micro final

As shown in Exhibit 9-4, in order to maximize its profit (or minimize its loss), what price should the monopoly charge for its product?

$120 per unit

In Exhibit 11-5, at what wage rate will the firms stop hiring these workers?

$15.00

In Exhibit 11-2, if product price is fixed at $5, the MRP of the third worker is equal to

$175

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

$4.00 and $10,000

In Exhibit 11-4, assume that both input and output markets are perfectly competitive. If one additional server increases the number of meals sold by four per day and each meal sells for $10, each additional food server will be paid:

$40 per day

In Exhibit 13-4, the makers of Healthy Hands Lotion discovered that the lotion can cause negative skin reactions, but they don't inform the buyers. While the market experiences imperfect information, the price and quantity will be

$5.00 and 50 units

If the profit-maximizing monopoly in Exhibit 9-7 becomes a profit-maximizing perfectly competitive market, the price will go from

$8 to $6

Use the data provided in Exhibit 9-5. If the firm decides to produce 7 units of output, profit is equal to

0

The marginal revenue of the second unit of output in Exhibit 9-2 is:

10

Currently, union membership in the United States is about what percentage of civilian employees?

10 percent

In Exhibit 8-4, what is this firm's profit-maximizing rate of output?

16

In Exhibit 9-3, what is the maximum hourly profit that GeneTech can earn from its vaccine?

3,000

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

Which of the following is true about a monopoly

A monopoly charges a higher price and produces a lower output level than if the market were competitive

As shown in Exhibit 8-19, assume that a perfectly competitive industry is in long-run equilibrium at point A. If the demand curve shifts from D1 to D2, the adjustment sequence between points will be

A to B, then to C

In Exhibit 9-1, the marginal revenue curve corresponding to the monopolist's demand curve would be a straight line drawn between points:

A to D

Which of the following best describes why a perfectly competitive firm will sometimes continue producing in the short run even if it incurs a loss?

As long as price exceeds average variable cost, the loss from producing will be smaller than the loss from shutting down, which is equal to the amount of total fixed costs.

In Exhibit 8-13, the firm's short-run supply curve is the marginal cost curve above point

B

Suppose both a monopolist and a perfectly competitive firm are producing in their respective markets at a point where marginal cost is $8 and marginal revenue is $10. What should the profit-maximizing firms do?

Both the monopolist and the perfectly competitive firm should increase output until MC = MR.

The purchase of the assets of one steelmaker by another steelmaker might be a violation of the:

Celler-Kefauver Act

Interlocking directorates are illegal under the ____ whether or not the effect may be to substantially lessen competition.

Clayton Act

In Exhibit 11-3, the total wage cost of hiring 6 employees is:

Correct! $108 per hour.

Which of the following is true under natural monopoly?

Economies of scale exist.

Which of the following would be illegal under the Robinson-Patman Act

ExxonMobil sells gas at a higher wholesale price to independent gas retailers than to ExxonMobil retailers.

Which of the following statements is true?

Government regulation is economically justifiable for a natural monopoly.

If cats become a more popular pet in the United States than they are now, what can we expect to happen to the market for cat food workers?

MRP increases

If more and better technology is used for producing wheat in the United States than in a lesser-developed country, then the:

MRP of the U.S. workers will be higher than the MRP of the workers in the lesser-developed country.

Which of the following best explains an economic criticism of unregulated monopolists?

Monopolists restrict output, and as a result, they fail to produce units that are valued more than the marginal cost of producing them.

In Exhibit 8-8, product price in this market is fixed at $35. This firm is currently operating where MR = MC. Which of the following is true?

Price > AVC and the firm should continue producing its current output.

Which of the following correctly describes price discrimination?

Selling the same product to different people for different prices.

Which of the following is the most accurate definition of a worker's marginal revenue product?

The change in the firm's total revenue as the result of hiring an additional worker.

At the level of output where the marginal cost and marginal revenue curves intersect, two firms demand curves pass above their average total cost curve. One firms is a monopoly and the other is perfectly competitive. Which statement is true for both firms?

The firms are making an economic profit

Which of the following scenarios demonstrates price discrimination?

Tickets to a play are sold for $15 to students and $25 to adults.

A technological advance that increases the productivity of teachers can be expected to have what effects on the equilibrium labor market for teachers?

Wages will rise, and quantity of labor will rise.

A natural monopoly is a market where:

a single large firm can produce the entire market output at a lower per-unit cost than a group of smaller firms.

Campbell Soup agrees to sell its clam chowder to a grocery chain only if the chain also agrees to buy a minimum number of cases of its tomato juice. This is an example of:

a tying agreement

The government's court case against Microsoft is an example of:

antitrust enforcement.

