MICRO FINAL REVIEW

Refer to Figure 4-8. How much of the tax is paid by producers?

$2

Refer to Figure 15-3. What is the amount of the monopoly's profit?

$2,700

Refer to Figure 4-8. For each unit sold, the price sellers receive after the tax (net of tax) is

$20

Refer to Figure 15-3. What is the amount of the monopoly's total revenue?

$20,400

Refer to Figure 4-8. The price buyers pay after the tax is

$27

Refer to Table 11-3. What is the marginal cost per unit of production when the firm produces 100 lanterns?

$32

Refer to Figure 15-3. What is the price charged for the profit-maximizing output level?

$34

Refer to Figure 12-5. If the market price is $20, what is the average profit at the profit-maximizing quantity?

$5

Refer to Figure 4-8. How much of the tax is paid by buyers?

$5

Refer to Table 11-3. What is the average variable cost per unit of production when the firm produces 90 lanterns?

$5.44

Refer to Figure 12-5. The firm's manager suggests that the firm's goal should be to maximize average profit. If the firm does this, what is the amount of profit that it will earn?

$6,600

Refer to Figure 12-5. If the market price is $20, what is the amount of the firm's profit?

$6,750

Refer to Figure 4-8. What is the size of the unit tax?

$7

What is the profit-maximizing rule for a monopolistically competitive firm?

to produce a quantity such that marginal revenue equals marginal cost

Refer to Figure 12-6. At price P1, the firm would produce

zero units

Refer to the figure above. What is the market-wide consumer surplus when the market price of calculators is $3?

$1,000

Refer to Table 11-3. What is the variable cost of production when the firm produces 115 lanterns?

$1,157

Refer to Table 11-3. What is the average total cost of production when the firm produces 120 lanterns?

$14

Refer to Figure 15-3. What is the amount of the monopoly's total cost of production?

$17,700

Refer to the figure above. If the price of a table is $2, what is John's income?

$80

Refer to Figure 11-1. The marginal product of the 7th worker is

-2

Refer to Figure 12-5. If the market price is $20, what is the firm's profit-maximizing output?

1,350 units

Refer to Figure 11-1. The marginal product of the 3rd worker is

15

Refer to Figure 11-1. The average product of the 4th worker is

17

Refer to the figure above. Given the consumer's budget constraint, the consumption bundle that maximizes his satisfaction consists of:

20 shirts and 15 pairs of trousers

Refer to Figure 3-4. At a price of $10, how many units will be sold?

200

Refer to the figure above. If John spends his entire income on tables, how many tables can he purchase?

40

Refer to Figure 15-3. What is the profit-maximizing/loss-minimizing output level?

600 units?

Refer to the figure above. If John spends his entire income on chairs, how many chairs can he purchase?

8

Refer to Figure 11-4. Identify the curves in the diagram.

E = marginal cost curve; F = average total cost curve; G = average variable cost curve; H = average fixed cost curve.

Refer to Figure 12-2. What is the amount of profit if the firm produces Q2 units?

It is equal to the vertical distance c to g.

Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for almonds. Which panel best describes what happens in this market when there is an increase in the productivity of almond harvesters?

Panel A

Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for women's clothing. Which panel best describes what happens in this market when the wages of seamstresses rise?

Panel B

Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for used clothing, an inferior good. Which panel describes what happens in this market as a result of a decrease in income?

Panel C

Refer to Figure 3-7. 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

Refer to Figure 12-5. The firm's manager suggests that the firm's goal should be to maximize average profit. In that case, what is the output level and what is the average profit that will achieve the manager's goal?

Q = 1,100 units, average profit =$6

Refer to Figure 12-6. At price P2, the firm would produce

Q3 units

Refer to Figure 12-2. The firm breaks even at an output level of

Q4 units

Danielle Ocean pays for monthly pool maintenance for her home swimming pool. Last week the owner of the pool service informed Danielle that he will have to raise his monthly service fee because of increases in the price of pool chemicals. How is the market for pool maintenance services affected by this?

There is a decrease in the supply of pool maintenance services.

Which of the following is a microeconomics question?

What factors determine the price of carrots?

Refer to Figure 4-8. As a result of the tax, is there a loss in consumer surplus?

Yes, because consumers paying a price above the economically efficient price.

If, in response to an increase in the price of chocolate, the quantity demanded of chocolate decreases economists would describe this as

a decrease in quantity demanded

Refer to the figure above. A change in the budget constraint from B1 to B2 indicates:

a decrease in the price of sweaters

Refer to Figure 3-4. If the current market price is $10, the market will achieve equilibrium by

a price increase, increasing the quantity supplied and decreasing the quantity demanded.

In 2004, hurricanes damaged a large portion of Florida's orange crop. As a result of this, many orange growers were not able to supply fruit to the market. At the pre-hurricane equilibrium price (i.e., at the initial equilibrium price), we would expect to see

a shortage of oranges

Refer to Figure 15-3. What is likely to happen to this monopoly in the long run?

an entry barrier....

Refer to the figure above. A change in the budget constraint from B2 to B3 indicates:

an increase in the consumers income

Refer to Figure 11-4. The vertical difference between curves F and G measures

average fixed costs

Refer to Figure 11-8. Which of the following could explain why the United States and China use different input combinations to produce a given quantity of cotton and yet, each country produces that quantity at the lowest possible cost?

because the prices of inputs are not the same for the two countries: labor is relatively lower-priced and capital is relatively higher priced in China

If, when a firm doubles all its inputs, its average cost of production decreases, then production displays

economies of scale

Refer to Figure 12-2. Suppose the firm is currently producing Q2 units. What happens if it expands output to Q3 units?

it makes less profit

Refer to Figure 12-6. At price P1, the firm would

lose an amount more then fixed cost

The market for tablet computers has grown rapidly over the past few years, due in part to the overwhelming success of the Apple iPad. Following the successful launch of the iPad in 2010, companies such as Toshiba, Samsung, Dell, and Amazon have all introduced products to compete with the iPad. The tablet computers introduced to compete with the iPad would be considered

substitutes for the iPad

Refer to Figure 3-4. If the price is $10,

there would be a shortage of 600 units