econ midterm 1

a monopolistic competitor has the following information about cost and demand. what will the firm's equal in the long run

$0

If a firm holds a pure monopoly in the market and is able to sell 4 units of output at $2.00 per unit and 5 units of output at $1.75 per unit, it will produce and sell the fifth unit if its marginal cost is

$0.75 or less

I'MAPizzaCorp produces and sells specialty pizzas. Their average fixed cost to produce 8,000 specialty pizzas is

$2.00

I'MABigCorp produces and sells kitchen wares. last year it produced 7,000 can openers and sold each for $3. The average fixed cost to produce each can opener was:

$2.43

refer to the table below. the information reflects the demand curve and the average cost curve for a monopoly. what will the firm's profits equal?

$2.50

Given the data provided in the table below, the total revenue (TR) for production at quantity (Q) level 4 equals

$20

Given the data provided in the table below, what will the marginal cost equal for production at quantity (Q) level 4?

$5.00

a monopolistic competitor has the following information about cost and demand. in the long run equilibrium, the good will sell at what cos

$7

Given the data provided in the table below, what will the amount of profit be for production at quantity (q)

-$10

Aleah is an electrical engineer. Her wage increased from $30 per hour to $40 per hour. She can work up to 50 hours each week. The table below shows her utility from different levels of leisure and income. If Aleah decreased her hours of work from 30 to 20 hours per week before her raise, the marginal utility loss from having less income is:

23

Bob budgets $12 a week for entertainment. He splits his time between going to the movies and going to the gym. Each movie costs $3 and each session at the gym also costs $3. The total utility from each of these activities is shown in the table below. Bob's utility maximizing point is:

3 movies; 3 gym workout sessions

neil's bakery is d'amour for giant cinnamon buns. In order to maximize his profits how many workers should he hire?

3 workers

mindy's company manufactures rubber balls. some values are missing, which statement is correct?

A=20, E=5

Andy views beer and pizza as complements to one another. If the price of pizza decreases, economists would expect:

Andy's demand for beer to increase.

a monopolistic competitor has the following information about cost and demand. in the long run equilibrium, the good will sell at what cost?

TR is exactly equal to TC, so profits equal zero.

Oligopoly firms acting individually may seek to gain profits ___________________________ .

by expanding levels of output and cutting prices

refer to figure 3.3, a change from point A to point E represents a

decrease in supply

The future of cities in the United States and in other countries will be determined by their ability to benefit from the _________________ and to minimize or counterbalance the ______________________.

economies of agglomeration; corresponding diseconomies

refer to figure 3.1, using the graph below and beginning on D1, a shift to D2 would indicate a

increase in demand

in microeconomics, the term _______ is synonymous with economies of scale

increasing returns to scale

the price elasticity of demand for tickets to local baseball games is estimated to be equal to 0.89. in order to boost ticket revenues, and economist would suggest

increasing the price of tickets because demand is inelastic

A 10 percent increase in income leads to a 15% decrease in the quantity of macaroni and cheese demanded but no change in the price of macaroni and cheese. From this information, we can assume:

macaroni is an inferior good and price elasticity of supply is infinite.

If cola and iced tea are good substitutes for consumers, then it is likely that:

their cross price elasticities are greater than zero.

the graph below illustrates the electricity market. consider market competition between firms and select the most appropriate answer

this market is imperfectly competitive with excess profits in the short run

refer to the diagram below. in this instance, the range of output represented at point b,

total costs exceed total revenues.

Garth inherited $25,000. He needs to decide now much to spend now and how much to save for later. If he saves the money, then he can earn 15% interest on the total before he spends it. Using the information about his marginal utility in the table below, Garth should:

spend nothing now and $28,750 in the future

A 25 percent decrease in the price of breakfast cereal leads to a 20 percent increase in the quantity of cereal demanded. As a result:

total revenue will decrease

If a paper mill shuts down its operations for three months so that it produces nothing, its __________________ will be reduced to zero?

variable costs

A drought decreases the supply of agricultural products, which means that at any given price a lower quantity will be supplied; conversely, especially good weather would shift the __________________ .

supply curve to the right

the following figure shows the average cost curve, demand curve, and marginal revenue curve for a monopolist. if maximizing profits, what does the firm's revenue equal?

the area of rectangle ADEH

the following figure shows the average cost curve, demand curve, and marginal revenue curve for a monopolist. if maximizing profits, what does the firm's profits equal?

the area of rectangle BDEG

Marcella operates a small, but very successful art gallery. All but one of the following can be classified as a variable cost arising from the physical inputs Marcella requires to operate her business. Which is it?

physical space for the gallery

refer to the diagram below, in this instance the marginal revenue curve

reflects each of the above

If the firm is producing at a quantity of output where marginal revenue exceeds marginal cost, then,

the firm should keep expanding production.

If accounting profits for a firm are 20% of output, and the opportunity cost of financial capital is 8% of output, then what do the firm's economic profits equal?

12% of output

Interpret the following statement: "An increase in the price of wheat will encourage farmers to increase the quantity of wheat supplied to the market."

The statement is correct.