FINAL EXAM STUDY GUIDE
The principle of diminishing marginal utility: A) refers to the tendency of marginal utility to decline as the amount of consumption of a good or service increases. B) assumes all goods are normal. C) refers to the tendency of total utility to increase until an individual's budget is no longer constrained. D) indicates that if a good is inferior, less of it will be purchased when income falls during a period.
A) refers to the tendency of marginal utility to decline as the amount of consumption of a good or service increases.
Utility is the: A) satisfaction consumers derive from their consumption of goods and services. B) lowest price that buyers are willing to pay for a given quantity of a good. C) good not adequately provided by a free market and usually provided by the government. D) difference between a firm's total revenue and its total economic cost.
A) satisfaction consumers derive from their consumption of goods and services.
The demand curve for a monopoly is: A) the industry demand curve. B) horizontal because no one can enter. C) perfectly elastic. D) the sum of the supply curves of all of the firms in the monopoly's industry
A) the industry demand curve.
If demand is elastic, then: A) the quantity effect dominates the price effect, and a decrease in the price causes total revenue to rise. B) the price effect dominates the quantity effect, and a fall in the price will cause total revenue to rise. C) the price effect dominates the quantity effect, and an increase in the price will cause total revenue to rise. D) the quantity effect dominates the price effect, and an increase in the price causes total revenue to rise.
A) the quantity effect dominates the price effect, and a decrease in the price causes total revenue to rise.
Average total cost is: A) total cost divided by quantity. B) total cost times quantity. C) the change in variable cost divided by the change in quantity. D) the change in quantity divided by the change in labor costs.
A) total cost divided by quantity.
Marginal cost is the change in: A) total cost resulting from a one-unit change in output. B) total cost resulting from a one-unit change in average cost. C) average cost resulting from a one-unit change in output. D) total cost resulting from a one-unit change in a variable input.
A) total cost resulting from a one-unit change in output
You manage a popular nightclub and lately revenues have been disappointing. Your bouncer suggests that raising drink prices will increase revenues, but your bartender suggests that decreasing drink prices will increase revenues. You aren't sure who is right, but you do know that: A) your bouncer thinks the demand for drinks is inelastic, while your bartender thinks the demand for drinks is elastic. B) both the bouncer and bartender think the demand for drinks is inelastic. C) your bouncer thinks the demand for drinks is elastic, while your bartender thinks the demand for drinks is inelastic. D) both the bouncer and bartender think the demand for drinks is elastic.
A) your bouncer thinks the demand for drinks is inelastic, while your bartender thinks the demand for drinks is elastic.
(Table: Consumer Surplus) Look at the table Consumer Surplus. If the price of a ticket to see The Nutty Nutcracker is $50, Narum's consumer surplus is: A) $15. B) $60. C) $240. D) $50.
A) $15.
(Table: Utility of Pecan Rolls) Look at the table The Utility of Pecan Rolls. The marginal utility for the fifth roll is: A) 0. B) 15. C) 10. D) 5.
A) 0.
(Table: The Demand for Chocolate-Covered Peanuts.) Look at the table The Demand for Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.60, the quantity demanded by George is ________ bags per month. A) 25 B) 30 C) 15 D) 10
A) 25
(Figure: Demand for Coconuts) Look at the figure Demand for Coconuts. If coconuts are a normal good and consumers believe that the price of coconuts will rise significantly in the near future, it will be represented in the figure as a movement from: A) E to B. B) C to A. C) A to B. D) B to E.
A) E to B.
Which of the following is a necessary condition for perfect competition? A) Firms produce a standardized product. B) A small number of firms control a large share of the total market. C) Extensive advertising is used to promote the firm's product. D) Movement into and out of the market is limited.
A) Firms produce a standardized product.
(Figure: Firms in Monopolistic Competition) In panel A of the figure Firms in Monopolistic Competition, the profit-maximizing quantity of output is determined by the intersection at point: A) N. B) O. C) P. D) K.
A) N
(Figure: Short-Run Monopoly) Look at the figure Short-Run Monopoly. The profit-maximizing quantity of output is quantity: A) R. B) S. C) T. D) Q.
A) R.
Steven consumes only two goods, both of which are normal goods. He is maximizing his utility in consumption of both goods. Now assume the price of one of the goods increases. How should Steven's consumption change? A) Steven should consume less of the good whose price rose and more of the good whose price did not change. B) Steven should consume less of both goods. C) Steven should consume more of both goods. D) Steven should consume more of the good whose price rose and less of the good whose price did not change.
