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A buyer or seller that is unable to affect the market price is called

a price taker

A monopoly is a market structure that is characterized by

a single seller of a good or service that does not have a close substitute

Economics is the study of the choices people make to attain their​ goals, given their scarce resources.

Economics Definition

Which of the following is part of the economic analysis of​ discrimination?

Employers who discriminate pay an economic penalty imposed by market competition.

At the​ equilibrium, the price of capital is equal to

the marginal revenue product of capital

The monopolistically competitive firm sells ___ product and faces _____ demand curve

A DIFFERENTIATED A DOWNWARD SLOPING

Which of the factors listed below does NOT cause the demand curve for labor to shift?

A change in the wage

Which of the following factors shifts the labor supply curve?

All of the above

When the government imposes price floors or price​ ceilings, which of the following​ occurs?

All of the above occur Some win some lose there is a loss of economic efficiency

Which of the following terms best describes a state of the economy in which production reflects consumer preferences?

Allocative efficiency

Refer to the graph to the right. Which of the following represents the deadweight loss when the price of tea is​ $2.20 per​ cup?

Area C and E (the triangle) see screenshot

All of the following cost measures reach their minimum points when they are equal to the value of marginal cost, except one. What cost measure is the exception?

Average fixed cost

What is the cost measure equal to AFC +AVC?

Average total cost

Which of the following terms corresponds to a market in which buying and selling take place at prices that violate government price​ regulations?

Black Market

What are the sources of externalities and market​ failure?

Both A and B Incomplete property rights the difficulty of enforcing property rights in certain countries

What happens if a firm increases the number of workers that it hires?

Both the marginal product of labor and the marginal revenue product of labor decrease.

​Trade-offs force society to answer questions such as what goods and services will be​ produced, how will the goods and services be​ produced, and who will receive the goods and services produced. Which of the following countries has an economy where the government makes these​ decisions?

Cuba

Most economists believe that only part of the gap between the wages of white males and the wages of other groups is due to discrimination. Economists believe that some of the gap is explained by which of the following​ factors?

Diffs of experience, diff prefereces for types of jobs diff ed ALL OF THE ABOVE

Which of the following statements is​ correct?

Even though the dollar value of the total benefits of reducing SO2 Emmitions was much greater than the costs, the SO2 cap-and-trade system had effectively ended by 2013

Which of the following are sometimes called accounting costs?

Explicit Costs

Consumer surplus and producer surplus measure the total benefit consumers and producers receive from participating in a market.

FALSE

Market failure refers to a situation in which a market ceases to exist.

FALSE

The market *supply curve* of labor is determined by adding up the wages for each worker at each quantity of labor​ supplied, holding constant all other variables that might affect the willingness of workers to supply labor.

FALSE

The market demand curve for labor is determined by adding up the wages for each worker at each quantity of labor​ demanded, holding constant all other variables that might affect the willingness of firms to hire workers.

FALSE

A tax is efficient if it imposes a large excess burden relative to the tax revenue it raises

False

In the case where transactions costs are​ zero, if the victims of pollution could legally enforce the right of their property not to be​ damaged, the amount of pollution reduction would increase.

False

Refer to the table below. Which of the following costs are implicit costs?

Foregone salary and interest

In a perfectly competitive industry with constant costs, the long-run supply curve will be

HORIZONTAL

When there are many people involved in attempting to reach an​ agreement, the transactions costs are often​ _______ than the net benefits from reducing an externality. In such​ cases, a private solution to an externality problem​ _______ feasible.

Higher; is not

On the diagram to the​ right, movement along the curve from points A to B to C illustrates

Increasing marginal opportunity costs

What is allocative efficiency?

It refers to a situation in which resources are allocated such that the last unit of output produced provides a marginal benefit to consumers equal to the marginal cost of producing it.

Which of the following statements is correct

Legally enforcing trademarks can be difficult

Which of the following covers the study of topics such as inflation or​ unemployment?

Macroeconomics

primary reason debeers limited competition due to barriers of entry

Only debeers had access to most of the diamond mines

Discussions of the economic results of rent control and of federal farm programs would be considered​ ________ analysis, and discussions of whether rent control and the farm programs are good or bad policies would be considered​ ________ analysis.

POSitive; Normative

The relationship between the inputs employed by a firm and the maximum output it can produce with those inputs is called the

Production function

Which of the following terms best describes the result of the forces of competition driving the market price to the minimum average cost of the typical firm?

Productive efficiency

Productive efficiency occurs when a good or service is produced at the lowest possible cost. Allocative efficiency occurs when production is in accordance with consumer preferences.

