Econ Final
marginal revenue is equal to marginal cost
A profit-maximizing monopolist will produce the level of output at which
240
Figure 15-7. At the profit-maximizing output and price, how much total revenue would the monopolist earn?
12
Figure 15-7. In order to maximize profits, the monopolist should produce output of
20
Figure 15-7. In order to maximize profits, the monopolist would need to set what price?
$500
Figure 15-9. The deadweight loss caused by a profit-maximizing monopoly amounts to
Panel B
Figure 16-1. Which of the graphs illustrates the demand curve most likely faced by a firm in a monopolistically competitive market?
140
Figure 16-10. In order to maximize its profit, the firm will set what price?
140
Figure 16-9. In order to maximize its profit, what price will the monopolistically competitive firm set?
6 units
Figure 4-13. If producer A and producer B are the only producers in the market, then the market quantity supplies when the price is $2 is
improvements in production technology
Figure 4-16. The shift to the right from S to S' could be caused by
shortage of 1 unit
Figure 4-21. At a price of $8 there is approximately a
11 units
Figure 4-3. If these are the only two consumers in the market, then the market quantity demanded at a price of $9 is
demand when the price of a substitute good falls
Figure 4-9. The movement shown in the figure is consistent with which of the following events
AB
Figure 5-15. Along which of these segments of the supply curve is supply more elastic
$14
Figure 6-18. The amount of tax per unit is
$10
Figure 6-18. The price that sellers receive after the tax is imposed is
causes a shortage
Figure 6-2. The price ceiling
$5.00
Figure 6-22. The price paid by buyers after the tax is imposed is
when the price is $12, there is a shortage of 4 units
Figure 6-4. Which of the following statements is not correct?
a surplus of 45 units of the good
Figure 6-8. If the government imposes a price floor of $7 on this market, then there will be
$400
Figure 7-6. At the equilibrium price, producer surplus is
area B+D
Figure 9-1. When trade in coffee is allowed, consumer surplus in Guatemala decreased by
E
Figure 9-16. Government revenue is raised by the tariff is represented by the are
$150
Figure 9-19. When international trade is allowed, domestic producer surplus decreases by
$405
Figure 9-19. With international trade, domestic consumer surplus is
$25
Marcus sells 300 candy bars at $0.50 each. His total costs are $125. His profits are
each of the sellers offers a somewhat different product
Monopolistic competition differs from perfect competition because in monopolistically competitive markets
quantity supplied of the good increases
Other things equal, when the price of a good increases, the
first degree price discrimination
Perfect price discrimination is also known as
increases total profit for the firms
Price discirmination
W
Figure 15-6. To maximize profits, what output should the monopolist produce?
A stays in business, B sells
Table 17-24. What is the Nash equilibrium?
only when the market is a monopoly
A firm can earn profits in the long run
false
A nash equilibrium always results in the highest total profit for the firms in an oligopoly market
how a firm turns inputs into outputs
A production function describes
the equilibrium price would increase, and the equilibrium quantity would decrease
Africa is where most of the world's cocoa is grown, meaning what will happen to the equilibrium price and quantity of cocoa?
supply curve to the left
An increase in production input prices will shift the
positive, and the good is a normal good
Assume that a 5 percent increase in income results in a 3 percent increase in the quantity demanded of a good. The income elasticity of demand for the good is
both of the above are true
Assume that the market starts in equilibrium at point W in panel (b). An increase in demand from D0 to D1 will result in
exactly equals the quantity that sellers are willing and able to sell
At the equilibrium price, the quantity of the good that buyers are willing and able to buy
thinking ahead and reasoning back
Backwards induction involves
P5
Figure 15-4. Profit will be maximized by charging a price equal to
advertising
Compared to other firms, firms that sell highly differentiated products likely incur significant cost associated with
an increase in the demand curve
Comparing sessions 2 and 3, we see a change in the average price and quantity sold that is consistent with
168
Consider the information in Table 2. What is the value of A?
24
Consider the information in Table 3. What is the value of D?
65
Consider the information in the Table 1. What is the value of V?
the quantity demanded of one good changes in response to a change in the price of another good
Cross-pirce elasticity of demand measures how
2.5
Figure 12-5. Using the midpoint method, the price elasticity of demand between point X and point Y is
ABE
Figure 15-17. Which of the following areas represents the consumer surplus from this profit maximizing monopolist?
BCFE
Figure 15-17. Which of the following areas represents the profit earned by this profit-maximizing monopolist?
