ECON
refer to figure 22.3 for a perfectly competitive firm. this should shut down at any price below
$10
the marginal cost of the fourth unit of output in table 21.4 is
$20.00
what is the marginal cost of the 120th unit of output in Figure 21.2
$288.00
the marginal cost of the third unit of output in table 21.5 is
$3
the total cost of 3 units of output in Table 21.5 is
$30
at 10 units of output in Table 21.2, the total fixed cost is
$40
in figure 24.2, a profit maximizing monopolist will charge a price of
$5.50
the average variable cost of the second unit of output in Table 21.5 is
$6.00
at 4 units of output in table 21.4, the total variable cost is
$62.00
the average variable cost of the second unit of output in table 21.5 is
$8.00
refer to figure 19.1 the total consumer suplus in this market is equal to
$900
suppose that a firm has an annual budget of 200k in wages and salaries, 75k in materials, 30k in equipment, 20k in rented prop, 35k in capital. the firm earns 360k per ear. what is the economic profit
-90k
if the price of cell phones increases by 5% and the quanitity demanded falls by 2 percent, the absolute value of price elasticity of demand is
0.4
Suppose the quantity demanded of ski boats falls from 4.0 million to 3.0 million as a result of an average price increase from $20,000 to $25,000 per boat. The absolute value of the price elasticity of demand is closest to
1.29
in figure 24.2 , the profit maximizing monopolists will earn a profit per unit of
1.50
suppose the price of video games falls from 40 to 20 and as a result the quantity demanded of scooters falls from 40k to 10k per year. the value of the cross price elasticity of demand is
1.80
Refer to Figure 19.2. The total utility of two apples is
11 utils
In Table 19.3, what is the marginal utility of the fifth unit of cola
12
assume the price of cola is $8 per unit and the price of pretzels is $4 per unit. th marginal utility of the 5th cola is
12
the marginal physical product of the third unit of labor in figure 21.1 is
12 units per day
at 4 units of output in table 21.4, total fixed costs are
16
adam smith was alive during the ______, wrote_____, and his beliefs are generally associated with the _____ economic system
1700's, The wealth of nations, market capitalist
karl marx was alive during _______, wrote ____, and his beliefs are generally associated with the ____ economic systems
1800's, das kapital, command socialists
on the basis of your calculations in table 1.3, what is the opportunity cost of producing at point m rather than point n
2 brushes
at 20 units of output in Table 21.2, the average variable cost is
2.00 per unit
what is the marginal physical product of the fourth unit of labor in table 21.3
20
refer to the data in figure figure 22.1. the profit max output for this firm is approx.
200 units
if income falls 4 percent for a year and as a result the quantity of new homes demanded falls from 23 million to 20 million units
3.5
for product XYZ, the price elasticity of demand has an absolute value of 3.5. this means that quantitity demanded will increase by
3.5 percent for each 1 percent decrease in price
complete table 3.1. then answer the indicated question. Table 3.1 individual demand and supply, the equilibrium market quantity is
30
suppose thre are 3 firms in a market. 50 million and two firms have sells of 25 million find the Herfindahl hirschman index
3750
refer to figure 22.3 for a perfectly competitive firm. at a price of $23, total profits are max at an output of
39
the marginal utility per dollar for the third pretzel
4
in figure 24.2, the profit maximizing level of output is
4 units
refer to table 25.2 assume there re only 4 firms in the pool sweeper industry. what is the herfindahl-hirschman index for this industry?
4150
In the $160 to $180 price range in figure 20.1, the absolute value of the price elasticity of demand is closest to
5.7
refer to table 25.2. assume there are only four firms in he pool sweeper industry. what is the market share for north star
50 percent
refer to table 25.2. assume there are only four firms in the pool sweeper industry. what is the market share for the N star
50 percent
the marginal utility of the third unit is
6
refer to figure 19.2 total utility is maximized at
6 apples
If the price of the iPod falls by 3 percent and the price elasticity of demand for Ipods is 2.0
6 percent
suppose computer prices at an office supply store fall from 1000 to 900 and as a result the quantity demanded of type writers decrease from 40 to 20 per month. the cross price elasticity of demand is closest to
6.3
on the basis of your calculations in table 3.1, what is gained at producing at point L rather than point k
7 brushes
In Table 19.3, what is the total utility of two units of cola?
