micro final
if the output price is $3, what is the marginal revenue product of the fifth unit of labor
$150
What is equilibrium price in this market
$50
what is the economically efficient output level
Q2
how much of the tax is paid by producers
$2
the marginal social cost and marginal private cost curves for a market are in the graph. What is the marginal external cost
$2
refer to the market for child care that is shown in the figure. The original equilibrium price is $10,000. A subsidy is now introduced for parents who pay for child care. The amount of the subsidy is:
$2,000
the price buyers pay after tax is
$27
what is the total consumer surplus if 50 jars are sold at the price of $6
$350
Amanda Mendez goes to a local cafe and orders a sandwich. Her willingness to pay for that sandwich is $10. The price of the sandwich is $4. The cost to the cafe to produce that sandwich is $1. How much economic surplus does Amanda receive when she purchases the sandwich
$6
at what price does the market experience a shortage of 70 units
$7
Corinne is offered a job with a salary of $70,000, which turns down to start her own business. She uses $20,000 of her own savings to help start a business, Corinne collects total revenue of $180,000 and must cover explicit costs of $105,000. During her first year in business, Corinne's accounting profit is ____, and her economic profit is _____
$75,000; $4,000
diminishing marginal benefit
can be seen in the downward slope of the demand curve
price discrimination occurs when a company
charges different prices to different customers who are all buying the same product
the price elasticity of demand for beef is estimated to be 0.60 (in absolute value). This means that a 20 percent increase in the price of beef, holding every thing else constant, will cause the quantity for beef demanded to
decrease by 12 percent
the table above shows the demand schedules for loose-leaf tea of two individuals and the rest of the market. If the price of loose-leaf tea rises from $3 to $4, the market quantity demanded would
decrease by 32 lbs
according to the figure, if there is international trade in this market, and the world price on an engine is $1,000
domestic producers will export 600 units
according to the marginal principle, keep increasing quantity until the marginal benefit of an additional item is ____ the marginal cost of an additional item
equal to
the table above lists the highest prices five consumers are willing to pay for a theater ticket. If the price of one of the tickets is $10,
everyone will buy a ticket except Esther
if an increase in income leads to a decrease in demand for popcorn, then the popcorn is an
inferior good
Opera Estate Girls' School is considering increasing its tuition to raise revenue. If the school believes that raising tuition will increase revenue it is assuming that the demand for attending the school is
it is assuming that the demand for attending the school is elastic
increasing the price of the item will cause the movement from
point N to point M
it is a rainy day, and you are considering taking an Uber one mile to meet some friends. You have decided you are willing to pay $20 to avoid getting wet from the rain. The trip would normally cost you $8, but there is a two times surcharge due to the weather. You should ___ because the benefit to you of taking the uber is___ than the cost
take an Uber; more
marginal revenue product for a perfectly competitive seller is equal to
the change in total revenue that results from hiring another worker
the phrase "demand has decreased" means that
the demand curve has shifted to the left
which of the following about this market between points A and B
the demand curve is inelastic, and thus the seller gains revenue by raising price from $1.50 to $1.75
an import is a good or service
purchased from a foreign seller
a perfect competitor cannot
raise the market price of a product
sunk costs are cost that are incurred
regardless of which decision is made
Mario is willing to sell an extra unit of his product as long as price is
at least as high as marginal private cost
following the rational rule implies economic surplus is maximized when
marginal benefit equal marginal costs
if the opportunity costs of production for two goods is different between two countries, then
mutually beneficial trade is possible
how does the price customers pay under price discrimination compare to the price with no price discrimination or the one that is set according to the marginal cost = marginal benefit
under price discrimination, some customers pay a higher price, and some pay a lower price
is there a dominate strategy for Godrickporter and if so, what is it
yes, Godrickporter should increase its advertising budget
a minimum wage law dictates
the lowest wage that firms may pay for labor
an external benefit is
a benefit accuring to bystanders
an external cost is
a cost imposed on bystanders
an inferior goos is
a good whose demand has a negative relationship with the changes in income
consider the market for environmentally friendly three-dimensional printed houses that is shown in the figure. The government wants to encourage buyers to buy such houses and places a price ceiling on the market at $200,000 per house. What occurs in this market after the implementation of the price ceiling