15,000
How much additional profit can the airline earn by charging each customer their willingness to pay relative to charging a flat price of $600 per ticket?
55,000
How much profit will the airline earn if it engages in price discrimination?
25,000
How much profit will the airline earn if it sets the price of each ticket at $300?
40,000
How much profit will the airline earn if it sets the price of each ticket at $600?
variable cost
If a firm produces nothing, which of the following costs will be zero?
a decrease in the price of bananas
If bananas and vanilla wafers are complements, then which of the following would increase the demand curve for vanilla wafers
Increasing production output
If marginal revenue is greater than marginal cost, then firms would make greater profits by
increase in the demand for e-books
If paperback books and e-books are substitutes, a higher price for paperback books would result in a(n)
330
If the law of demand applies to this good then Q could be
150
If the law of supply applies to this good, thenQ could be
new firms will enter the industry
If the market price is above $4.50, what will happen in the long run?
90 percent decrease in the quantity demanded
If the price elasticity of demand for a good is 9.0, then a 10 percent increase in price results in a
nothing. the price is consistent with zero total profits, so there is no incentive for firms to enter or exit the industry
If the price is $4.50 in the short run, what will happen in the long run?
ii, and ii only
In which of the following market structures does free entry and exit play an important role in the long-run equilibrium outcome?
competitve
In which type of market is price always equal to a firms marginal revenue?
selling the pink scooter to girls for twice the price it sells an identical red scooter for boys
Radio Flyer price discrimination
137
Refer to the table above. What is the value of D?
a complement for eating more cookies
Research shown in class indicates that drinking vodka acts as a
goods X and Y are substitutes with a cross-price elasticity of 2.0
Suppose a 10% decrease in price of good X causes the quantity demand of good X to increase by 90%, and the quantity demanded of good Y to decrease by 20%. If all else is constant, which of the following would be true?
remain unchanged
Suppose a firm in a competitive market reduces its output by 20 percent. As a result, the price of its output is likely to
elastic and equal to 12.00
Suppose that quantity demanded falls by 60% as a result of a 5% increase in price. The price elasticity of demand for this good is
$5
Table 14-4. For this firm, the marginal revenue is
12 units of output for firm A and 12 units of output for firm B
Table 17-18. The Nash equilibrium for this game is
2
Table 17-21. How many Nash equilibria are there in this chicken game?
both firms will break the agreement and choose to advertise
Table 17-23. If the firms reach the nash equilibrium
inelastic demand
The deadweight loss from a tax will be smallest in a market with
deadweight loss
The economic inefficiency of a monopolist can be measured by the
sherman act
The first major piece of antitrust legislation was the
deadweight loss
The loss in total surplus resulting from a tax is called
false
The market for apples is most likely considered a monopolistically competitive market
increases the demand for the other good
Two goods are complements when a decrease in the price of one good
choose b and get 5
Using the game tree below, what is Minerva's best response if Albus chooses S?
firm 1 chooses to enter, and the monopoly chooses to accomodate
Using the game tree below, what is the nash equilibrium?
60 units
Using the table below, assume there are only four sellers in the market. If the price is $10, then the market quantity supplied is
7 units
Using the table below, suppose the market consists of michelle, laura, and hillary. If the price falls by $1, then the quantity demanded in the market would increase by
$8 and 30 units
Using the table below, the equilibrium price and quantity, respectively, are
falls more heavily on consumers when demand is inelastic
When a good is taxed, the burden of the tax
a firm will have chosen its best strategy, given the strategies chosen by other firms in the market
When an oligopoly market reaches a nash equilibrium
$25,750
When the price of the good is $175, the firm's total profit is
MR=MC and demand = ATC
Which of the following conditions is characteristic of a monopolistically competitive firm in the long-run equilibrium?
1.7
Which of the following could be the cross-price elasticity of demand for two goods that are substitutes?
firms have difficulty entering the market
Which of the following is NOT a characteristic of a perfectly competitive market?
i,ii,iii
Which of the following is an example of a barrier to entry
production technology
Which of the following is not a determinant of the demand for a particular good
An ice cream parlor charges a higher price for ice cream than for sherbet
Which of the following is not an example of price discrimination?
Monopolistic competition is similar to monopoly because both market structures are characterized by firms being price makers rather than price takers
Which of the following statements is correct?
$100
Which price corresponds to the firm earning zero total profits?
less than 1
demand is inelastic if the price elasticity of demand is
inferior good
if the demand for a good rises when income falls, then the good is called a(n)