A) Steven should consume less of the good whose price rose and more of the good whose price did not change.
When actually calculated for a normal demand curve, the price elasticity of demand will be: A) always negative. B) always positive. C) always greater than 1. D) usually equal to 1.
A) always negative.
A shift to the left of a supply curve is caused by: A) an increase in the cost of an input. B) an increase in the number of buyers. C) a technological improvement in production. D) an increase in the number of sellers.
A) an increase in the cost of an input.
The demand curve for running shoes has shifted to the right. What could have caused it? A) an increase in the income of buyers of running shoes B) an increase in the supply of running shoes C) a fall in the price of running shoes D) an increase in the price of running shoes
A) an increase in the income of buyers of running shoes
A decrease in the price of a good will result in: A) an increase in the quantity demanded. B) an increase in demand. C) more being supplied. D) an increase in supply.
A) an increase in the quantity demanded.
If marginal cost is greater than average total cost, then: A) average total cost is increasing. B) average total cost is decreasing. C) average total cost is at its minimum. D) average total cost is at its maximum.
A) average total cost is increasing.
When the price of gas goes down and the demand for tires goes up, a likely possibility is that tires and gas are: A) complements. B) both inexpensive. C) substitutes. D) both expensive.
A) complements.
If goods A and Z are complements, an increase in the price of good Z will: A) decrease the demand for good A. B) decrease the demand for both good A and good Z. C) increase the demand for good A. D) decrease the demand for good Z.
A) decrease the demand for good A.
An industry with a large number of relatively small firms producing ________ in a market with easy entry and exit is a(n) ________. A) differentiated products; monopolistic competition B) similar products; monopoly C) identical products; monopolistic competition D) differentiated products; oligopoly
A) differentiated products; monopolistic competition
Monopolistic competition is similar to perfect competition because firms in both market structures: A) do not face any barriers to entry into the industry in the long run. B) find it beneficial to advertise. C) are price-takers. D) produce goods that are perfect substitutes
A) do not face any barriers to entry into the industry in the long run.
(Table: Utility of Pecan Rolls) Look at the table The Utility of Pecan Rolls. Marginal utility is zero for the ________ roll. A) fifth B) third C) first D) second
A) fifth
(Figure: Monopolistic Competition) The monopolistic competitor in the figure Monopolistic Competition is producing at the output level that maximizes profits (minimizes losses). The shaded rectangle depicts the level of: A) fixed cost. B) profit. C) variable cost. D) loss.
A) fixed cost.
The market for corn is in equilibrium. Which of the following is most likely to increase the equilibrium price of corn? A) increasing production of corn-based ethanol B) decreasing household incomes and corn is a normal good C) a subsidy given by the government to growers of corn D) a bountiful harvest
A) increasing production of corn-based ethanol
The amount by which total utility rises when an additional slice of pie is consumed is called: A) marginal utility. B) incremental utility. C) average utility. D) the law of diminishing returns.
A) marginal utility.
Which of the following goods is most likely to display increasing marginal utility over some range? A) paint, because you need it in an amount sufficient to paint at least one entire room B) lobsters, which are so expensive that you must eat two to get your money's worth C) peanut butter and jelly sandwiches D) chicken during the 1920s, when it was considered a luxury good
A) paint, because you need it in an amount sufficient to paint at least one entire room
The incidence of a tax: A) refers to how much of the tax is actually paid by consumers and producers. B) is a measure of the deadweight loss from the tax. C) refers to who writes the check to the government. D) is a measure of the revenue the government receives from the tax.
A) refers to how much of the tax is actually paid by consumers and producers.
(Table: The Utility of Macaroni and Cheese) Look at the table The Utility of Macaroni and Cheese. Carmen loves macaroni and cheese for Thanksgiving. The marginal utility she derives from the fifth serving she eats is: A) 5. B) 0. C) 10. D) 15.
B) 0.
(Figure: Demand, Revenue, and Cost Curves) Look at the figure Demand, Revenue, and Cost Curves. The figure shows the demand, marginal revenue, marginal cost, and average total cost curves for Figglenuts-R-Us, a monopolist in the figglenut market. Figglenuts-R-Us will sell ________ figglenuts and set a price of ________ to maximize profits. A) 120; $40 B) 70; $65 C) 150; $46 D) 100; $50
B) 70; $65
(Figure: Four Markets for DVDs) Look at the figure Four Markets for DVDs. If D1 or S1 is the original curve and D2 or S2 is the new curve, which of the graphs illustrates what may happen in the market for DVDs if there is an increase in the cost of a movie ticket at the local theater? A) C B) A C) D D) B
B) A
(Figure: A Perfectly Competitive Firm in the Short Run) Look at the figure A Perfectly Competitive Firm in the Short Run. The lowest price that will yield zero economic profit is indicated by the letter: A) F. B) E. C) N. D) G
B) E.
