Microeconomics Final

As the firm in the above diagram expands from plant size #1 to plant size #3, it experiences: diminishing returns. economies of scale. diseconomies of scale. constant costs

economies of scale

Which of the following curves is not U-shaped? MC AFC AVC ATC

AFC

Which of the following markets impose deadweight losses on society? (i) perfect competition (ii) monopolistic competition (iii) monopoly

(ii) and (iii) only

An oligopoly is a market in which a.firms are price takers. b. the actions of one seller in the market have no impact on the other sellers' profits. c. there are only a few sellers, each offering a product similar or identical to the products offered by other firms in the market. d. there are many price-taking firms, each offering a product similar or identical to the products offered by other firms in the market.

.there are only a few sellers, each offering a product similar or identical to the products offered by other firms in the market.

Refer to the below diagram. At the profit-maximizing output, total revenue will be: 0AHE. 0BGE. 0CFE. ABGE

0AHE

Refer to the below diagram. At output level Q total variable cost is: 0BEQ. BCDE. 0CDQ. 0AFQ.

0BEQ

Refer to the above diagram. At output level Q total cost is: 0BEQ. BCDE. 0BEQ plus BCDE. 0AFQ plus BCDE.

0BEQ plus BCDE

Refer to the below diagram. At the profit-maximizing output, total variable cost is equal to: 0AHE. 0CFE. 0BGE. ABGH.

0CFE.

Refer to the below graph. The profit-maximizing monopolist in it will set its price at: 0J 0G 0K 0H

0J

Refer to the below graph. The profit-maximizing monopolist in it will set its output at: 0V 0Y 0T 0X

0V

Suppose the market for wheat is perfectly competitive. Fed up with low prices, a wheat grower in Texas decides he won't take his output to market and, instead, dumps all his wheat into the Red River. What happens to the market price of wheat? It decreases by a large amount. It doesn't change. It decreases by a small amount. It increases by a large amount.

It doesn't change.

Refer to the below diagram. This firm will earn a positive profit if product price is: P1. P2. P3. P4.

P1

Refer to the below graphs. What will happen in the long run to industry supply and the equilibrium price of the product? S will decrease, P will decrease S will increase, P will decrease S will decrease, P will increase S will increase, P will increase

S will decrease, P will increase

Allowing an inventor to have the exclusive rights to market her new invention will lead to (i) a product that is priced higher than it would be without the exclusive rights. (ii) desirable behavior in the sense that inventors are encouraged to invent. (iii) higher profits for the inventor.

a. (i), (ii), and (iii) b. (i) and (ii) only c. (i) and (iii) only d. (ii) and (iii) only

In the transition from the short run to the long run, the number of firms in a competitive industry is a. able to adjust to market conditions. b. decreasing. c. increasing at a constant rate. d. fixed.

a. able to adjust to market conditions.

The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. ​$14. b. ​$12. c. ​$7. d. ​$10.50.

a.$14

Fixed cost is: the cost of producing one more unit of capital, say, machinery. any cost which does not change when the firm changes its output. average cost multiplied by the firm's output. usually zero in the short run.

any cost which does not change when the firm changes its output

A local playground equipment company plans to operate out of its current factory, which is estimated to last 30 years. All cost decisions it makes during the 30-year period a. are long-run decisions. b. involve only maintenance of the factory. c. are zero because the cost decisions were made at the beginning of the business. d. are short-run decisions.

are short-run decisions

When a certain competitive firm produces and sells 100 units of output, marginal revenue is $80. When the same firm produces and sells 200 units of output, what is average revenue? a. $40 b. $80 c. $160 d. This cannot be determined from the given information.

b. $80

To maximize its profit, a monopolist would choose which of the following outcomes? a. Q = 30 and P = 30 b. Q = 30 and P = 60 c. Q = 60 and P = 30 d. Q = 45 and P = 45

b. Q = 30 and P = 60

Refer to the below diagram for a purely competitive producer. The firm will produce at a loss at all prices: above P1. above P3. above P4. between P2 and P3.

between P2 and P3.

When a profit-maximizing firm is earning profits, those profits can be identified by a. P × Q. b. (MC - AVC) × Q. c. (P - ATC) × Q. d. (P - AVC) × Q.

c. (P - ATC) × Q.

Which area represents the deadweight loss from monopoly? a. H b. J c. A+B+C+D+F+I+J+H d. J+H

d. J+H

If the market starts in equilibrium at point Z in panel (b), a decrease in demand will ultimately lead to a. more firms in the industry but lower levels of output for each firm. b. a new long-run equilibrium at point X in panel (b). c. lower prices once the new long-run equilibrium is reached. d. fewer firms in the market.

d. fewer firms in the market.

Accounting profits are typically: greater than economic profits because the former do not take explicit costs into account. equal to economic profits because accounting costs include all opportunity costs. smaller than economic profits because the former do not take implicit costs into account. greater than economic profits because the former do not take implicit costs into account

greater than economic profits because the former do not take implicit costs into account

If average total cost is declining, then: marginal cost must be greater than average total cost. the average fixed cost curve must lie above the average variable cost curve. marginal cost must be less than average total cost. total cost must also be declining.

marginal cost must be less than average total cost.

Refer to the above diagram. At output level Q: marginal product is falling. marginal product is rising. marginal product is negative. one cannot determine whether marginal product is falling or rising.

marginal product is falling.