Productive, Allocative

Advertising intends to shift demand curve TO THE RIGHT and make it more INELASTIC

RIGHT, INELASTIC

Refer to the graph on the right. After rent control is imposed, area A represents

SEE SCREENSHOT the producer surplus transferred from landlords to renters

One of the basic facts of life is that people must make choices as they try to attain their goals. This unavoidable fact comes from a reality an economist calls

Scarcity

Inefficient use of it

See Screenshot

Refer to the graph to the right. When​ 15,000 cups of tea are produced and consumed per​ month, which of the following is​ true?

See Screenshot. All of the above are true.

Which of the graphs above represents a typical average total cost curve?

See Screenshot. B. Big dipper not starting at Zero

In the diagram to the​ right, when the price is ​$45 per​ player, the amount of the shortage is 14 million players per month.

Shortage at 45

A perfectly competitive firm is losing money in the short​ run, and its price is less than its average variable cost. In order to minimize its losses in the short​ run, this firm should

Shut down

Refer to the graph to the right. After the government imposes a price of​ $3.50 in this​ market, area A represents

The consumer surplus transferred to producers A is the rectangle next to the triangle. See screenshot.

Refer to the graph to the right. A tax is imposed in the market for cigarettes that shifts the supply curve from S1 to S2. What area corresponds to the revenue collected by the government from the​ tax?

The dark grey area. See screenshot. CH 4 concept check

Which of the statements below best describes the marginal productivity theory of income​ distribution?

The distribution of income is determined by the marginal productivity of the factors of production that individuals own.

Refer to the graph to the right of the demand curve facing a firm in the perfectly competitive market for wheat. The fact that the demand curve is horizontal implies which of the​ following?

The firm can sell any amount of output as long as it accepts the market price of $7 (Horizontal demand curve. set price)

If marginal revenue slopes downward, which of the following is true?

The firm mist decrease its price to sell a larger quantity

If the market demand curve shifts to the​ right, how will a competitive​ firm's level of output​ change?

The firm will increase its output, and its profits will increase

What is the focus of a command-and-control approach to reducing pollution?

The government imposing quantitative limits on the amount of pollution firms are allowed to generate.

If we are considering further reductions in​ pollution, what rule should we follow to maximize the net benefit to​ society?

The marginal benefit from reducing another ton of pollution should be equal to the marginal cost.

Critics who claim that tradable emission allowances are equivalent to the government issuing licenses to pollute are ignoring the economic ideas that resources are scarce and​ trade-offs exist.

True

Economic surplus is the sum of consumer surplus and producer surplus.

True

In a perfectly competitive industry with INCREASING AVERAGE COSTS the long run supply curve will be

UPWARD SLOPING

Which costs are affected by the level of output​ produced?

Variable Costs

Let MRP equal the marginal revenue product of labor and W equal the wage rate. When should a firm hire more workers to increase​ profit?

When MRP ​> W

In perfect competition, long run equilibrium occurs when the economic profit is ZERO

ZERO

When an employer pays higher wages to compensate workers for unpleasant aspects of their jobs, which of the following is the employer offering?

a compensating differential

The primary difference between absolute and comparative advantage is

absolute advantage refers to the ability to produce more of a good or service using the same amount of resources and comparative advantage refers to the ability to produce a good or service at a lower opportunity cost.

In​ general, the term ​"ceteris paribus​" means

all else equal.

Which of the following is a reason for choosing a salary system rather than the more profitable​ commission, or​ piece-rate system, of​ compensation?

all of the above.

Long Run Equilibrium in Perfect Competition results in

allocative and productive efficiency

Economies of scale exist as a firm increases its size in the long run because of all EXCEPT

as a firm expands its production its profit margin per unit of output increases.

Why do most firms in monopolistic competition typically make zero profit in the long​ run?

because the lack of entry barriers would compete away profits

Economists agree that a monopolistically competitive market structure

benefits consumers because firms to produce products that appeal to a wide range of consumers tastes.

The production possibilities frontiers depicted in the diagram to the right illustrate

both the labor force and capital stock increasing

What term describes teh actions of a firm intended to maintain the differentiation of a product over time

brand management

Suppose the price of a substitute to LCD televisions falls . What effect will this have on the market equilibrium for LCD​ TVs? The equilibrium price of LCD TVs will

decrease and the equilibrium quantity will decrease .

If labor demand is​ unchanged, an increase in labor supply will​ ________ the equilibrium wage and​ ________ the number of workers employed.

decrease;increase

economies of scale happen when the firm's long run average total cost ______ as output increases

decreases

Both buyers and sellers are price takers in a perfectly competitive market because

each buyer and seller is too small relative to others to independently affect the market price

Economic cost of production differ from accounting costs in that

economic cost adds the opportunity cost of a firm using its own resources while accounting cost does not.