72
what is the total fixed cost in Figure 21.2
9,600
how many units of output can be produced when three units of labor are employed in Table 21.3
96
If bagels and doughnuts are substitutes, then a decrease in the price of doughnuts will result in
A decrease in the demand for bagels
refer to figure 1.7, the benefit of producing at point G rather than point D is
AB units of food
in figure 21.4 the long run average total cost curve is given by the curved line
ABFDGE
the marginal cost curve intersects the mnimum of the curve representing
ATC
in figure 24.1 total cost is represented by the area
CDFE
in figure 1.6, at which of the following points would the opportunity cost of producing one more car be the lowest
F
If the cross-price elasticity of demand for SUVs with respect to the price of gasoline is -.10
Fall by 1.8 percent
ceteris paribus, if income increase and as a result, the demand for good X increases and the demand for good Y falls
Good X is a normal good and good Y is an inferior good
Assume amanda always maximizes her total utility given her budget constraint.
It must be equal to 20 utils
refer to figure 21.3. the veritical differnce between the total cost curve and the total fixed cost curve represents
Total variable cost
Refer to Figure 21.3. The vertical difference between the total cost curve and the total fixed cost curve represents
Total variable costs
refer to figure 23.4 for a perfectly competitive market and firm. which of the following is likely to occur in the market in the long run
a decrease in supply
ceteris paribus, if the price of a digital camera rises, then we can expect
a decrease in the quantity demanded of digital cameras
which of the following is likely to be a monopolist
a drug firm that has a patent granting it the exclusive right to produce a drug
diminishing returns occurs because
a firm increases the amount of a variable input without changing a fixed input
the term market power refers to
a firms ability to alter the market price or quantity of a good or service
if demand is elastic then
a increase in price will reduce total revenue
which of the following is characteristic of a perfectly competitive market
a large number of firms
in a competitive market where firms are earning economic profits, which of the following should be expected as the industry moves to long run equilibrium
a lower price and more firms
which of the following is a barrier to entry in a monopoly market
a patent on a new product
the long run is
a period long enough for all inputs to be variables
a cartel is
a public agreement between firms or countries to restrict productions and raise prices
the production decision involves choosing
a rate of output and is a short run decision
when the demand for coffee increases, ceteris paribus, the equilibrium price will also increase because
a shortage exists at the old equilibrium price
in figure 21.4, the long run average total cost curve is given by the curved line segment
abfdge
adam weed is the owner/operator of a flower shop. last year he earned 250,000 in total revenue. his explicit were 175,000, 75,000. accounting and economic profit?
accounting proft=75,000 economic profit=0
to calculate market supple, we
add the quantities supplied for each individual supply schedule horizontally
if economic profits are earned in a competitive market, then over time
additional firms will enter the market
which of the following would most likely have a price elasticity coefficient greater than 1
airline travel in the long run
in terms of production possibilities curve, inefficiency is represented by
all points inside the curve
using figure 1.6, if an economy has the capacity to produce represented by PP1, then point E represents
an efficient use of resources
ceteris paribus, which of the following most likely to cause a decrease in the supply of skateboards
an increase in the cost of materials to produce the skateboards
externalities
are the costs or benefits of market activities activities that spill over onto third parties
in a market economy the people who receive the goods and services produced are those who
are willing and able to pay the market price
the law of diminishing marginal utility states that
as a consumer enjoys successive units of a good, eventually marginal utility will fall
on a demand curve, demand is more elastic
at higher prices
in figure 21.4 a firm that produces over 800 units of output should choose a plant with which short run average total cost function
atc 3 only
In figure 21.4, a firm that produces between 600 and 800 units per period should choose a plnt with a short fun average total cost function of
atc2 only
if the price of Coke rises by 5 percent and the sales of Pepsi go up by 10 percent, we can conclude that
