Econ Final

When a minimum wage is in​ place, scarce jobs are allocated by​ _______.

a method other than market​ price, such as personal​ characteristics, first-come​ first-served, or discrimination

The closer the substitutes for a good or​ service, the more​ ______ is demand. The greater the proportion of income spent on a​ good, the more​ ______ is demand.

elastic; elastic

The water supplier in your town is an example of​ _______.

A monopoly

Which of the following is an example of a price ceiling or price cap​?

A regulation requires cable service to be provided for no more than​ $30 a month.

Choose the statement about monopoly that is incorrect. A.Local water supplier is a monopoly. B.A monopoly produces more than the efficient quantity and charges too high a price. C.A monopoly sets its price to achieve its​ self-interest. D.A monopoly is a firm that is the sole provider of a good or service.

C

Production efficiency is a situation in which the economy is getting all that it can from its resources and​ _____ produce more of one good or service without producing​ _____ of something else.

Cannot; less

​Lin's makes fortune cookies. Anyone can make and sell fortune​ cookies, so there are dozens of producers. All fortune cookies are the same and buyers and sellers know this fact. Lin's fortune cookies operates in a​ ______ market. The price of a fortune cookie is determined by​ ______. Lin's marginal revenue from a fortune cookie equals​ ______.

Competitive market demand and market​ supply; price

​______ are features of a​ firm's technology that lead to rising​ long-run average cost as output increases.

Diseconomies of scale

On a Ford assembly​ line, the cost of producing a car falls as output increases. Given this​ information, we know that for​ Ford, ______ exist.

Economies of scale

​______ are features of a​ firm's technology that lead to falling​ long-run average cost as output increases.

Economies of scale

T or F: the marginal cost curve intersects the average fixed cost curve at its minimum?

False

T or F:when marginal cost is greater than average cost, average cost is increased?

False

When a firm price​ discriminates, it is doing its customers a favor.

False

Which of the following is an example of a ​price-discrimination​?

IMAX charges $6 per movie ticket for children younger than 8, and $8.50 per movie ticket for adults

When Mohesha receives an increase in her pay check from​ $1,800 a month to​ $2,200 a​ month, she increases the quantity of hot chocolate that she buys from 19 cups a month to 21 cups a month. ​ Mohesha's demand for hot chocolate is income​ ______. For​ Mohesha, hot chocolate is​ ______ good.

Inelastic; a normal

Which of the following illustrates economies of scale​? ​Liza's average total cost changes from​ $4.50 to​ $2.20 when she increases salad production from 7 to 9 an hour. ​Sam's average total cost changes from​ $1.30 to​ $2.80 when he increases smoothie production from 5 to 8 gallons an hour. ​Tina's average total cost remains at​ $3 when she increases pizza production from 12 to 13 an hour.

Liza faces economies of scale

Goods and services that use rare resources in their production have a​ ______ elasticity of supply. The greater the amount of time available after a price​ change, the​ ______ is the elasticity of supply.

Low; greater

​_______ arises when there is one​ firm, which produces a good or service that has no close substitutes and in which the firm is protected by a barrier preventing the entry of new firms.

Monopoly

Ski trips and ski jackets are complements. The cross elasticity of demand for ski trips with respect to the price of a ski jacket is​ _______.

Negative

Are changes in preferences and obstacle or not?

Not

Are taxes and subsidies an obstacle or not?

Obstacle

Which of the following is an example of regulation​?

The Surface Transportation Board influences the prices on interstate railroads.

T or F: The marginal cost curve intersects the average variable cost curve at its minimum?

True

Suppose that in​ 2014, tomato growers in Florida lobby the U.S. government to impose an import quota on Mexican tomatoes. ​ ______ gain and ​ ______ lose.

U.S. growers of​ tomatoes; U.S. consumers of tomatoes and society

Which of the following is an example of price elasticity of demand​?

