econ 101 final

For a perfectly competitive palm tree nursery in South Carolina, the total revenue curve is upward sloping. U-shaped. downward sloping. a horizontal line.

upward sloping.

For a perfectly competitive syrup producer whose average total cost curve does not change, an economic profit could turn into an economic loss if the price of syrup rises. market demand for syrup increases. market demand for syrup does not change. market demand for syrup decreases.

market demand for syrup decreases.

In the short run, a perfectly competitive firm ________ make an economic profit and ________ incur an economic loss. might; will never might; might will never; might will definitely; will never

might; might

When firms in an oligopoly successfully collude and do not cheat on a cartel agreement, they can make a long-run economic profit similar to non-colluding oligopolies. monopoly. perfect competition. monopolistic competition.

monopoly.

The figure above shows the demand, marginal revenue, and marginal cost curves for Paul's Parrot pillows, a single-price monopoly producer of pillows stuffed with parrot feathers. When Paul maximizes his profit, the price is ________ per pillow and the marginal cost is ________ per pillow. $60; $40 $70; $60 $100; $40 $70; $40 $60; $60

$70; $40

In the above figure, the profit-maximizing output for this single-price monopoly is ________ units and the price is ________. 200; $10 200; $30 300; $30 300; $20

200; $30

Use the figure above to answer this question. Pam gives the only piano lessons in town. In order to maximize profit, Pam should give ________ per day and charge ________ per lesson. 4; $30 6; $30 4; $20 4; $40

4; $40

Which of the following is a characteristic of monopoly? There are barriers to enter the market. The firm produces a product that has many close substitutes. The firm's demand is perfectly elastic. The firm faces competition from many other firms.

There are barriers to enter the market.

Which of the following is a characteristic of monopoly? There are barriers to enter the market. The firm's demand is perfectly elastic. The firm faces competition from many other firms. The firm produces a product that has many close substitutes.

There are barriers to enter the market.

A group of firms that has entered into an agreement to restrict output and increase prices and profits is called a multi-firm monopoly. a compliance. a cartel. a duopoly.

a cartel.

For a perfectly competitive rancher in Wyoming, if the price does not change, an economic profit could turn into an economic loss if the average total cost curve shifts upward. average fixed cost decreases. average total cost curve shifts downward. average total cost curve does not change.

average total cost curve shifts upward.

For a perfectly competitive rancher in Wyoming, if the price does not change, an economic profit could turn into an economic loss if the average total cost curve shifts upward. average total cost curve shifts downward. average fixed cost decreases. average total cost curve does not change.

average total cost curve shifts upward.

To increase its profit, a perfectly competitive firm will produce more output when price is greater than average variable cost. average variable cost is greater than average fixed cost. price is greater than marginal cost. price is greater than average fixed cost.

price is greater than marginal cost.

For a perfectly competitive palm tree nursery in South Carolina, the total revenue curve is downward sloping. U-shaped. upward sloping. a horizontal line.

upward sloping.

One way to identify oligopoly is to use the Efficiency test. determine the market's minimum price. determine the market's maximum price. use the Herfindahl-Hirschman Index (HHI).

use the Herfindahl-Hirschman Index (HHI).

The figure above shows the market demand curve and the ATC curve for a firm. If all firms in the market have the same ATC curve, the lowest price at which a firm could stay in business in the long run is ________ per unit and the quantity demanded in the market at that price is ________ units per hour. $20; 4,000 $10; 8,000 $20; 8,000 $10; 4,000

$10; 8,000

A single-price monopoly can sell 2 units for $8.50 per unit. In order to sell 3 units, the price must be $8.00 per unit. The marginal revenue from selling the third unit is $8.50. $6.50. $17.00. $7.00.

$7.00.

In an oligopoly, there are barriers to entry and only one firm. many firms and barriers to entry. few firms and no barriers to entry. barriers to entry and only a few firms.

barriers to entry and only a few firms.

In an oligopoly, there are few firms and no barriers to entry. barriers to entry and only a few firms. many firms and barriers to entry. barriers to entry and only one firm.

barriers to entry and only a few firms.

To be able to price discriminate, a firm must be a natural monopoly. have a public franchise. have a patent. be able to prevent resales of its good.

be able to prevent resales of its good.

To be able to price discriminate, a firm must have a patent. be able to prevent resales of its good. be a natural monopoly. have a public franchise.

be able to prevent resales of its good.

Elsie is a perfectly competitive dairy farmer. The market price of milk was $2.40 but just fell to $2.20 a gallon. Elsie will have to charge some customers $2.40 a gallon to stay in business. will be able to charge her initial customers $2.40 a gallon. will produce the same amount of milk at both prices. can sell as much milk as she wants at $2.20 a gallon.

can sell as much milk as she wants at $2.20 a gallon.

A single-price monopoly transfers economic profit to the government. producer surplus to consumers. consumer surplus to producers. economic profit to consumers.

consumer surplus to producers.

For a perfectly competitive sugar producer in Haiti, a short-run economic profit will occur if the price of each ton of sugar sold is less than the average total cost of producing sugar. greater than the average total cost of producing sugar. greater than the marginal revenue of each ton of sugar. equal to the average total cost of producing sugar.

greater than the average total cost of producing sugar.