a shortage of 300,000 houses
If there is a technological advance in the production of the Amazon Echo smart speaker, then you would expect to see ____ in the market for Amazon Echos
an eventual fall in the equilibrium price
in the graph, the movement from point E to point F represents
an increase in supply
market failure occurs when a market forces lead to
an inefficient outcome
mana has a comparative advantage in baking cakes. This means that she
gives up less to bake a cake than other bakers must give up to a cake
if demand is ____ a higher price yields ____ total revenue
inelastic; higher
what standard is used to determine the most efficient economic outcome
largest economic surplus
a dominate strategy
is one that is best for a firm, no matter what strategies other firms use
suppose a minimum wage of $18 per hour is introduced. The implementation of the minimum wage leads to a ____ of ____ workers
surplus; 12,000
a tariff is a
tax on imported goods
the marginal benefit of consuming an item is
the additional benefit from buying one more unit of the item
refer to the figure which shows the market for timber. Which of the following statements is correct
the economic burden of this tax os greater on the seller
the law of supply refers to
the positive relationship between price and quantity supplied
according to the figure, at a world price of $600
the quantity supplied exceeds the quantity demanded, and there is a downward pressure on the world price
suppose that the paper production industry can chose to produce both printing paper and drawing paper. what effect would rising market price for printing paper have on the market for drawing paper
the supply for drawing paper would decrease
which of the following is the size of a corrective tax to resolve a negative externality problem
the tax is equal to the marginal cost
what is the change in the total market demand for soda when the price changes from $1.50 per can to $2 per can
the total quantity demanded in the market falls by 23 cans
the price of coffee at a local coffee shop is $3. Cheryl is willing to pay $6 for her first cup of coffee each day . The marginal benefit to her of each additional cup of coffee, after her first, falls by $2. How many cups of coffee should Cheryl purchase
two
Juan McDonald has decided he is willing to pay $800 for a new ipad. Apple (the producer of Ipads) is selling a new Ipad for $700. It costs Apple $400to produce this ipad. A voluntary economic transaction between Juan and apple ____ occut because ______ would be better off due to the transaction
will; both Juan and Apple
A tax collected for sellers shifts the
a supply curve to the left
raising marginal costs imply
an upward-sloping supply curve
A characteristic of monopolistic competition that is not present in other market structures is that there
are many sellers and each produces a differentiated version of the product
what attracts new sellers into a market
existing sellers in the market earning economic profits
in economics, the study of decisions of firms in industries where the profits of each firm depend on its interactions with other firms is called
game theory
Without the tariff in place, the United States
imports 16 million pounds of rice
when people focus on their competitive advantage and then trade for other things, they
improve their standard of living or increase their leisure time
in perfectly competitive market, a company's marginal revenue equals ____. For a company with market power, marginal revenue is ____
price; less than price
price minus marginal cost equal the
producer surplus of a unit sold
average cost equals
total cost divided by output
the two rules to use in setting group prices are to charge higher prices to those ____, and charge lower prices to those _____
who value the product more; who are especially price-sensitive
Gary Parker has decided he is willing to pay $700 for a new ipad. Apple (the producer of ipads) is selling a new ipad for $600. It costs Apple $400 to produce this ipad. How much economic surplus does Gary receive if he purchases this ipad
$100
the price of milk at the local grocery store rises by 25%, and the quantity of milk demanded falls by 10%. The absolute value of the price elasticity pf demanded for milk is ____, and demanded is____
0.4; inelastic
Delilah's income rises by 8%. She decides to increase the number of movie tickets she purchases by 20%. Her income elasticity of demand for movie tickets are
2.5
the price of product C rises by 10%. As a result, the quantity demanded of product D rises by 20%. the cross-price elasticity of demand between product C and product D is ____ and they are _____
2; substitutes
an equilibrium in which the choice that each player makes is a best response to the choices other players are making is the definition of a
Nash equilibrium
Tony's Italian Ice is a monopolistically competitive firm. If Tony's earns a profit in the short run, which of the following is most likely to occur?
New firms that sell Italian ice will enter the market and Tony's demand curve will shift to the left
If the firm represented in the diagram is currently producing and selling Qa units, what is the price charged?