When the price of bananas increased by 5 percent and nothing else​ changed, the quantity of bananas demanded decreased by 2 percent.

Demand is elastic if?

a price cut increases total revenue

Demand is inelastic if?

a price rise increases total revenue

Is high transaction cost an obstacle or not an obstacle?

an obstacle

The​ long-run average cost curve traces out the lowest attainable​ _______ of producing each output.

average total cost

A firm experiences constant returns to scale when ​ _______.

average total cost does not change when output changes

What is an incorrect statement: A.A firm practices price discrimination to maximize profit. B.A monopoly faces a market constraint because to sell a larger​ quantity, it must set a lower price. C.A firm that practices price discrimination is a monopoly. D.A firm practices price discrimination when it sells different units of a good or service for different prices.

c

Producer surplus is​ ______.

calculated as the price received for a good minus its minimum supply price, summed over the quantity sold

The production possibilities frontier is the boundary between the combinations of goods and services that​ _____, given the available factors of production and the state of technology.

can be produced and the combinations that cannot be produced

Perfect price discrimination is the price discrimination that extracts the entire​ _____ surplus by charging the​ _____ price that​ _____ are willing to​ _____ for each unit.

consumer; highest; consumers; pay

A minimum wage set above the equilibrium wage rate​ ______

creates unemployment

The tools that a country can use to restrict international trade include all of the following except​ _______.

deadweight loss

With competitive rent​ seeking, a​ single-price monopoly's​ _______.

deadweight loss increases

Marginal cost______?

decreases at low outputs and increases at high inputs

Diminishing returns to capital ___ occur as the quantity of capital increases because for a given quantity of ____ each additional unit of ____ will result in _____ incremental amounts of output.

do; labor; capital; smaller

Workers at​ Sue's Surfboards negotiate a wage increase of​ $100 a week for each worker. If other things remain the​ same, Sue's average fixed cost curve​ ______ and the average variable cost curve​ ______. If other things remain the​ same, Sue's average total cost curve​ ______, and the marginal cost curve​ ______.

does not​ change; shifts upward shifts​ upward; shifts upward

If diseconomies of scale are present and the firm​ ______ all its​ inputs, its output​ _______.

doubles; less than doubles

A firm that can use​ cost-saving equipment and highly specialized labor as the scale of production increases experiences​ _______.

economies of scale

The marginal cost curve slopes downward at low outputs because of​ _______.

greater specialization and division of labor

A firm in perfect competition is a price taker because​ _______.

it produces a tiny proportion of the total output of a particular good and buyers are well informed about the prices of other firms

The demand for a necessity is income​ ______ and the demand for a luxury is income​ ______.

inelastic; elastic

Economic profit​ _______.

is equal to total revenue minus the opportunity cost of production

Consumer surplus is​ _______.

measured as the marginal benefit​ (or value) of a good minus the price paid for​ it, summed over the quantity bought

Maximum MP occurs at the same output as​ ______. Maximum AP occurs at the same output as​ ______.

minimum MC​; minimum AVC

The smallest quantity of output at which​ long-run average cost reaches its lowest level is the​ firm's _______.

minimum efficient scale

A​ single-price monopoly is a firm that​ ______ each unit of its output​ ______.

must​ sell; for the same price to all its customers

Monopoly is a market in which one firm sells a good or service that has​ _____ substitutes and​ _____ blocks the entry of new firms.

no close; a barrier

is a technological advance an obstacle or not an obstacle?

not an obstacle

A monopoly arises when a firm produces a good or service for which​ _______ substitutes​ exist, and the firm​ _______.

no​ close; is protected by a barrier that prevents other firms from selling that good or service

is a monopoly an obstacle or not?

obstacle

A minimum wage is unfair because​ _______.

only those people who have jobs and keep them benefit from the minimum​ wage, and a minimum wage blocks voluntary exchange

What are true statements about opportunity cost?

opportunity cost is a ratio and opportunity cost of a good is the decrease in the quantity produced of one good divided by the increase in the quantity produced of another good as we move along the PPF .produced of another good as we move along the PPF.

