microeconomics

Refer to the table below. At an output of 3 units, the average variable cost is Q,TFC,TVC,TC 0,$90,$0,$90 1,$90,$25,$115 2,$90,$32,$122 3,$90,$42,$132 4,$90,$64,$154 5,$90,$95,$185

$14

Refer to the graph above for an industry. If the industry were a monopoly, the product price would be:

$16

I'MaPizzaCo. produces and sells specialty pizzas. Last year, it produced 8,000 mushroom,sausage and spinach pizzas and sold each one for $8. To produce these 8,000 specialty pizzas,the company incurred variable costs of $24,000 and a total cost of $40,000. I'MaPizzaCo'saverage fixed cost to produce 8,000 specialty pizzas was:

$2

Refer to the above graph. At what price will the firm break even?

$5

Refer to the above graph. At what price will the firm make an economic profit?

$7

Refer to the graph below. What is the profit-maximizing output level?

22 cases

Suppose that one worker can produce 15 cookies, two workers can produce 40 cookies together, and three workers can produce 75 cookies together. What is the marginal product of the 2nd worker

25 cookies

The table below sets out cost information for the production of volleyballs. Some values aremissing. QuantityVariable CostFixed CostTotal CostMarginal Cost003030011230B1222530CD3A307214 What is the correct answer for the cell containing A?

42

Refer to the figure below. If the market price falls to $9, the perfectly competitive producer should produce ______ unit to maximize profits.

700

Refer to the above graph. The perfectly competitive firm should shut down if the quantity of output that it could sell falls below:

A

refer to the above graph. There are economies of scale:

After Q4

____________ arises when firms act together to reduce output and keep prices high.

Collusion

How does the U.S. Bureau of Labor Statistics gather information with regard to the typical consumption choices of Americans?

Consumer Expenditure Survey

____________ refers to the additional revenue gained from selling one more unit.

Marginal revenue

Refer to the above graph. It shows short-run cost curves for a competitive firm. At what price would the firm break even?

P3

Refer to the graph above. At its equilibrium level of output, this monopolist earns:

Positive economic profits

If monopolists are able to produce fewer goods and sell them at a higher price than theycould under perfect competition, the result will be

abnormally high sustained profits.

Consider the perfectly competitive firm pictured above. At its short-run equilibrium point, the firm is:

breaking even

Oligopoly firms acting individually may seek to gain profits _______________.

by expanding levels of output and cutting prices

The ______________ of all firms can be broken down into some common underlyingpatterns.

cost structure

If a monopoly or a monopolistic competitor raises their prices, the

decline in quantity demanded will be larger for the monopolistic competitor.

The term ___________________ is used to describe the common pattern whereby each marginal unit of a consumed good provides less of an addition to utility than the previous unit.

diminishing marginal utility

In microeconomics, the term ___________________ is synonymous with decreasing returnsof scale.

diseconomies of scale

In the monopolistically competitive market for figure skate blades, manufacturers offer an array of products that are

distinctly different in a particular way.

The demand curve as perceived by a monopolistic competitor is ____________

downward-sloping

A two firm oligopoly is known as a

duopoly.

In order to calculate marginal cost, the change in ______________ is divided by the amountof change in quantity.

either total cost or variable cost

accounting costs represent

explicit costs paid by the firm

Natural monopolies result from:

extensive economies of scale in production

A firm's ________ consist of expenditures that must be made before production starts that ________ over the short run regardless of the level of production.

fixed costs, do not change

From a short-run perspective, a firm's total costs can be divided into _____ costs, whicha firm must incur before producing any output, and ________ costs, which the firm incurs in the actof producing.

fixed, variable

An inferior good is a product:

for which demand decreases as income increases

A perfectly competitive industry is a:

hypothetical extreme.

A perfectly competitive industry consists of firms that produce ________ products.

identical

__________ represent the opportunity cost of using resources that the firm already owns.

implicit costs

The term _____________ describes a situation where a ________________ causes a reduction in the buying power of income, even though actual income has not changed.

income effect; higher price

When economists attempt to predict the spending patterns of U.S. households, they will typically view the _____________________ as a primary determining factor that influences the individual consumption choices that each will make.

income level of each household

a perfectly competitive firm will react to profits by _________________.

increasing its productions

The economies-of-scale curve is a long-run average cost curve, because

it allows all factors of production to change

Which of the following is most likely to be a monopoly?

local electricity distributor

When a natural monopoly exists in a given industry, the per-unit costs of production will be

lowest when a single firm generates the entire output of the industry.

If a monopolist increases quantity by one unit, but sells the increased output at a slightlylower price,

marginal revenue is affected by adding one additional unit sold at the new price.

The term _________________ refers to the additional utility provided by one additional unit of consumption.

marginal utility

The perceived demand curve for a group of competing oligopoly firms will appear kinked as a result of their commitment to

match price cuts, but not price increases.

As the name monopolistic competition implies, a firm''s decisions in this setting will in certainways resemble ______________ and in other ways resemble ________________.

monopoly; perfect competition

When economies of scale for a market are large relative to the quantity demanded in the market, a ____________ exists.

natural monopoly

A form of industry structure characterized by a few firms each large enough to influence market price is

oligopoly

Jay and Jenny are married with two children. They are preparing a household budget for the coming year. Based on statistical information for American households, approximately what portion of this family's annual consumption will most likely be budgeted for food and vehicle expenses?

one-third

Following the assumption that firms maximize profits, how will the price and output policy ofan unregulated monopolist compare with ideal market efficiency?

output will be too small and its price too high

In a monopolistically competitive market, the rule for maximizing profit is to set MR = MC, but

price is higher than marginal revenue.

The term _______________ refers to a firm operating in a perfectly competitive market thatmust take the prevailing market price for its product.

price taker

Which characteristic would best be associated with perfect competition?

price takers

A monopolist is able to maximize its profits by

producing output where MR = MC and charging a price along the demand curve.

If an individual perfectly competitive firm charges a price below the industry equilibrium price, it will

sell all that it produces but gain less revenue than competing firms will.

The ________________ arises when a price changes because consumers have an incentive to consume less of the good with a relatively higher price and more of the good with a relatively lower price.

substitution effect

Economists are able to determine total utility by:

summing up the marginal utilities of each unit consumed

The demand curve for a monopoly's product is

the market demand for the product

Because a monopoly's demand curve is the same as the market demand curve for its product

the monopoly must lower its price to sell more of its product.

The fast-food industry is not considered perfectly competitive because

there is a very large number of firms.

The marginal cost curve is generally __________, because diminishing marginal returnsimplies that additional units are ____________.

upward-sloping; more costly to produce

In microeconomic terms, the ability of a good or a service to satisfy wants is called:

utility.

In the long run, firms can choose their production technology, and so all costs become ______ costs.

variable

If a monopolistic competitor raises its price, it ___________ customers than a perfectlycompetitive firm, but ____________ customers compared to the number that a monopolythat raised its prices would.

will lose fewer; it will lose more

It is said that in a perfectly competitive market, raising the price of a firm's product from theprevailing market price of $179.00 to $199.00, __________________.

would result in the loss of all sales to competitors