both goods are substitute goods because the cross-price elasticity is +2
a monopolistic competitive fim can raise its price somewhat without fear of great change in unit sales because of
brand loyalty
the role of an entrepreneur in an economy is to
bring the factors of production together and assume the risk of production
refer to figure 23.2 for a perfectly competitive firm. the firm will max profit by producing the level of output that corresponds to point
c
refer to figure 23.2 for a perfectly competitive firm. this firm will max profits by producing the level of output that corresponds to point
c
refer to figure 1.7. if this economy is currently producing at point F, then by employing more resources this economy
can move to points D,G, or J
which of the following is most likely a private good
cars
in figure 24.2, total profit at the profit max rate of output is
cdhg
a monopoly
charges higher prices than competitive firms
before it political collapse, the former soviet union aspired to have an
command socialist economy
the marginal revenue of a monopolists falls below price because the firm
confront a downward sloping demand curve
the marginal revenue of a monopolist falls below price because the firm
confronts a downward sloping demand curve
the benefit that consumers get when they buy goods at the equilibrium price but were willing to pay more is called
consumer surplus
in a market economy, producers the goods and services that
consumers demand
high profits in a particular industry indicate that
consumers want more of that industry's goods
when economic profits exist in the market for a particular product, this is a signal to producers that
consumers would like more scarce resources devoted to the production of this product
in making a production decision, an entrepreneur
decides what level of output will maximizes profits
the average fixed cost (AFC) curve
declines as long as output increases
assume the price elasticity of demand for a us frisbee is .5. if the company increases the price of each frisbee from 12-16, the number of frisbees demanded will
decrease by 14.3 percent
in a competitive market, if the market price is equal to the min point of the firms atc curve, the firm may seek to earn economic profit by
decreasing production costs through technological improvements
in a competitive market, if the market price is equal to the minimum point of the firms atc curve, the firm may seek to earn economic profits by
decreasing production costs through technological improvements
if corn products are found to cause cancer, the the
demand curve for corn will shift left
when the percentage change in quantity demanded is less than the percentage change in price, ceteris paribus
demand is inelastic
when technology improves, the firms marginal cost curve shifts
downward, and supply increases
accounting cost and economic costs differ because
economic costs include the opporunity costs of all resources used, while accounting costs include the actual dollar outlays
refer to figure 22.3 for a perfectly competitive firm. if the market price is $15,
economic profits will be 0
refer to figure 22.3 for a perfectly competitive firm. if the market price is $15
economic profits will be zero
refer to figure 23.2 for a perfectly competitive firm. given the current market price of 100. we expect to see
entry into this industry
which of the following is an investment decision in a competitive market
entry or exit
the demand curve confronting a competitive firm
equals the marginal revenue curve
if long run economic loses are being experienced in a competitive market
equilibrium price will rise as firms exit
complete table 3.1, if the price is $2, the market will
experience a shortage of 22 units
if the opportunity cost of manufacturing machinery is higher in the united states than in britain and the opportunity cost of manufacturing sweaters is lower in the united states than in britain, then the united states will
export sweaters to britain and import machinery from britain
a monopolist has market power because it
faces a downward sloping demand curve for its own output
if the cross price elasticity of demand for SUV'S with the respect to the price of gasoline is .10 and gas prices rise by 18%
fall by 1.8 percent
suppose the income elasticity of demand for jet skis is 3.5. if the level of income decreases by 1%, the number of jet skis sold will
fall by 3.5 percent
sams surf shop has total costs of 2000 when it is not producing any surfboards. this means that
fixed costs are 2000
a ushaped average total cost curve implies
fixed marginal cost below average total cost, and then marginal cost above the average total cost
Refer to Table 19.3. If Michael has $48 to spend on cola and pretzels, what combination should he purchase in order to maximize his utility.