The price elasticity of demand is calculated by dividing the​ _______ by the​ _______ .

percentage change in the quantity​ demanded; percentage change in the price

A minimum wage is a​ _______ applied to labor markets.

price floor

A​ firm's production function shows the relationship between the maximum output attainable and the​ ______.

quantities of both labor and capital

In a perfectly competitive​ market, the market demand is​ _______ and the demand faced by the individual firm is​ _______.

shown by a​ downward-sloping curve; perfectly elastic

When economies of scale are​ present, the LRAC curve​ ______. When diseconomies of scale are​ present, the LRAC curve​ ______.

slopes​ downward; slopes upward

The quantity supplied of a good or service is​ ______.

the amount producers plan to sell during a given time period at a particular price

A tax is inefficient for all of the following reasons except​ _______.

the burden of the tax falls entirely on​ buyers, so buyers purchase a smaller quantity

The marginal product of capital is equal to​ ______.

the change in total product divided by the change in capital when the quantity of labor is constant

A​ firm's opportunity cost includes​ _______.

the cost of using resources bought in the market, owned by the firm and supplied by the firms owner

The marginal cost curve eventually slopes upward because of​ _______.

the law of diminishing returns

If a​ consumer's income increases and if all goods are normal​ goods, ______.

the quantity bought of each good increases

The price elasticity of demand is a​ units-free measure of the responsiveness of​ ______.

the quantity demanded of a good to a change in its price when all other influences on buying plans remain the same

the quantity of bottled water that firms plan to sell this month depends on all of the following except ______ because_____?

the quantity of bottled water that consumers plan to buy this month; a change in the quantity of bottled water that consumers plan to buy this month changes the quantity supplied

Along the total product​ curve, output increases as​ _______.

the quantity of labor increases and the plant size remains constant

The quantity of rubber ballsrubber balls that firms plan to sell this month depends on all of the following except​ _______ because​ ______.

the quantity of rubber ballsrubber balls that consumers plan to buy this​ month; a change in the quantity of rubber ballsrubber balls that consumers plan to buy this month changes the quantity supplied

Which of the following is the opportunity cost of attending a ball​ game?

the things you would have bought with what you spent on the ticket and bus fare getting to the game plus the things you would have alternatively done with your time

T or F: When marginal cost is less than average total cost, average total cost is decreased?

true

Because elasticity is a​ units-free measure of the responsiveness of the quantity demanded of a good or service to a change in its​ price, _______.

we can compare the responsiveness of the same good when quantity is measured in different​ units, or we can compare across different goods

To maximize​ profit, a firm in perfect competition must decide all of the following except​ _______.

what price to charge

A consumer equilibrium is a situation in which a consumer has allocated​ _____ of her income in a way that​ _____.

​all; maximizes her total utility

The fewer the substitutes for a good or​ service, the more​ ______ is the demand for it. The smaller the proportion of income spent on a​ good, the more​ ______ is the demand for it.

​inelastic; inelastic

Sarah maximizes her total utility when she spends all her available income such that the​ ______ utility per dollar is​ _______ for all goods.

​marginal; equal

A​ ______ monopoly sells different units of a good or service for different prices.

​price-discriminating

The production possibilities frontier is the boundary between those combinations of goods and services that can be​ _____ and those that​ ______.

​produced; cannot be produced

When the marginal product curve is​ ______, the marginal cost curve is falling. When the average product curve is​ ______, the average variable cost curve is falling.

​rising; rising

The​ long-run average cost curve is made up of the segments of individual average​ ______ cost curves with the lowest average​ ______ cost for a given output.

​total; total

The​ long-run average cost curve is the relationship between the lowest attainable average total cost and​ output, when plant size is​ ______ and labor is​ ______.

​varied; varied