An industry with only two firms is generally called: A) monopolistic competition. B) a duopoly. C) perfect competition. D) a monopoly.
B) a duopoly.
For consumers, pizza and hamburgers are substitutes. A rise in the price of a pizza causes ________ in the equilibrium price of a hamburger and ________ in the equilibrium quantity of hamburgers. A) a fall; an increase B) a rise; an increase C) a fall; a decrease D) a rise; a decrease
B) a rise; an increase
The demand curve for videos has shifted to the right. What could have caused it? A) an increase in the price of videos B) an increase in the incomes of buyers C) a fall in the price of videos D) an increase in the supply of videos
B) an increase in the incomes of buyers
An increase in demand with no change in supply will lead to ________ in equilibrium quantity and ________ in equilibrium price. A) a decrease; a decrease B) an increase; an increase C) an increase; a decrease D) a decrease; an increase
B) an increase; an increase
In monopolistic competition: A) when some firms exit, the demand curve for the firms that remain in the industry shifts to the left. B) firms advertise to increase demand for their product. C) firms earn large economic profits in the long run. D) entry of new firms shifts the demand curve for existing firms to the right.
B) firms advertise to increase demand for their product.
As output increases, the total cost curve A) becomes horizontal. B) gets steeper. C) increases at first, and then decreases. D) gets flatter.
B) gets steeper.
If Vanessa buys more pomegranates and fewer bananas, the ________ of pomegranates will _______, and the ________ of bananas will ________. A) marginal utility; rise; total utility; rise B) marginal utility; fall; marginal utility; rise C) marginal utility; rise; marginal utility; fall D) total utility; fall; marginal utility; rise
B) marginal utility; fall; marginal utility; rise
In large shopping malls, the retail market is most illustrative of: A) perfect oligopoly. B) monopolistic competition. C) monopoly. D) perfect competition.
B) monopolistic competition.
(Figure: Shifts in Demand and Supply II) Look at the figure Shifts in Demand and Supply II. The graph shows how supply and demand might shift in response to specific events. Suppose a drought destroys one-third of the nation's peanut crop. Which panel best describes how this will affect the market for peanuts? A) panel B B) panel C C) panel D D) panel A
B) panel C
(Figure: Shifts in Demand and Supply IV) Look at the figure Shifts in Demand and Supply IV. The figure shows how supply and demand might shift in response to specific events. Suppose the price of lumber falls dramatically. Which panel best describes how this will affect the market for houses? A) panel B B) panel C C) panel D D) panel A
B) panel C
An industry with a large number of small firms producing a standardized product in a market with easy entry and exit of firms is: A) monopoly. B) perfect competition. C) monopolistic competition. D) oligopoly.
B) perfect competition.
Which of the following statements best characterizes a monopoly? A monopoly: A) is composed of a large number of small firms. B) produces a product with no close substitutes. C) is composed of a small number of large firms. D) is composed of a single buyer and several sellers.
B) produces a product with no close substitutes.
How much ________ Susan obtains from eating green beans is a measure of the utility of green beans. A) usefulness B) satisfaction C) efficiency D) cost
B) satisfaction
The demand curve facing a monopolist is always: A) perfectly inelastic. B) the same as the industry's demand curve. C) perfectly elastic. D) unit-elastic.
B) the same as the industry's demand curve.
A monopolistically competitive industry, such as corn snack chips, and a perfectly competitive industry, like wheat farming, are alike in that: A) barriers to entry in both industries are large. B) there are many firms in each industry. C) firms in both types of industries produce similar but not identical products. D) firms in both types of industries produce identical products.
B) there are many firms in each industry.
(Figure: Profit Maximization for a Firm in Monopolistic Competition) Look at the figure Profit Maximization for a Firm in Monopolistic Competition. Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC. Before the innovation reduced the cost, the firm's maximum economic profit was: A) $4,500. B) $750. C) $0. D) $30.
C) $0.
(Figure: Demand and Supply of Gasoline) Look at the figure Demand and Supply of Gasoline. The initial equilibrium price and quantity (at intersection of S1 and D) of gasoline are: A) $1.50 and 400 gallons. B) $2.00 and 200 gallons. C) $2.50 and 300 gallons. D) $2.00 and 450 gallons.
