Econ 2010 Final
If a purely competitve firm is producing at the MR=MC output level and earning an economic profit, then:
New firms will enter this market
Federal government's greatest source of tax revenue is
Personal income taxes
When a purely competitve industry is in long -run equilibrium, which statement is true?
Price and average total cost are equal
An economy is producing at the least-cost rate of production when:
Price and the minimum average total cost are equal
Alternative fuels become more economically viable as
The price of oil rises
If the price elasticity of supply is 0 and the market demand curve is downward sloping
The producer bears the full burden of a per unit tax upon the good
Since 1900, the relative share of income paid to American resource suppliers as corporate profits, interest, and rent has been about
20 percent
Suppose one worker can produce 15 cookies, two workers can produce 35 cookies together, and three workers can produce 65 cookies together. What is the marginal product of the 3rd worker?
30 cookies
Costs to an economist:
May or may not involve monetary outlays
Implicit costs
"Payments" for self-employed resources
If a firm is currently producing 1,000 units of output, and average variable cost (AVC) is $1.00 per unit, and Total Fixed Cost (TFC) is $500, what is the firm's Total Cost?
$1,500
in a typical graph for a purely competitve firm, the intersection of the total cost and total revenue curves would be :
A break even point
Which of the following taxes is most likely to be shifted
A general sales tax
In his Essay on the Principles of Population, Thomas Malthus argued that
Any temporary increase in living standards would cause people to have more children, and thus increase the population
For a purely competitve seller, price equals:
Average revenue, Marginal revenue, and Total revenue divided by output (all of these)
Marginal cost is equal to
Change in total cost divided by change in output and change in total variable cost divided by chnaage in output
Marginal utility
Change in total utility obtained by consuming one more unit of a good.
The long run equilibrium of a purely competitve industry ensures:
Consumer and producer surplus is maximized.
Productive efficiency refers to
Cost minimization, where P= minimum ATC
In the short run the individual competitve firm's supply curve is that segment of the:
Marginal cost curve lying above the average variable cost curve.
A single buyer is called
Monopolist
Cash expenditures a firm makes to pay for resources are called:
Explicit costs
The long run suppply curve in a constant-cost industry would be
Horizontal
A constant- cost industry is one in which
If 100 units can be produced for 100, then 150 can be produced for 150, 200, for 200, and so forth
The main difference between the short and long run is that:
In the short run, one or more inputs is fixed
A function of the Federal Trade Commission is to
Investigate instances of faulty and misleading advertising
The replacement rate is the birthrate necessary to
Keep a population from decreasing
Identify the five factors of production in an economy
Labor, land, human capital, captial, and entreprenership
Marginal revenue product of an input in a competitve market decreases as a firm increases the quantity of an input used because of the
Law of diminishing returns
The basic purpose of antitrust laws is to
Limit monopoly power in an industry
Which of the following is considered a renewable natural resource
Lumber
When a purely competitve firm is in long-run equilibrium:
Price equals marginal cost
Scarcity arises because
Resources are finite and are inadequate to meet all human wants and needs
A product has utility if it:
Satisfies consumer wants.
A profit-maximizing company should extract a non renewable resource in the present up to the quantity where the:
Selling price of the resource equals the extraction cost plus the user cost of the resource.
Creative destruction:
Stimulates growth, contributes to the production of new goods, and forces firms to be innovative.
When diseconomies of scale occur:
The Long-run average total cost curve rises
If the government levies a tax or fee on hunting licenses and uses the resulting revenue for wildfire stocking programs, this would be an example of:
The benefits-received principle of taxation
The demand for a resource depends primarily on
The demand for the product or service that it helps produce
A firm reaches a break-even point (normal profiit position) where
Total revenue and total cost are equal
Marginal revenue product is the increase in
Total revenue from the use of an additional unit of a resource
In the standard model of a pure competition, a profit -maximizing entreprenuer will shut down in the short run if
Total revenue is less than total variable costs
In the standard model of pure competition, a profit-maximizing entreprenuer will shut down in the short run if
Total revenue is less than total variable costs
The average tax rate is the
Total tax paid divided by a comparison base
A purely competitive firm's short run supply curve is:
Upsloping and equal to the portion of the marginal cost curve that lies above the average variable cost curve
The largest single share of all income earned by Americans consists of
Wages and Salaries
economies of scale
When a firm doubles its inputs and finds that its output has more than doubled, this is known as :
The incidence of a tax pertains to
Who actually bears the burden of a tax
economies and diseconomies of scale
Why the Firm's long-run average total cost curve is U-shaped.
The federal personal income tax is based on the
ability to pay principle of taxation
Resources costs increase in a purely competitve industry. This change will result in a
decrease in the short run supply curve for a firm in the industry
Assume the wage rate increases in a purely competitve industry. This change will ressult in an
increase in the marginal cost curve for a firm in the industry
An increase in interest rates
lowers the present value of a future amount