four colas and four pretzels
complete table 19.3 below. assume the price of cola is $8 per unit and the price of pretzels is $4 per unit. if micheal has $48 to spend on cola and pretzels
four colas and four pretzels
which of the following is most likely an inferior good
generic canned food
which is most likely an inferior good
generic canned foods
when an economy is producing efficiently, it is
getting the maximum goods and services possible from the available resources
if a firm can change market prices by altering its output, then it
has market power
when a producer can control the market price for the good it sells, the producer
has market power
price leadership
helps achieve monopoly for the market
the demand curve for each competitively firm is
horizontal
the demand curve for each perfectly competitive firm is
horizontal
a production function shows
how a firm's production changes as quantity of labor and other inputs change
price elasticity looks at
how much quantity demanded changes after a change in price
elasticity of supply tells us
how much sellers will increase production in response to a change in price
cross price elasticity refers to
how responsive consumers of one good are to a change in the price of another good
which of the following statements best captures the concept of consumer surplus
i was willing to pay $30 for roses, but i bought them for $20
which of the following is characteristic of a perfectly competitive market
identical products
according to the law of increasing opportunity costs
in order to produce additional units of a particular good, it is necessary for society to sacrifice increasingly larger amounts of alternative goods
price leadership is a method by which oligopolies can
increase prices without explicit price fixing
the exit of firms from a market
increase the equilibrium price in the market
If Carmen's Coffee Company wants to increase total revenue and the price elasticity of demand is 0.43, the company should
increase the price of its coffee
when income falls the demand for an inferior good
increases
as more satisfaction is achieved from consuming a good with diminishing marginal utility then total utility
increases at a decreasing rate
Assume a good has a downward sloping, linear demand curve. Starting at a price of zero, as the price of the good increases, total revenue
increases, then decreases
the federal govenments role in providing aid to the poor and the aged is justified because of concerns about
inequity
the decision to start or expand a business is known as
investment decision
profit
is the difference between total revenue and total cost
the marginal cost curve
is the short run supply curve for a competitive firm at prices above the avc curve
assume amanda always maximizes her total utility given her budget constraint. every morning for breakfast she has 2 eggs and 3 sausages. if the marginal utility of the last 10 eggs is 10 utils and the price of eggs is $1 each, what can we say about the MU of the last sausage if the price of each sausage if the price of each is $2
it must be equal to 20 utils
in the short run, which of the following is most likely a variable cost
labor and raw materials
the additional pleasure or satisfaction from a good declines as more of it is consumed in a given period
law of diminishing marginal utility
the shape of the marginal cost curve reflects the
law of diminishing returns
market failure implies that market mechanism
leads the economy to the wrong mix of output
which of the following characterizes monopolistic competition
many firms produce a particular type of product , but each maintains some independent control over its own price
the average total cost curve will be negatively sloped so long as
marginal cost is less than average total cost
if the marginal physical product (MPP) is falling, then the
marginal cost of each unit of output is rising
if the marginal physical product is falling then the
marginal cost of each unit of output is rising
ceteris paribus, the law of diminishing returns states that beyond some point, the
marginal physical product of a factor of production diminishes as more of that factor is used
short run profits are maximized at the rate of output where
marginal revenue is equal to marginal cost
total utility is maximized when
marginal utility = 0
maximum utility is achieved when
marginal utility is zero
social demand is equal to
market demand plus or minus externalities
people benefit by participating in the market because
market participation allows individuals to specialize and, with trade, ultimately consume more
a production function shows the
max output that can be produced with varying combinations of factor inputs
which of the following products will have more inelastic demand
medicine
which of the following market structures will have higher prices in the long run than perfect competition
monopolistic competition, monopoly, and oligopoly
in which of the following types of market does a single firm have the most market power
monopoly
which of the following events would allow the production possibilities curve to shift outward
more teenagers enter the labor force
a profit maximizing monopolist will earn a rate of output where
mr=mc and determines the price based on the demand curve
which of the following is purchased in a factor market
national defense
mp3 players and mp3 files are complimentary goods. the cross price elasticity of demand between mp3 players and mp3 files is expected to be
negative
which determinant of demand changes in the personal computer market as more individuals become interested in surfing the internet
number of buyers
which market structure is characterized by a few interdependent firms
oligopoly
the concentration ratio for an oligopoly is
over 60 percent
a firm should shut down production when
p<minimum avc
in which of the following cases would entry and exit cease
p=long run atc
if a firm decided to make the investment decision to expand its capacity then it must have discovered
p>atc
a perfectly competitive firm should expand output when
p>mc
examples of barriers to entry include
patents
which of the dollowing characterizes a firm that is in long run perfectly competitive equilibrium where profits are maximized
price equals minimum ATC