C) $2.50 and 300 gallons.
(Figure: Consumer Surplus II) Look at the figure Consumer Surplus II. If the price of the good is $2, consumer surplus will equal: A) $90. B) $30. C) $45. D) $60.
C) $45.
(Figure: Firms in Monopolistic Competition) Look at the figure Firms in Monopolistic Competition. There will be a positive economic profit earned if the profit-maximizing price is ________ in panel ________. A) G; A B) I; C C) F; A D) H; B
C) F; A
(Figure: Total Revenue and Total Cost) Look at the figure Total Revenue and Total Cost. The most profitable level of output occurs at quantity: A) L. B) F. C) M. D) K.
C) M.
Which of the following is true if there is a decrease in the supply of ice cream? A) It's impossible to tell what will happen to consumer surplus. B) There is an increase in consumer surplus. C) There is a decrease in consumer surplus. D) There is no change to consumer surplus.
C) There is a decrease in consumer surplus.
(Table: The Market for Chocolate-Covered Peanuts) Look at the table The Market for Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.80, there is: A) a shortage of 70 bags per month. B) a surplus of 70 bags per month. C) a surplus of 140 bags per month. D) a shortage of 140 bags per month.
C) a surplus of 140 bags per month.
An industry is dominated by a few firms. Each of these firms acknowledges that its own choices affect the choices of its rivals. Each firm also recognizes that its rivals' choices affect the decisions it makes. This industry is an example of: A) perfect competition. B) a monopoly. C) an oligopoly. D) monopolistic competition
C) an oligopoly.
If demand is perfectly inelastic and the supply curve is upward sloping, then the burden of an excise tax is: A) shared by consumers and producers, with the burden falling mainly on producers. B) shared by consumers and producers, with the burden falling mainly on consumers. C) borne entirely by consumers. D) borne entirely by producers.
C) borne entirely by consumers.
The amount by which total utility ______ when an additional unit of a good is consumed is ________. A) decreases; maximum utility B) changes; average utility C) changes; marginal utility D) increases; additional utility
C) changes; marginal utility
Which of the following is a barrier to entry? A) economies of scale B) government-created barriers such as patents and copyrights C) control of scarce resources, economies of scale, and government-created barriers (i.e., patents and copyrights) D) control of scarce resources
C) control of scarce resources, economies of scale, and government-created barriers (i.e., patents and copyrights)
The price elasticity of demand is measured by: A) adding the percentage change in the price to the percentage change in the quantity demanded. B) dividing the percentage change in the price by the percentage change in the quantity demanded. C) dividing the percentage change in the quantity demanded by the percentage change in the price. D) subtracting the percentage change in the price from the percentage change in the quantity demanded.
C) dividing the percentage change in the quantity demanded by the percentage change in the price.
The law of demand is illustrated by a demand curve that is: A) vertical. B) upward sloping. C) downward sloping. D) horizontal.
C) downward sloping.
Marginal cost is the: A) reduction in cost from economies of scale. B) increase in output from the addition of one unit of labor. C) increase in total cost when one more unit of output is produced. D) ratio of average total cost to total cost.
C) increase in total cost when one more unit of output is produced.
(Figure: The Profit Maximizing Firm) Look at the figure The Profit Maximizing Firm. The figure shows cost curves for a firm operating in a perfectly competitive market. If the market price is P4: A) marginal revenue and price are unrelated in perfect competition. B) marginal revenue is greater than P4. C) marginal revenue and price are the same. D) marginal revenue is less than P4.
C) marginal revenue and price are the same.
(Figure: Revenues, Costs, and Profits III for Tomato Producers) Look at the figure Revenues, Costs, and Profits III for Tomato Producers. The market for tomatoes is perfectly competitive, and an individual tomato farmer faces the cost curves shown in the figure. If market price of a bushel of tomatoes is $12, this farm will: A) break even. B) earn an economic profit. C) minimize its losses by continuing to produce. D) minimize its losses by shutting down.
C) minimize its losses by continuing to produce.
An industry with a single producer that sells a single product with no substitutes is a: A) monopolistic competition. B) perfect competition. C) monopoly. D) oligopoly.
C) monopoly.
The law of diminishing marginal utility indicates that the slope of the marginal utility curve eventually becomes: A) vertical. B) positive. C) negative. D) horizontal.
C) negative.
