead, that market were a duopoly, then which of the following outcomes would be most likely if the duopolists successfully collude?

If a certain market were a monopoly, then the monopolist would maximize its profit by producing 4,000 units of output. If, instead, that market were a duopoly, then which of the following outcomes would be most likely if the duopolists successfully collude?

revenue equals

Price x Quantity

Raiman's Shoe Repair produces custom-made shoes. When Mr. Raiman produces 12 pairs per week, the marginal cost of the 12th pair is $84, and the marginal revenue of the 12th pair is $70. What would you advise Mr. Raiman to do?

Produce fewer custom-made shoes

Refer to Figure 16-3. The firm in this figure is monopolistically competitive and maximizing profit. This firm

Refer to Figure 16-3. The firm in this figure is monopolistically competitive and maximizing profit. This firm

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

The firm is the sole seller of its product.

Which of the following statements is not correct?

The government may break up a natural monopoly to lower the price charged to customers.

Refer to Figure 14-1. The firm will earn a positive economic profit in the short run if the market price is

above $6.5.

In monopolistically competitive markets, free entry and exit suggests that

all firms earn zero economic profits in the long run.

The average fixed cost curve

always declines with increased levels of output.

A firm produces 400 units of output at a total cost of $1,200. If total variable costs are $1,000

average fixed cost is 50 cents.

If a firm in a monopolistically competitive market successfully uses advertising to decrease the elasticity of demand for its product, the firm will

be able to increase its markup over marginal cost.

Refer to Table 13-7. What is the value of F?

c $100

Price discrimination

can maximize profits if the seller can prevent the resale of goods between customers.

Refer to Table 14-1. The price and quantity relationship in the table is most likely a demand curve faced by a firm in a

competitive market.

Whenever a perfectly competitive firm chooses to change its level of output, its marginal revenue

does not change.

price would rise and quantity would fall.

each firm will charge a price of $40 and each firm will sell 1,500 subscriptions.

In the prisoners' dilemma game, self-interest leads

each prisoner to confess.

In a prisoners' dilemma game,

if the players play the game repeatedly, the players can achieve a higher payoff, on average, than when they play the game only once.

Bubba is a shrimp fisherman who could earn $5,000 as a fishing tour guide. Instead, he is a full-time shrimp fisherman.In calculating the economic profit of his shrimp business, the $5,000 that Bubba gave up is counted as part of the shrimp business's

implicit costs

According to the Clayton Act,

individuals can sue to recover damages from illegal cooperative agreements.

A firm that shuts down temporarily has to pay

its fixed costs but not its variable costs

Suppose that a "doggie day care" firm uses only two inputs: hourly workers (labor) and a building (capital). In the short run, the firm most likely considers

labor to be variable and capital to be fixed.

Refer to Figure 14-1. The firm should shut down if the market price is

less than $3.

Economies of scale occur when.

long-run average total costs fall as output increases.

Average total cost is increasing whenever.

marginal cost is greater than average total cost

If marginal cost is rising,

marginal product must be falling

If duopoly firms that are not colluding were able to successfully collude, then

price would rise and quantity would fall.

The Sherman Antitrust Act

prohibits price-fixing in the sense that competing executives cannot even talk about fixing prices.

According to one theory, advertising sends a signal to consumers about the quality of the product being offered. An implication of this theory is that

the existence of an expensive advertisement is more important than the content of the advertisement.

The short-run supply curve for a firm in a perfectly competitive market is

the portion of its marginal cost curve that lies above its average variable cost.

A natural monopoly occurs when

there are economies of scale over the relevant range of output.

Whenever a cartel in a duopoly breaks down,​

​total output in the market will rise.

Refer to Figure 16-5. The firm's maximum profit is

$0

The following table shows the production costs for The Flying Elvis Copter Rides.Output (Helicopter rides)AverageRefer to Table 13-7. What is the value of C?

$100

Ryzard decides to open his own business and earns $60,000 in accounting profit the first year. When deciding to open his own business, he withdrew $20,000 from his savings, which earned 6 percent interest. He also turned down three separate job offers with annual salaries of $30,000, $40,000, and $45,000. What is Ryzard's economic profit from running his own business?

$13,800

Assume that a local restaurant sells two items, salads and steaks. The restaurant's only two customers on a particular day are Mr. Carnivore and Ms. Leafygreens. Mr. Carnivore is willing to pay $20 for a steak and $7 for a salad. Ms. Leafygreens is willing to pay only $8 for a steak, but is willing to pay $12 for a salad. Assume that the restaurant can provide each of these items at zero marginal cost.

$20

Imagine a small town in which only two residents, Sydney and Matthew, own wells that produce safe drinking water. Each week Sydney and Matthew work together to decide how many gallons of water to pump. They bring the water to town and sell it at whatever price the market will bear. To keep things simple, suppose that Sydney and Matthew can pump as much water as they want without cost so that the marginal cost of water equals zero. The town's weekly demand schedule and total revenue schedule for water is shown in the following table:

$24

Suppose a firm in a competitive market earned $3,000 in total revenue and had a marginal revenue of $30 for the last unit produced and sold. What is the average revenue per unit, and how many units were sold?

$30 and 100 units

Refer to Figure 14-2. The firm will earn zero economic profit if the market price is

$6

Refer to Table 13-8. What is the marginal cost of producing the fifth unit of output?

$70

The following graph depicts the market situation for a monopoly pastry shop called Bearclaws. Refer to Figure 15-5. Based upon the information shown, what are total costs for Bearclaws, given that it maximizes profits?

$700.

Taylor sells 400 candy bars at $0.50 Cach. Her total costs are $125. Her profits are a, S75.00.

$75.00

Refer to Scenario 13-1. Suppose Kore purchases the factory using $200,000 of her own money and $200,000borrowed from a bank at an interest rate of 6 percent. What is Korie's annual opportunity cost of purchasing the factory?

18,000

Refer to Figure 16-3. At the profit-maximizing, or loss-minimizing, output level, how many units of output will the firm in this figure produce?

30

Refer to Figure 16-2. How much output will the monopolistically competitive firm produce in this situation?

30 units

Refer to Table 14-6. In order to maximize profits, the firm will produce

5 units of output because marginal revenue equals marginal cost.

Which of the following is not an example of price discrimination?

A bakery charges a higher price for brownies than for cookies.

Which of the following examples illustrates an oligopoly market?

A city with two firms who are licensed to sell school uniforms for the local schools