P2
according to the rational rule, what output and price should the firm in the following example choose
Q= 4; P= $7.00
a decrease in price of inputs would be represented by a movement from
S1 to S2
what is a prisoners dilemma
a game in which players act in rational, self-interested ways that leave everyone worse off
when price discrimination is practiced, a company sells _____ and charges ___ compared to what it would do without practicing price discrimination
a larger output; a greater range of prices
how does marginal revenue compare to the price for a seller with market power
beyond the first unit sold, marginal revenue is less than price
an increase in a perfectly competitive firm's demand for labor could be caused by
an increase in the market demand for the firm's product
Argentina and Chile both produce copper and timber. If Chile produces copper much more efficiently than Argentina and timber slightly more efficient than Argentina, _____ can benefit from trading copper and timber with each other
both countries
An oligopoly firm is similar to a monopolistically competitive firm in that
both firms have market power
when trade is voluntary, who gains from it
both the seller and the buyer gain, although not necessarily equally
the prisoner's dilemma shows how markets
can deliver inefficient outcomes
a firm than can effectively price discriminate will charge a higher price to
customers who have the more inelastic demand for the product
Alex and Marilyn started Ono Yo, an organic and fresh fruit frozen yogurt truck. As the demand for organic and healthier desserts rose, demand for Ono Yo's products grew. Because of the growth in demand for Ono Yo's product, Alex's and Marilyn's
demand for workers increased
buyers bear a smaller incidence (share) of tax when
demand is more elastic than supply
an equilibrium price is
determined by the intersection of the demand and supply curves
you go starbucks and see the price of your favorite tall vanilla latte has gone up by 25 cents. In fact, all sizes of the vanilla lattes are now more expensive. As a result of this price increase, you would expect to see a
fall in the quantity demand of vanilla lattes
asa result of technological innovation, automated water pumps are being installed on the farms of Kenyan tomato farmers. As a result of the increased due of automated water pumps, the equilibrium price of tomatoes will
fall, due to an increase in supply
which of the following diagrams represents the demand and average cost curves of a firm in the long run, given free entry and exit
firm D
the diagram represents the demand and costs facing BJ's smoothies for two different groups of consumers. What price and quantity should BJ choose for each group
group A: P= $10, Q = 100; Group B: P =$9, Q =50
Inez owns a technology company. Which of the following conditions would make it difficult for her to price discriminate
her market is highly competitive
in 2018, the unemployment rate in the US went as lows as 3.7%, as measured by the Bureau of Labor Statistics. This historically low level of unemployment occurred simultaneously with a large trade deficit, This provides evidence against which of the following arguments against international trade
international trade may lead to job loss
assume that there is free entry and exit in the pizza restaurant market. How profitable can Mario expect his Mario's pizza restaurant to be in the long run
it will experience zero economic profits
what will happen in the market for nurses in the US if capital equipment replaces nurse labor monitor vital statistics on patients in hospitals
labor demand will decrease, resulting in lower wages and fewer hours employment for nurses
when an increase in demand for stand-up paddle boards rises, then the demand for skilled paddle boards shapers _____, and their marginal revenue product ____
rises; rises
what happens to equilibrium price and equilibrium quantity when demand and supply increase simultaneously but we do not know the relative size of the shifts
the equilibrium quantity rises, and the equilibrium quantity is ambiguous
what happens to the equilibrium wage and quantity of labor if output price rises
the equilibrium wage and the equilibrium quantity of labor rise
price discrimination can be successful only if
the product can be resold
the rational rule for employers implies that they keep hiring until
the wage equals the marginal revenue product of the last worker hired
if a new company enters a monopolistically competitive market, what will happen to the existing companies in the market
their demand curves will shift to the right
If the social cost of producing a good or service exceeds the private cost
positive externality exists
the sock market is at equilibrium. How much economic surplus is being generated in the sock market
$45
the demand curve for one particular brand of cough syrup will ____ the demand curve for cough syrup as a general category
be more elastic
when externalities are present, the socially optimal outcome occurs when the _____ benefit equals the _____ cost
marginal social; marginal social
efficient outcome
may not make everyone happy
daisy is a milk farmer in a perfectly competitive market where there are many milk farmers. the market price for milk is $0.15 per gallon, which is also the marginal cost per gallon of milk. If daisy charges $0.25 per gallon she will
not sell any milk
what is the marginal revenue of the fourth unit in the following example
$2
Use the checkmark method to determine which cell has a Nash equilibrium. When there is Nash equilibrium, Vlad earns profits of ____, and Assad earns profits of ____
$2,000; $2,000
what is marla's profit margin
$2.50
using the rational rule for employers, the maximum profit Carmin could earn is ___. She would employ _____ workers to earn this profit
$352; three
what is the marginal revenue of the sixth unit of output
$4
Juan earns a yearly salary of $120,000 in his job and $1,000 per year interest on his savings. After he quits his job to start a company, he uses all his savings to purchase manufacturing equipment for his company. Given the above information and the data summarizing his first year in business in the table, how much economic profit or loss does Juan earn.