If, for Adam, the marginal utility of ties is greater than the marginal utility of shirts, this consumer should: A) buy more shirts and fewer ties. B) buy the same amount of each. C) not change behavior until more information is available. D) buy more ties and fewer shirts.
C) not change behavior until more information is available.
Suppose that more police and security workers become aware that wearing bulletproof vests can protect them from injury and decide to start wearing bulletproof vests. At the same time, the price of ceramics used to produce the vests falls. The equilibrium relative price of bulletproof vests ________ and the equilibrium quantity produced ________. A) decreases; decreases B) probably changes, but in an ambiguous direction; probably changes, but in an ambiguous direction C) probably changes, but in an ambiguous direction; increases D) increases; increases
C) probably changes, but in an ambiguous direction; increases
The price elasticity of demand measures the: A) responsiveness of the price to a change in the quantity demanded. B) responsiveness of demand when the price is held constant and demand increases or decreases. C) responsiveness of the quantity demanded to a change in the price. D) extent to which prices are flexible and respond to market forces.
C) responsiveness of the quantity demanded to a change in the price.
Utility is most closely related to: A) necessity. B) usefulness. C) satisfaction. D) requirement.
C) satisfaction.
(Figure: Demand for DVDs) Look at the figure Demand for DVDs. A decrease in the price of DVD players (a complement) would result in a change illustrated by: A) the move from l to m in panel D. B) the move from f to g in panel A. C) the move from h to i in panel B. D) the move from j to k in panel C.
C) the move from h to i in panel B.
Total revenue is A) the price of a good divided by the amount of the good sold. B) total sales less total cost. C) the price of a good times the quantity of the good that is sold. D) the price effect times the quantity effect.
C) the price of a good times the quantity of the good that is sold.
Producer surplus for an individual seller is equal to: A) the marginal cost of the good minus the price of the good. B) the willingness to pay for the good minus the price of the good. C) the price of the good minus the marginal cost of producing the good. D) the marginal cost of the good minus the willingness to pay for the good.
C) the price of the good minus the marginal cost of producing the good.
(Figure: The Supply of DVD Rentals) Look at the figure The Supply of DVD Rentals. A decrease in the price of DVD rentals would result in a change illustrated by the move from: A) p to q in panel B. B) s to t in panel C. C) u to v in panel D. D) n to o in panel A.
C) u to v in panel D.
A perfectly price-inelastic demand curve is: A) upward sloping. B) horizontal. C) vertical. D) downward sloping.
C) vertical.
Along a given demand curve, a decrease in the price of a good: A) It's impossible to tell what will happen to consumer surplus. B) will have no effect on consumer surplus. C) will increase consumer surplus. D) will decrease consumer surplus.
C) will increase consumer surplus.
(Figure: A Profit-Maximizing Monopoly Firm) Look at the figure A Profit-Maximizing Monopoly Firm. This firm's cost per unit at its profit-maximizing quantity is: A) $18. B) $8. C) $15. D) $16.
D) $16.
Luis is willing to sell his pool table for $600, but if he gets $840, the producer surplus Luis receives is ________. A) $1,440 B) $600 C) $840 D) $240
D) $240
(Figure: Total Cost for Tomato Producers) Look at the figure Total Cost for Tomato Producers. The market for tomatoes is perfectly competitive, and an individual tomato farmer faces the cost curves shown in the figure. The market price of a bushel of tomatoes is $14. The farmer's total cost at the profit-maximizing number of bushels is: A) $14.00. B) $72.00. C) $3.50. D) $56.00.
D) $56.00.
(Table: The Utility of Macaroni and Cheese) Look at the table The Utility of Macaroni and Cheese. Carmen loves macaroni and cheese for Thanksgiving. The marginal utility she derives from the sixth serving she eats is: A) 25. B) -15. C) 0. D) -25.
D) -25
(Figure: Cost Curves for Corn Producers) Look at the figure Cost Curves for Corn Producers. The market for corn is perfectly competitive, and an individual corn farmer faces the cost curves shown in the figure. If the price of a bushel of corn in the market is $14, then the farmer will produce ________ of corn and earn an economic ________ equal to _________. A) 4 bushels; profit; just less than $80 per bushel B) 2 bushels; profit; $0 C) 2 bushels; loss; just more than $80 per bushel D) 4 bushels; profit; $0
D) 4 bushels; profit; $0
(Table: Exercise and Utility) Look at the table Exercise and Total Utility. The table shows Marta's total utility from hours of exercise at the gym. Given this information, what can be said about Marta's marginal utility from exercise? A) Marginal utility initially increases but eventually stays constant as more exercise is consumed. B) Marginal utility initially decreases but eventually increases as more exercise is consumed. C) Marginal utility always decreases as more exercise is consumed. D) Marginal utility initially increases but eventually decreases as more exercise is consumed.
