Econ Test 4
Refer to Table 13-5. The marginal cost of producing the sixth widget is
$5.00
Refer to Table 13-5. What is the variable cost of producing zero widgets?
$0.00
Refer to Table 13-5. What is the marginal cost of producing the first widget?
$1.00
Refer to Table 13-5. The average total cost of producing one widget is
$11.00
Refer to Table 13-5. What is the variable cost of producing five widgets?
$15.00
Refer to Table 13-5. The average fixed cost of producing five widgets is
$2.00
Refer to Table 13-5. The average variable cost of producing four widgets is
$2.50
XYZ corporation produced 300 units of output but sold only 275 of the units it produced. The average cost of production for each unit of output produced was $100. Each of the 275 units sold was sold for a price of $95. Total profit for the XYZ corporation would be
-$3,875
Refer to Table 13-2. At which number of workers does diminishing marginal product begin?
5
Refer to Table 13-2. What is the marginal product of the fourth worker?
70
Which of the following statements is correct?
A competitive firm is a price taker and a monopoly is a price maker
Economists normally assume that the goal of a firm is to
C. maximize profit
When oligopolistic firms interacting with one another each choose their best strategy given the strategies chosen by other firms in the market, we have
Nash equilibrium
Which of these assumptions is often realistic for a firm in the short run?
The firm can vary the number of workers it employs, but not the size of its factory.
Which of the following statements about a production function is correct for a firm that uses labor to produce output?
The production function depicts the relationship between the quantity of labor and the quantity of output.
When a firm has little ability to influence market prices it is said to be in
a competitive market
A firm that is the sole seller of a product without close substitutes is
a monopolist
Which of the following expressions is correct?
accounting profit = economic profit + implicit costs
An agreement among firms regarding price and/or production levels is called
collusion
Monopoly firms have
downward-sloping demand curves and they can sell only a limited quantity of output at each price.
A special kind of imperfectly competitive market that has only two firms is called
duopoly
Refer to Figure 13-1. With regard to cookie production, the figure implies
diminishing marginal product of workers
Which of the following is not a reason for the existence of a monopoly?
diseconomies of scale
For a firm in a perfectly competitive market, the price of the good is always
equal to marginal revenue
Which of the following is NOT a characteristic of a perfectly competitive market?
firms have difficulty entering the market
Which of the following is an implicit cost?
forgone rent on office space used and owned by the firm
A typical firm in the U. S. economy would be classified as
imperfectly competitive
The marginal product of labor is equal to the
increase in labor necessary to generate a one unit increase in output
A production function is a relationship between
inputs and quantity of outputs
There are two types of imperfectly competitive markets:
monopolistic competition and oligopoly
Because monopoly firms do not have to compete with other firms, the outcome in a market with a monopoly is often
not in the best interest of society, doesn't maximize total economic well-being, and is inefficient
Game theory is important for the understanding of
oligopolies
The commercial jetliner industry, consisting of Boeing and Airbus, would best be described as a (an)
oligopoly
Those things that must be forgone to acquire a good are called
opportunity costs
When a perfectly competitive firm decides to shut down, it is most likely that
price is below the firms average variable cost
Imperfectly competitive firms are characterized by
price making ability
The intersection of a firm's marginal revenue and marginal cost curves determines the level of output at which
profit is maximized
John owns a shoe-shine business. His accountant most likely includes which of the following costs on his financial statements?
the cost of shoe polish
An oligopoly is a market in which
there are only a few sellers, each offering a product similar or identical to the products offered by other firms in the market.
The amount of money that a firm pays to buy inputs is called
total cost
Refer to Figure 13-1. As the number of workers increases,
total output increases, but at a decreasing rate
The amount of money that a firm receives from the sale of its output is called
total revenue