a catfish farmer will shutdown production when
price falls below avc
a perfectly competitive market results in efficiency because
price is driven down to the minimum atc
a ballet performance had empty seats. this implies that the
price of the tickets must have been above the equilibrium price
a kinked demand curve indicates that rival oligopolists match all
price reductions
an economy is said to have a comparative advantage in the production of a good if it can
produce the good at a lower opportunity cost than another economy
a monopoly
produces less output than a competitive industry
when a business firm advertises that its product has unique features that make it superior to other similar products, is is engaging in
product differentiation
oligopolists have a mutual interest in coordinating production decisions in order to max joint
profits
economists assume the principle motivation of producers is
proft
govenments usually build highways because it is difficult to exclude individuals who don't pay for the highways from using them. what type of market failure involved
public goods
which of the following explains what would happen if public goods were marketed like private goods
public goods would be underproduced
the four specific sources of market failure are
public goods, market power, externalities, and inequity
If dvd players and dvds are complementary goods, an increase in the price of dvds will, ceteris paribus
reduce the demand for dvd players
the entry of firms into a market
reduces the profit of existing firms in the market
the entry of firms into a market
reduces the profits of existing firms in the market
price elasticity of demand shows how
responsive the quantity demanded is to a change in price
the demand for normal goods
rises when income falls
utility refers to the
satisfaction obtained from a good or service
car dealers can easily price discriminate because
sellers negotiate a separate price agreement with each individual buyer
other things being equal, as more firms enter a market, the market supply curve
shifts to the right
suppose a hurricane hits florida, causing widespread damage to houses and businesses. the governor of florida place ceilings on all building materials to keep the prices reasonable. which of the following is most likely the result
shortages of building materials and a slower recovery from the storm
The marginal physical product of labor in Figure 21.1 is negative for the
sixth worker
in economics, scarcity means that
society's exceed resources available
to determine the market supply the quanitities
supplied at each price by each supplier are added together
economic loses are signals to producers
that they are not using resources in the best way
which of the following is not a factor of production
the 100,000 cash
the opportunity cost for studying for an economic test is
the activity that is best alternative use of your time
the total consumer surplus is shown on a graph as
the area under the demand curve and above the actual price
consumer surplus measures
the difference bt the max price a consumer is willing to pay, and what is actually paid
which of the following is an example of progressive tax
the federal income tax
refer to figure 22.3 for a perfectly competitive firm. which of the following statements is true for this firm between prices 10 and 15
the firm is experiencing economic loses but should continue to produce
refer to figure 23.4, for a perfectly competitive market and firm. which of the following is most likely to occur?
the firm will exit in the long run
Refer to Figure 19.2. Diminishing marginal utility begins after
the first apple
which of the following produces externals benefits
the inoculation of college students against the flu
Jose goes to an all you can eat buffet at a Chinese restaurant
the marginal utility of the fourth plate would be zero or even negative
if someone invents a better way to produce frozen pizza then
the market supply curve for frozen pizza will shift to the right
refer to figure 23.2 for a perfectly competitive firm. if this firm produces the level of output corresponding to point c in the shortrun will earn
the max profit possible
if the demand for a product is elastic, then
the percentage change in the quantity demanded is greater than the percentage in price
a perfectly competitive firm is a price taker because
the price of the product is determined by many buyers and sellers
which of the following is most likely a fixed cost
the rent for a factory
total utility is
the sum of the marginal utilities from the consumption of a good
the principle mechanism for redistributing income is
the tax and transfer system
which unit of labor do diminishing marginal return first appear in table 21.1
the third
the term market mechanism refers to:
the use of market prices and sales to determine resource allocation
monopolistic competition results in
the wrong mix of output
if the actual market price were fixed at $6 per unit in figure 3.2,
there would be a shortage of 20 units
if the actual market price were fixed at $15 per unit in figure 3.2
there would be a surplus of 40 units
when sellers price discriminate
they are attempting to charge a price that is the max price each individual is willing to pay
when sellers price discriminate
they are attempting to charge a price that is the maximum price each individual is willing to pay
in figure 21.1, diminishing marginal returns first occur with the
third worker
if the price is reduced from 100 to 80 in figure 20.1
total revenue will decrease
if marginal utility is negative
total utility will decrease with additional consumption
if marginal utility is negative, then
total utility will decrease with additional consumption
which of the following is the best example of a government effort to address market failure in relation to the for whom question
transfer payments
a demand curve that is perfectly inelastic is
vertical
which of the following a production decision
whether to increase or decrease output
in a perfectly competitive industry, economic profit
will approach zero in the long run as prices are driven to the level of average production costs
which of the following is characteristic of a perfectly competitive market
zero economic profit in the long run
