micro study guide

Marginal revenue product means the

amount by which the extra production of one more worker increases a firms total revenue

Refer to the diagram above. At the profit maximizing output, the firm will realize

an economic profit of ABGH

In what industry does the Bureau of Labor Statistics (BLS) project the highest rate of occupations is expected to be driven by

healthcare

Which of the following is correct

a purely competitive firm is a "price taker", while a monopolist is a "price maker"

refer to the data. Creamy Crisps explicits costs are

150,000

To the economist, total costs include

explicit and implicit costs

Refer to the data for a nondiscrimination monopolist. This firm will maximize its profit by producing

4 units

Answer the question on the basis of the following two scheudles, which show the amounts of additional satisfaction (marginal utility) that a consimer would get from successive quantites of products J and K

4 units of J and 5 units of K

Refer to the data. The value of Y is

45

The product price is $10 per unit and the cost per worker is $540. How many workers will the firm employ

5

Refer to the above graph showing the marginal product (MP) and the average product of labor (AP). At which quantity of labor employed does diminishing marginal returns set in

B

The price elasticity of demand coefficient measures

Buyer responsiveness to price changes

A purely competitive firm

Cannot earn economic profit in the long run

Which of the following diagrams correctly portrays a nondiscrimination pure monopolists demand (Demand) and marginal revenue (MR) curves?

D

Refer to the diagram. To maximize profits or minimize losses, this firm should produce

E units and charge price A

Refer to the diagram. To maximize profits or minimize losses, this firm will produce

E units at A price

Which of the following is most likely to be an implicit cost for Company X

Forgone rent from the building owned and used by Company X

In the figure, curves, represent the

MC, ATC, AVC, and AFC

Which of the following is a short run adjustment

a local bakery hires two additional bakers

Oligopolistic industries are characterized by

a few dominant firms substantial entry barriers

The MR=MC rule

applies both to pure monopoly and pure competition

The law of diminishing marginal utility states that

beyond some point, additional units of a product will yield less and less extra satisfaction to a consumer

Refer to the diagram. The profit maximizing level of output for this from

cannot be determined from the information given

the monopolistically competitive firm shown in the figure

cannot operate profitably in the short tun

According to the Robot Proof jobs analysis, which of these occupations is expected to be relatively robot proof

composer

Oligopolistic firms engage in collusion to

earn greater profits

The primary force encouraging the entry of new firms into a purely competitive industry is

economic profits earned by firms already in the industry

Labor unions may attempt to raise wage rates by

forcing employers, under the threat of a strike, to pay above the equilibrium wage rates

Cartels are difficult to maintain in the long run because

individual members may find it profitable to cheat on agreements

Refer to the table. Over the $6- $4 price range, supply is

inelastic

According to age earnings data

investments in education result in higher earnings

The utility of a good or service

is the satisfaction or pleasure one gets from consuming it

which of the following does not necessarily apply to a pure monopoly

its economic profits must be positive The firms will charge the highest price possible

Monopolistic competition means

many firms producing differentiated products

A consumers demand curve for a product is down sloping because

marginal utility diminishes as more of a product is consumed

Mutual interdependence means that each oligopolistic firm:

must consider the reactions of its rivals when it determines its price policy

Pure monopolists may obtain economic profits in the long run because

of barriers to entry

Concentration ratios measure the

percentage of total industry sales accounted for by the largest firms in the industry

The supply of known Monet Paintings is

perfectly inelastic

An industry comprised of a very large number of sellers producing a standardized product is known as

pure competition

In which of these continuums of degrees of competition (highest to lowest) is oligopoly properly placed?

pure competition, monopolistic, oligopoly, pure monopoly

Refer to the data. The firm is selling its output in a

purely competitive market

Refer to the diagram for a monopolistically competitive produce. The firm is

realizing a normal profit in the long run

Critics of minimum wage legislation argue that it

reduces employment

When economists say that the demand for labor is derived demand they mean that it is

related to the demand for the product or service labor is producing

Refer to the graph. other things equal, an increase in the price of a complementary resource would cause a

shift from D3 to D2

if some firms leave a monopolistically competitive industry, the demand curves of the remaining firms

shift to the right

Assume a pencil manufacturer is employing resources C and D in such quantities that the MPRs of the last unites hired are $80 and $50 respectively, the Price of resource C is $90 and the price of D is $35. The firm:

should hire less of C and more of D

which of the following defines marginal utility

the additional satisfaction from consuming one more unit of a product

Given your answer for the previous questions. The expected growth in the occupations is expected to be driven by

the aging population

Other things equal, if more firms enter a monopolistically competitive industry

the demand curves facing existing firms would shift to the left

The Illinois Railroad once asked the Illinois Commerce Commission for the permission to increase its commuter rates by 20%. The railroad argued that declining revenues made this rate increase essential. Opponents of the rate increase contended that the railroads revenues would fall because of the rate hike. It can be concluded that

the railroad felt that the demand for passenger service was inelastic and opponents of the rate increase felt it was elastic

The amount of calendar time associated with the long run

varies from industry to industry

If an exclusive union is successful in restricting the supply of labor the:

wage rate will rise

Suppose the MRP of the firms 12th worker is $22 and the workers marginal wage cost is $16. We can say with certainty that the firm

will find it profitable to hire more workers