$4,000
with no cooperation, the Nash equilibrium yields Bella a profit of ____ and Martin a profit of ______
$4,000; $3,500
if Maria charges $8, then Jose's best option would be to charge ____ in order to earn _____
$4; $280
if the wage rate is $30, how many workers should dale hire
4
patents have a positive impact of _____ and the negative impact of ____
encouraging research; creating a monopoly
if you can complete a task at a lower opportunity cost than anyone else, then you
have a comparative advantage at the task
which of the following is a positive economic statement
if the government raises taxes, people will have less income available for purchases and saving
you are given data on four products- toothpaste, shampoo, soap, and laundry detergent. The absolute value of the price elasticity of demand for toothpaste is 4. The absolute value or the price elasticity of demand for shampoo is 0.2. The absolute value of the price elasticity of demand for soap is 0.5. The absolute value of the price elasticity of demand for laundry detergent is 2. Which product has the most inelastic demand?
shampoo
the price floor is
the minimum price that a seller can charge in a market
when trade is based on comparative advantage
both trading partners end up better off
when you calculate marginal costs, they should include
only variable costs
consider the decision to read your textbook on economics. Which of the four core principles of economics applies to the notion that instead of reading this textbook you could be studying for your upcoming exam in another course
opportunity cost principle
Assume that the graphs in this figure represent the demand and supply curves for bicycle helmets. Which panel best describes what happens in this market if there is a substantial increase in the price of bicycles
panel (d)
a product market has many buyers and many sellers, and its largest company produces 1% of the market output. In addition, all sellers produce identical goods. What market structure is consistent with this description
perfect competition
how does the government regulation affect market efficiency
some regulations correct for market failure; other regulations cause inefficient outcomes
in which of the following situations would Max's doughnut shop have the greatest market power
the closest doughnut shop or bakery id 25 miles from Max's shop
What is Haley's opportunity cost of making a necklace?
3/4 of a bracelet
according to the figure, if there is international trade in this market and the world price of a television is $500, domestic consumers will purchase ___ units from domestic producers and _____ units from foreign producers
40,000; 30,000
Without the tariff in place, the United States consumes
42 million pounds of rice
the graph shows the marginal social cost, demand, and supply curves in the jigsaw puzzle market. What are the socially optimal quantity and price in this market
4; $8
take a look at Leonard's individual weekly demand curve for pizza slices. How many slices of pizza is Leonard willing to buy at $3 per slice
5 slices
according to the figure, it there is international trade in this market and the world price of a television is $500, the quantity demanded is ____, and the quantity supplied is ____ at the world price
70,000; 40,000
Ang can mow the lawn in two hours. It takes Bill three hours to mow the same lawn. What can be concluded from this information
Ang has an absolute advantage over Bill in mowing the lawn
which of the following statements is true
Jack has a comparative advantage in garden cultivating and George in lawn mowing
which of the following market changes would lead to a shift of the demand curve from old demand to new demand
an increase in the price of a substitute product
how do rice farmers in rural Indonesian villages figure out that they need to produce more rice when the demand for it has risen in other parts of the world
an increase in the price of rice gives them a signal that rice is more valuable
Vineyards can grow either red wine grapes or white wine grapes on their land. Which of the following would cause the supply of red wine grapes to decrease?
an increase in the price of white wine grapes