Consider a perfectly competitive market that was in a long-run equilibrium when a permanent increase in demand occurs. Which of the following will occur as a result? i.The existing firms will start to earn an economic profit. ii.New firms will be motivated to enter the market. iii.Some firms that cannot meet the new demand will exit the market. i, ii and iii i and ii only i and iii ii and iii only

i and ii only

Boeing and Airbus have entered into a cartel agreement that will enable them to boost their profits. What occurs if Boeing decides to cheat on the agreement? i.Boeing lowers the price of its airplanes. ii.The total industry output increases. iii.The total profits in the airplane industry will decrease. ii only iii only i, ii, and iii i only

i, ii, and iii

Which of the following is a legal barrier to entry? i.public franchise ii.government license iii.patent ii and iii i and ii iii only i, ii, and iii

i, ii, and iii

Computer memory chips are produced on wafers, each wafer having many separate chips that are separated and sold. The above table shows costs for a perfectly competitive producer of computer memory chips. If the market price of a wafer is $2,400 dollars, the firm is incurring an economic loss of $2,800 an hour. incurring an economic loss of $2,000 an hour. making an economic profit of $2,400 an hour. making zero economic profit.

incurring an economic loss of $2,000 an hour.

In perfect competition, marginal revenue increases as more is sold. decreases as more is sold. is equal to the market price. is zero.

is equal to the market price.

The above figure shows a perfectly competitive firm. If the market price is $15, the firm is making an economic profit. is incurring an economic loss. is making zero economic profit. will immediately shut down.

is making an economic profit.

The above figure shows a perfectly competitive firm. If the market price is $10, the firm is making an economic profit. is incurring an economic loss. is making zero economic profit. will immediately shut down.

is making zero economic profit.

Suppose a perfectly competitive market is in long-run equilibrium and then there is a permanent increase in the demand for that product. The new long-run equilibrium will have fewer firms in the market. the same number of firms in the market. more firms in the market. a permanent decrease in supply.

more firms in the market.

The above figure shows the market demand curve for telephone calls. Suppose the marginal cost of a telephone call is 2¢ a minute for a call no matter how many minutes of calls are made and there are 3 firms in the industry. If the firms in the industry operate as perfect competitors, there are ________ minutes of calls made per hour. more than 7 million and less than or equal to 9 million more than 5 million and less than or equal to 7 million between 0 and 3 million more than 9 million

more than 7 million and less than or equal to 9 million

The graph shows the the LRAC facing a ________ where ________ of scale exist when 5 million units are produced. oligopoly; diseconomies natural monopoly; economies natural monopoly; diseconomies oligopoly; economies

natural monopoly; economies

When firms in a perfectly competitive market are earning an economic profit, in the long run firms will exit the market. no new firms will enter the market. the initial firms continue to earn an economic profit. new firms will enter the market.

new firms will enter the market.

The fact that firms in oligopoly are interdependent means that there are barriers to entry. one firm's profits are affected by other firms' actions. they can produce either identical or differentiated goods. they definitely compete with each other so that the price is driven down to the monopoly level.

one firm's profits are affected by other firms' actions.

Alice, Bud, and Celia can produce rubber bands in a perfectly competitive market. If they enter the market, the minimum average total cost for a bundle of rubber bands, for the three of them is $2, $3, and $4, respectively. If the market price is $2.10 per bundle, then all three of them will enter the market. Alice and Bud will enter the market. only Alice will enter the market. Alice and Celia will enter the market.

only Alice will enter the market.

Which of the following is TRUE? In the above figure, if the market is a monopoly, output will be Q3 and price will be P3. perfect competition, output will be Q2 and price will be P2. perfect competition, output will be Q3 and price will be P3. a monopoly, output will be Q1 and price will be P3.

perfect competition, output will be Q2 and price will be P2.

To increase its profit, a perfectly competitive firm will produce more output when price is greater than average variable cost. average variable cost is greater than average fixed cost. price is greater than average fixed cost. price is greater than marginal cost.

price is greater than marginal cost.

The figure shows a perfectly competitive market that was in a long-run equilibrium on demand curve D0. Due to a permanent change in demand to D1, existing firms will begin to make an economic ________ which will result in ________ the market. profit; new firms entering loss; some existing firms exiting loss; all remaining firms exiting profit; existing firms exiting

profit; new firms entering

A natural barrier to entry is defined as a barrier that arises because of technology that allows one firm to meet the entire market demand at lower average total cost than could two or more firms. patents or licenses that exclude others from producing a good or service. many firms producing the good and thereby allowing choice for all consumers. anticompetitive practices by a firm that keep other firms from producing.

technology that allows one firm to meet the entire market demand at lower average total cost than could two or more firms.

Marginal revenue is the change in total revenue from a one-unit increase in the quantity sold. the change in total cost from producing an additional unit of output. another name for total revenue. less than price for a perfectly competitive firm.

the change in total revenue from a one-unit increase in the quantity sold.

If firms in an oligopolistic industry consistently cut their price to sell more output, what price and output will result? the monopoly price and output the competitive price and output a price lower than the competitive price and more output than the competitive amount a price lower than the competitive price and less output than the competitive amount

the competitive price and output