practice quizzes Econ

A monopolist is ______ likely to advertise than a monopolistically competitive firm.

less

Over the long run, a monopolist

can continue to make economic profits if it can maintain a monopoly and keep competitors from entering the market

Suppose that at the current level of production, the price of a monopolist's product is equal to $15 per unit. Marginal revenue is equal to $10 per unit, and marginal cost is equal to $15 per unit. This monopoly

can increase its profit by producing and selling fewer units of its product.

Which of the following is considered to have derived demand? I. a large Pizza Hut pizza II. an oven used to bake the pizza III. an employee of Pizza Hut

II and III

A shift in the labor supply curve can be caused by

demographic changes, immigration, migration, and other employment opportunities

The type of demand that factors of production are said to have is

derived demand

The value of the marginal product curve slopes _________ due to _______________

downward, diminishing marginal product

Under monopolistic competition, there are:

no long run barriers to entry of new firms

The supply curve for land is ordinarily

vertical

Consider Dirk and Lee. They are both eating pizza. Which of the following statements is true regarding their satisfaction and utility?

It is difficult to determine because utility is subjective.

To maximize profits, firms expand output until

MR = MC

You own a pizza restaurant that employs workers at the minimum wage. Suppose the minimum wage increases. What is the likely result?

The quantity of labor demanded falls

What effect would tougher immigration laws have on labor supply?

decrease the supply of labor

For a perfectly competitive firm, marginal revenue is

equal to price

Which of the following is NOT considered a natural barrier?

licensing

A good example of a monopolistically competitive market is

local restaurants

A natural monopoly exists when a single seller experiences ____________ average total costs than any potential competitor.

lower

Under monopolistic competition, a market has

many firms

By choosing to consume at the consumer optimum, consumers will

maximize their total utility.

Compare long-run equilibrium in a market with monopolistic competition and a competitive market. Long-run equilibrium under monopolistic competition results in __________ output and a ________ price.

more; lower

on a backward-bending labor supply curve, at the point it bends back, the substitution effect

must be less then the income effect

Apartments in New York City are priced higher than those 15 miles from the city because of

of the difference between what a factor of production earns and what it could in earn in the next- best alternative.

Monopolies choose their profit maximizing:

output levels and price

Monopoly power measures the ability to set the ________ for a good.

price

Under monopolistic competition, firms produce

products that are somewhat different

When consumers get the biggest bang for the buck, we say they

reached a consumer optimum.

In a perfectly competitive market, the price of the product is

set by market supply and demand

If the demand for labor increases, there will be a

shortage of workers, and the equilibrium wage will rise.

The price of a competitive firm's product is $50 per unit. The firm currently has marginal cost equal to $40. To maximize profits this firm

should increase its output

Economists use ____________ as a measure of the relative level of satisfaction when someone consumes a good or service.

utility

Monopolies lead to

Both rent seeking and deadweight loss are true.

Which of the following would be considered a monopsony in the labor market?

a company town

In monopolistic competition, demand for a single firm's product is

a fraction of overall market demand

Profits when a competitive firm shuts down are -$7,250 and -$250 when the firm continues to produce. This firm will minimize losses by

continuing to produce

Which of the following types of firms most closely fits the description of a competitive firm?

corn farmers

If the "bang per buck" for land is greater than capital, and "bang per buck" for capital is greater than labor, then to obtain the right mix of resources the firm should

employ more land and capital and less labor.

Firms producing an identical product in a competitive market are producing at a level of output that maximizes profit. The current market price is $4.50 per unit and the firms are producing at a long-run average cost of $3.50 per unit. Over the long-run one should expect

entry of new firms into this market

In monopolistic competition, the firm's optimal price is

grater than marginal cost

A firm that wants to employ workers should

hire workers as long as the wage is less than the value of the marginal product.

onverse, an apparel company, has been fairly successful selling denim-colored college sportswear. Lydia sees an opportunity for profit and enters the market. After producing her profit maximizing level of output, she finds that her average total cost per unit is $40, her average variable cost per unit is $30, and the market price is $35. In the short run, Lydia should

stay in business even though she is suffering a loss

Which of the following is NOT a way in which monopolistically competitive firms can choose to differentiate?

style or type, location, quality

If the current wage for nurses is higher than the equilibrium wage, this will create a

surplus of nurses and downward pressure on wages