D) Marginal utility initially increases but eventually decreases as more exercise is consumed.
You notice that the price of DVD players falls and the quantity of DVD players sold increases. Which of the following may cause this change? A) Supply of DVD players shifts to the left. B) Demand for DVD players shifts to the right. C) Demand for DVD players shifts to the left. D) Supply of DVD players shifts to the right.
D) Supply of DVD players shifts to the right.
Which of the following is not true regarding a price-elastic demand curve? A) The absolute value of the price elasticity is greater than 1. B) Total revenue increases when the price falls. C) The percent changes in the quantity exceed the percent changes in the price for any small change in price. D) The absolute value of the price elasticity is a fraction less than 1.
D) The absolute value of the price elasticity is a fraction less than 1.
To be called an oligopoly, an industry must have: A) relatively easy entry and exit. B) independence in decision making. C) a horizontal demand curve. D) a small number of interdependent firms.
D) a small number of interdependent firms.
(Figure: The Demand and Supply of Wheat) Look at the figure The Demand and Supply of Wheat. If a price of $8 temporarily exists in this market: A) a shortage of 4,000 bushels will result. B) a shortage of 2,000 bushels will result. C) a surplus of 6,000 bushels will result. D) a surplus of 4,000 bushels will result.
D) a surplus of 4,000 bushels will result.
An increase in the consumer surplus in the market for milkshakes may result from: A) a decrease in the demand for milkshakes. B) an increase in the price of milkshakes. C) a decrease in the supply of milkshakes. D) an increase in the supply of milkshakes.
D) an increase in the supply of milkshakes.
The marginal utility of eating sweet potatoes is the: A) change in total utility divided by the number of servings consumed. B) total utility divided by the change in the number of servings consumed. C) total utility divided by the number of servings consumed. D) change in total utility from consuming an additional serving.
D) change in total utility from consuming an additional serving.
One of the major differences between a monopolist and a purely competitive firm is that the monopolist has a ________ demand curve, while the purely competitive firm has a ________ demand curve. A) downward-sloping; perfectly inelastic B) perfectly elastic; downward-sloping C) perfectly inelastic; perfectly elastic D) downward-sloping; perfectly elastic
D) downward-sloping; perfectly elastic
The most important source of oligopoly in an industry is: A) technological inferiority. B) ownership of plentiful resources. C) government regulation. D) economies of scale.
D) economies of scale.
The demand for food is very inelastic, so if a tax is levied on the consumers of food, the tax incidence: A) is typically split equally between consumers and producers. B) cannot be determined without more information. C) is typically on producers more than consumers. D) is typically on consumers more than producers.
D) is typically on consumers more than producers.
When a firm experiences diminishing marginal returns: A) marginal product is negative. B) total product falls because marginal product is falling. C) its output is falling. D) marginal product is falling but is likely to be still positive.
D) marginal product is falling but is likely to be still positive.
The cost of sensors used in making digital cameras falls, while a successful ad campaign makes digital cameras more fashionable. As a result, the equilibrium relative price of digital cameras ________ and the equilibrium quantity ________. A) increases; may increase, decrease, or stay the same B) decreases; increases C) increases; increases D) may increase, decrease, or stay the same; increases
D) may increase, decrease, or stay the same; increases
Most electric, gas, and water companies are examples of: A) restricted-input monopolies. B) unregulated monopolies. C) sunk-cost monopolies. D) natural monopolies.
D) natural monopolies.
The market structure that is characterized by only a small number of producers is referred to as a(n): A) monopoly. B) monopolistic competition. C) perfect competition. D) oligopoly.
D) oligopoly.
The total cost curve is: A) vertical. B) horizontal. C) negatively sloped. D) positively sloped
D) positively sloped
The utility of a good is determined by how much ________ a particular consumer obtains from it. A) usefulness B) cost C) need fulfillment D) satisfaction
D) satisfaction
In the long run: A) at least one input is free. B) all inputs are more expensive. C) inputs are neither variable nor fixed. D) the firm has time to change the level of all inputs.
D) the firm has time to change the level of all inputs.
Economists identify the satisfaction a person derives from the consumption of goods and services as: A) pleasure. B) happiness. C) usefulness. D) utility.
D) utility.
