Econ Final
The above figure shows the costs at Barney's Bagel Bakery. If the price of flour increases, the change in costs would be best represented by:
A vertical shift in ATC, AVC and MC
The major distinguishing characteristic of oligopoly is that
Firms are interdependent
The Supply Room, a mail-order school supply store, grew rapidly. As a result of achieving a much larger size, the Supply Room is able to realize (1) volume discounts when buying from its suppliers, and (2) lower transportation costs by shipping in bulk. The best explanation of this is that the Supply Room seems to be experiencing
Increasing returns to scale
The profit-maximizing level for all firms, regardless of industry structure, is the output level where
MC = MR.
Suppose that consumption of oat bran is found to reduce cholesterol and improve health. The result is that:
The demand for oat bran increases. the demand for oat bran decreases.
according to the theory of comparative advantage, specialization and free trade will benefit
all trading parties, even when some are absolutely more efficient producers than others
According to the theory of comparative advantage, specialization and free trade will benefit
all trading parties, even when some are absolutely more efficient producers than others.
Which of the following would be most likely to cause the demand for macaroni and cheese to shift from D0to D1?
an increase in income, assuming macaroni and cheese is a normal good
Which of the following would an economist classify as capital?
an oven used by a baker
At the point where marginal cost equals average total cost, average total cost will be
at its minimum.
Of the following, ________ is the best example of an oligopolistic industry.
automobiles production
If marginal cost is greater than average total cost, then
average total cost is increasing
The marginal cost curve intersects the ________ at its minimum.
average variable cost curve average total cost curve
If marginal cost is above average variable cost, then
average variable cost is increasing.
Economic growth occurs when
both a society acquires new resources and a society learns to produce more using existing resources.
If an economy begins to use its resources more efficiently, it will move
closer to its ppf.
Industries in which firms are suffering losses are likely to ________ in the long run.
contract
as output increases, average fixed costs
decrease
Strawberries are produced in a perfectly competitive market. Average consumer incomes decrease. This will cause the individual strawberry farmer's marginal revenue to ________ and their profit maximizing level of output to ________.
decrease; decrease
The price elasticity of demand for bottled water in Texas is -2, and the price elasticity of demand for bottled water in California is -0.5. In other words, demand in Texas is ________, and demand in California is ________.
elastic; inelastic
Marginal cost is ________ average variable cost when ________.
equal to; average variable cost is minimized.
Average fixed costs
fall as output rises
Total revenue decreases if price ________ and demand is ________.
falls; inelastic
Unlike a monopolistic firm's product, a monopolistically competitive firm's product
has too many close subs
At a price of $11, quantity demanded is 90; and at a price of $10, quantity demanded is 100. Since total revenue ________ by the price decrease, demand must be ________.
is increased; elastic
The pizza delivery industry is monopolistically competitive. Little Joe's Pizzeria raises its prices by 10%, but all the other pizzerias in town keep their prices the same. Which of the following is most likely to occur?
little joe's pizzeria will lose some of its customers
In the long run, a monopoly
may earn positive economic profits due to entry barriers
The marginal cost curve intersects the average variable cost curve at its ___
minimum
An increase in quantity supplied is represented by a movement from
movement along the supply
An Decrease in quantity supplied is represented by a movement from
movement down the supply line
the long run is the period of time in which the quantities ___
of ALL factors of production are VARIED
The short run is the time frame in which quantities ___
of SOME factors of production are FIXED
A form of industry structure characterized by a few firms each large enough to influence market price is
oligopoly
Using the midpoint formula, if the price of a gardenburger is decreased from $7 to $6, the price elasticity of demand equals ________, and the decrease results in a(n) ________ in total revenue.
price of elasticity -1.44 increase in total revenue
An improvement in technology will cause the
production possibility frontier to shift outward.
During the Iraq War, many of Iraq's oil refineries were destroyed. This would best be represented by a
shift of Iraq's production possibility frontier toward the origin.
The United States has a comparative advantage in the production of wheat, and Haiti has a comparative advantage in the production of sugar. If both countries specialize based on the theory of comparative advantage,
the production and consumption of both goods will increase.
If a firm is producing where MR > MC,
the revenue gained by producing one more unit of output exceeds the cost incurred by doing so
if a firm is producing where MR>MC
the revenue gained by producing one more unit of output exceeds the cost incurred by doing so
When Hurricane Andrew passed through Louisiana in the summer of 1992, approximately a quarter of the sugar cane crop was destroyed. Ceteris paribus,
the supply of sugar decreased, and the price of sugar increased.
f the price of a hamburger is increased from $2 to $4, the price elasticity of demand equals ________. Use the midpoint formula.
-0.33
If the price of a hamburger is increased from $6 to $8, the price elasticity of demand equals ________. Use the midpoint formula.
-1.4
If the price of a gardenburger is increased from $6 to $8, the price elasticity of demand equals ________ and demand is ________.
-1.75 elastic
Stereo Sound Unlimited has a monopoly over the installation of surround sound systems. If Stereo Sound Unlimited's total revenue from installing 10 sound systems is $20,000 and its total revenue from installing 11 sound systems is $18,000, what is the marginal revenue of the eleventh sound system?
-2000
If the price of a hamburger is increased from $8 to $10, the price elasticity of demand equals ________. Use the midpoint formula.
-3.0
If a firm's total costs are $80 when 10 units of output are produced and $90 when 11 units of output are produced, the marginal cost of the 11th unit is
10 dollars
If a firm's total costs are $80 when 10 units of output are produced and $90 when 11 units of output are produced, the marginal cost of the 11th unit is
10$
If the most someone is willing to pay for ticket to see their favorite team is $100 and the market price of the ticket is $35, then this buyer will get consumer surplus of
65
In the short run a firm's lowest cost level of output is the minimum point on its ________ cost curve.
Average Total Cost
when marginal cost is less than average total cost, average total cost is ___
Decreasing
If P > ATC, then a profit maximizing, monopolistically competitive firm earns ________ economic profits.
Postive Profits
The closest example of a perfectly competitive market is
Soybeans
Which of the following is NOT a resource as the term is used by economists?
Time
For economies of scale, a(n) ________ in a firm's scale of production leads to ________ average total cost
increase and lower
For economies of scale, a(n) ________ in a firm's scale of production leads to ________ average total cost.
increase production lower atc
Diminishing marginal returns implies
increasing marginal costs
An economy that is producing on the production possibility curve at some point other than the output of efficient allocation is
inefficient, as the combination of goods and services produced is not what people want
An economy that is producing on the production possibility curve at some point other than the output of efficient allocation is
inefficient, as the combination of goods and services produced is not what people want.