100A Practice Final

less elastic

when there is a negative network externality for a good, the demand for that good will be more or less elastic than it would have been without the negative network externality?

more elastic

when there is a positive network externality for a good, the demand for that good will become more or less elastic than it would have been without the externalitty?

a.) the cost of producing iphones increases

which one of the following would not cause the demand curve for apple iphones to shift? a.) the cost of producing the iphone increases b.) the price of the android phone increases? c.) apple increases its advertising expenditures by 20%. d.) a new study finds that using mobile phones can lead to brain cancer

a.) consumers would bid up the price

which one of the following would not occur if the market price was above the market clearing price? a.) consumers would bid up the price b.) producers would begin to lower the price to sell of excess inventory c.) producers would want to produce and sell more than consumers would want to buy. d) there would be excess supply (surplus)

deadweight loss

with respect to monopolies, this is the net loss in consumer and producer surplus due to a monopolists pricing strategy/policy

steeper, less, more

a firm uses labor and capital to produce output. consider the isocost line of this firm and assume labor is on the x axis and capital is on the y axis. if the wage rate increases, then the iso cost line becomes __________(steeper/flatter) the firm uses _______ (less/more) and _______ (less/more) capital

intertemporal price discrimination

because of the rise of digital distribution of video games, video game developers are now able to directly control the retail price of their products, rather than retail prices being set by many competing stores like best buy and game stop. a common pricing strategy for video game developers is to sell a game at a high price when the game is first released. some timelater they will offer the same game as a discount, what is this an example of?

a.) when the market demand curve intersects with an upward sloping region of a single firms average total cost curve

excluding the case when the government decisdes to create a legally enforced monopoly, which answer below describes the condition under which a monopoly is likely to emerge through the growth of a single firm outcompeting its smaller rivals? a.) when the market demand curve intersects with a downward sloping region of a single firms average total cost curve b.) when the market demand curve intersects with an upward sloping region of a single firms average total cost curve c.) when a single firms marginal revenue curve intersects with that firms marginal cost curve. d.) when a single firms marginal revenue curve intersects with that firms average cost curve

upward, reductions

higher input prices result in _____ shifts of MC and ______ in output

marginal revenue is greater than marginal cost

if current output is less than profit maximizing output, which of the following mus be true? a. average revenue is greater than average cost b.average revenue is less than average cost c.marginal revenue is less than marginal cost d. total revenue is less than total cost e. marginal revenue is greater than marignal cost

complements

if the cross price elasticity of two goods is negative, we can conclude that they are ______.

substitutes

if the cross price elasticity of two goods is positive, we can conclude they are _______

third degree price discrimination

intertemporal price discrimiation is a form of what

few, inelastic

it is likely that a monopoly power will be exhibited when there are _______ (few/many) firms in the market and if the demand curve faced by each firm is relatively ________ (inelastic, elastic)

deadweight loss from monopoly power on the graph

on a graph, this is the area below the average revenue curve and above the marginal cost curve, bounded by thee quantities produced by competitive and monopoly markets

is constant at all levels of output

suppose a company's production process exhibits constant returns to scale at all levels of input.the average cost of production is _______

it will not change

suppose that the price of good A and good B were to suddenly double. if good A is plotted along the horizontal axis and good B is plotted along the vertical axis, what would happen to the slope of the budget line?

false

t or f? a firm can exert monopoly power if and only if it is the sole producer of a good

true

t or f? average total cost is decreasing when marginal cost is less than average total cost

true

t or f? if a firm charges less than market price, it loses potential revenue

true

t or f? if a firm charges more than the market price, it loses all its customers to other firms

true

t or f? marginal cost curve crosses average total cost curve at its minimum point

true

t or f? marginal cost curve crosses the average variable cost curve at its minimum point

false

t or f? the degree of monopoly power a firm possesses can be measured using the formula: L= (P-AC)/AC

true

t or f? the firm cannot influence over market price because it is too small.

difference between price support and price floor

the government buys the excess supply to maintiain a price support but not for a price floor. What is being described here?

be higher than

the lasperyes price index tends to be _________ theideal cost of living index

two part tariff

the local cable tv company charges a hook up fee of $30 per month. customers can then watch programs on a pay per view basis . what is this is an example of?