​A(n) entrepreneur is someone who operates a​ business, bringing together the factors of productionlong dash ​labor, ​capital, and natural resourceslong dash to produce goods and services.

entrepreneur

Which of the following correctly explains the effect of a variable on the labor demand​ curve?

f human capital increases ​, then the labor demand curve will shift to the right.

When there is a firm with a monopsony in the labor​ market, which of the following​ occurs?

fewer workers, lower wages

The Coase theorem states that

if transactions costs are low, private bargaining will result in an efficient solution to the problem of externalities

hat effect might the government have on​ oligopolies?

impose barriers to entry with a quota to limit foreign competition .

the law of diminishing returns applies

in the short run. In the long run you can change factors

If labor supply is​ unchanged, an increase in labor demand will​ ________ the equilibrium wage and​ ________ the number of workers employed.

increase; decrease

When the marginal product of labor is greater than the average product of labor, then the average product of labor must be

increasing

In monopolistic competition there is/are many sellers who each face a downward-sloping curve

is/are many sellers who each face a downward-sloping curve

monopolistically competitive firm in a long-run equilibrium produces where

its demand curve is tangent to its average total cost curve

The GPA you earn in a particular semester is your MARGINAL GPA, your cumulative GPA is your AVERAGE GPA

marginal;average

If discrimination makes it difficult for a member of a group to find employment in a particular​ occupation, his or her incentive to be trained to enter that occupation is reduced. Which of the terms below is most closely associated with this​ situation?

negative feedback loop

Which type of efficiency does a monopolistically competitive firm achieve in the long​ run?

neither allocative NOR productive

What​ trade-offs do consumers face when buying a product from a monopolistically competitive​ firm?

price GREATER THAN MC bur also have choices more suited to their tastes

A monopolistically competitive firm produces where​ _________, while a perfectly competitive firm produces where​ _________.

price is greater than marginal​ cost; price is equal to marginal cost

By paying college students a subsidy equal to the external benefit from a college​ education, the government will cause students to internalize the externality. That​ is, the external benefit from a college education will become a

private benefit received by college​ students, and the demand curve for college educations will shift up.

Germany has a market economy. As​ such, Germany ​'s economy​ (relative to centrally planned​ economies) tends to result in

productive efficiency and allocative efficiency but not necessarily equity.

How do externalities in the production of electricity result in market failure

provide too much electricity

As output increases, the vertical distance between average total cost and average variable cost curves gets SMALLER and equals AFC

smaller, average fixed cost

If in a perfectly competitive market, firms are facing a price below their average total cost but above average variable cost at the profit maximizing output then

some existing firms will exit the industry

Factors not under a firms control

such as terrorist attacks affect profitability

The term tax incidence refers to

the actual division of the burden of a tax between buyers and sellers in a market

The private benefit is​ ________, while the social benefit is​ ________.

the benefit received by the consumer of a good or​ service; the total benefits from consuming the good or service

As the wage increases,

the demand for labor curve does not shift, but the quantity demanded of labor decreases

Which of the following is the definition of consumer​ surplus?

the difference between the highest price a consumer is willing to pay and the price the consumer actually pays

Which of the following is the definition of producer surplus?

the difference between the lowest price a firm would have been willing to accept and the price it actually receives

Opportunity cost is

the highest valued alternative that must be given up to engage in an activity.

Which of the following terms refers to the lowest cost at which a firm is able to produce a given level of output in the long run when no outputs are fixed?

the long run average cost curve

When a competitive market is in​ equilibrium, what is the economically efficient level of​ output?

the output level where marginal cost is equal to marginal benefit

Economic rent

the price of a factor of production that is in fixed supply

Property rights are

the rights individuals or firms have to the exclusive use of their​ property, including the right to buy or sell it.

When a positive technological change​ occurs,

the same output can be produced with fewer inputs. B. more output can be produced from the same inputs. C. Either​ (a) or​ (b).

A positive externality causes

the social benefit from consuming the good to be greater than the private benefit.

According to the law of​ supply,

there is a positive relationship between price and quantity supplied. as the price of a product​ increases, firms will supply more of it to the market.

According to the law of demand

there is an inverse relationship between price and quantity demanded.

Refer to the graph to the right. The graph shows the market demand for satellite television service. If the market price is​ $81, which consumers receive consumer surplus in this​ market?

those willing to pay more than $81

Which of the following shows a negative nonlinear ​relationship? ​ (assume values of x greater than 0 ​)

y=70/x

Is zero economic profit inevitable in the long run for a monopolistically competitive​ firm?

​No, a firm could try to continue making a profit in the long run by reducing production costs and improving its products.


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