A profit-maximizing firm will continue to expand output:

as long as the revenue from the production and sale of an additional unit exceeds the marginal cost of the unit.

The market price for wallets is $20. Your technology is such that at your most efficient production point, the average total cost of producing a wallet is $2.50. Your manager runs into your office and shouts, "Boss!!! Average costs are rising!! Average costs are rising!!" To make a profit-maximizing decision, you should:

ask the manager about the marginal cost

Consider a regulated natural monopoly. If the regulatory commission wants to establish a fair-return price, then it should set a price ceiling where the demand curve crosses the monopoly's long-run:

average cost curve.

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.

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

In Exhibit 11-5, when the marginal revenue product is $20.00, firms should

continue to hire workers

In Exhibit 13-3, if this is an unregulated monopoly firm, the price and output which would maximize profits are:

price = $10; output = 25

In Exhibit 13-3, if this industry is regulated and the regulatory commission wants revenue to just cover cost, the proper price and output combination to be set is:

price = $5; output = 40

Which of the following is not one of the three basic situations in which regulation is imposed?

price fixing

In Exhibit 8-13, if the price is P3, the firm will

produce Q3 and incur a loss in the short run

A monopolist will maximize profits by:

producing the output where marginal revenue equals marginal cost, just as a perfectly competitive firm will

If the price of labor falls, we can expect

quantity of labor demanded will increase

If a good causes a negative externality, regulation might take the form of a

tax

Which of the following could be a perfectly competitive market?

the market for tradable stock

In the perfectly competitive market, individual firms exert no effect on the market price. Therefore, the firm's marginal revenue is:

the same as the firm's demand curve

In Exhibit 13-3, if this industry is regulated and the regulatory commission sets price equal to marginal cost, then:

the term would suffer loss

If a monopsonist offers a wage of $6, they find that 1,200 people are willing to work for them. This means that the

the total wage cost is $7,200

Products that result in external benefits for society require regulation to correct for

underproduction

The optimal hiring rule is to employ labor up to the point where:

wage = MRP

Which of the following best illustrates perfect competition?

wheat farming

When consumers in a market become fully informed of negative information about the product, we can expect the

demand curve for the product to shift to the left.

If the MRP of labor decreases, labor

demand will decrease

The long run is a planning period:

during which the firm can vary its plant size

In Exhibit 8-6, if this firm is currently producing 20 units of output, this firm is

earning a profit of $10.

The neighborhood ice cream shop finds that when it charges $3 per ice cream cone, its total revenues are $90,000. It has total variable costs of $30,000 and total fixed costs of $40,000. From this we can infer the:

economic profits are $20,000.

A monopsony will

employ a quantity of labor where the marginal revenue product equals the marginal factor cost.

Which of the following is not a characteristic of the structure of perfectly competitive markets?

few sellers

Suppose the price of a product is less than its average variable cost. When the firm's fixed obligations are completely ended, it will now most likely

go out of business

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

identical to the supply curve facing the market

A monopsonies' marginal factor cost (MFC) curve lies above its supply curve because the firm must

increase the factor price to hire more

Suppose a single egg farmer alters the number of eggs she produces but the change in egg output does not have any effect on the market price. This example describes which of the following characteristics of perfect competition?

large number of small firms

Under a per se approach to the antitrust laws,

large size alone can be an antitrust violation

Jerome, the florist, sold 500 bridesmaid's bouquets in June. He estimates that his June costs were ATC = $10, AVC = $6, and MC = $9. If he sold each bouquet at the constant market price of $9, Jerome:

made a loss of 500 dollars

Government regulators can achieve efficiency for a natural monopoly by setting a price ceiling equal to the intersection of the demand curve and the:

marginal cost curve

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

marginal factor cost of labor

The demand curve for labor is identical to the

marginal revenue product curve

The argument in favor of regulation for natural monopolies, externalities, and cases of imperfect information is:

market failure

Both a perfectly competitive firm and a monopolist:

maximize profit by setting marginal cost equal to marginal revenue

Because monopolists are protected by high barriers to entry, they

may be able to earn long-run economic profits

When the court determines that a firm's size alone is sufficient to find that it violated antitrust laws, this criterion is called:

per se

Exhibit 8-1 indicates that this firm is operating in which type of market structure?

perfect competition

Consider a firm operating with the following: price = 10; MR = 10; MC = 10; ATC = 10. This firm is:

perfectly competitive in long-run equilibrium.

The practice of firms temporarily reducing prices in order to eliminate competition is called

predatory pricing