Refer to the below graph. The pure monopolist firm will charge a price of: P1 P2 P3 P4

p3

Refer to the below diagram. At P4, this firm will: shut down in the short run. produce 30 units and incur a loss. produce 30 units and earn only a profit. produce 10 units and earn only a profit

shut down in the short run.

Refer to the above diagram. The vertical distance between ATC and AVC reflects: the law of diminishing returns. the average fixed cost at each level of output. marginal cost at each level of output. the presence of economies of scale.

the average fixed cost at each level of output.

Refer to the below diagram for a purely competitive producer. The firm's short-run supply curve is: the abcd segment and above on the MC curve. the bcd segment and above on the MC curve. the cd segment and above on the MC curve. not shown.

the bcd segment and above on the MC curve.

The basic characteristic of the short run is that: barriers to entry prevent new firms from entering the industry. the firm does not have sufficient time to change the size of its plant. the firm does not have sufficient time to cut its rate of output to zero . a firm does not have sufficient time to change the amounts of any of the resources it employs.

the firm does not have sufficient time to change the size of its plant.

If a variable input is added to some fixed input, beyond some point the resulting extra output will decline. This statement describes: economies and diseconomies of scale. X-inefficiency. the law of diminishing product of labor. the law of diminishing marginal utility.

the law of diminishing product of labor

Refer to the below data. Diminishing marginal product of labor become evident with the addition of the: sixth worker. fourth worker. third worker. second worker.

third worker

Compared to the perfectly competitive firm, a pure monopoly: Is able to use barriers to entry and maintain positive economic profits in the long run Produces an equal amount of output, but charges higher prices to cover all costs in the market Is efficient from society's perspective because it has big plants and it uses the newest possible production technology Will always become competitive in the long run because positive economic profits will induce competitors into the market

Is able to use barriers to entry and maintain positive economic profits in the long run

Refer to the below diagram for a purely competitive producer. The lowest price at which the firm should produce (as opposed to shutting down) is: P1. P2. P3. P4.

P2.

Which of the following is correct? There is no relationship between MP and MC. When AP is rising MC is falling, and when AP is falling MC is rising. When MP is rising MC is rising, and when MP is falling MC is falling. When MP is rising MC is falling, and when MP is falling MC is rising.

When MP is rising MC is falling, and when MP is falling MC is rising

A profit-maximizing monopoly will charge a price of a. P2. b. P4. c. P1. d. P3.

a.P2

An oligopoly a. is a price taker. b. has many firms rather than just one firm or a few firms. c. is a type of imperfectly competitive market. d. has a concentration ratio of less than 50 percent.

c. is a type of imperfectly competitive market.

Assume a firm in a competitive industry is producing 800 units of output, and it sells each unit for $6. Its average total cost is $4. Its profit is a. $8,000. b. $3,200. c. $1,600. d. $1,600.

$1,600

Refer to the below data. The average total cost of producing 3 units of output is: $14. $12. $13.50. $16.

$16

Suppose that a business incurred implicit costs of $200,000 and explicit costs of $1 million in a specific year. If the firm sold 4,000 units of its output at $300 per unit, its accounting profits were: $100,000 and its economic profits were zero. $200,000 and its economic profits were zero. $100,000 and its economic profits were $100,000. zero and its economic loss was $200,000.

$200,000 and its economic profits were zero.

Refer to the below data. The total variable cost of producing 5 units is: $61. $48. $37. $24

$37

A firm has a fixed cost of $500 in its first year of operation. When the firm produces 100 units of output, its total costs are $4,500. The marginal cost of producing the 101st unit of output is $300. What is the total cost of producing 101 units? a.$4,800 b. $46.53 c. $5,300 d. $800

$4,800

The table below shows the price and cost information for a firm that operates in a perfectly competitive market. a. ​$30. b. ​$5. c. ​$6. d. ​$36.

$6

The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. Based up on the information shown, what are total costs for Bearclaws, given that it maximizes profits? . ​$784. b. ​$980. c. ​$490. d. ​$700.

$700

Refer to the below data. The average fixed cost of producing 3 units of output is: $8. $7.40. $5.50. $6.

$8

Refer to the below data. The marginal cost of producing the sixth unit of output is: $24. $12. $16. $8.

$8

Based on the graph below, what is the difference between the perfectly competitive equilibrium level of output and the pure monopolist equilibrium level of output? 0 20 70 90

20

What is total output when 1 worker is hired? a. ​40 b. 45 c. ​0 d. ​85

40

Based on the diagram below, what is the difference between the perfectly competitive level of output and the pure monopolist level of output? 0 20 50 100

50

Compared with perfectly competitive equilibrium, the welfare loss of monopoly is the area of: BCA AEF ACE DBC

ACE

Drug companies are allowed to be monopolists in the drugs they discover in order to a. increase the availability of expensive but useful medications. b. increase the overall welfare of society through better health because drug companies continually produce better medications. c. encourage research. d. All of the above are correct.

All of the above are correct

Which of the below shows the correct relationship between demand and marginal revenue? A B C D

B

Refer to the below diagram. At output level Q total fixed cost is: 0BEQ. BCDE. 0BEQ - 0AFQ. 0CDQ

BCDE.

Refer to the below diagram. At the profit-maximizing output, total fixed cost is equal to: 0AHE. 0BGE. 0CFE. BCFG

BCFG

Refer to the below graph. The monopolist's profits: Will be equal to the area P1P3AE Will be equal to the area P2P3B Will be equal to the area P1P3AC Cannot be determined from the information given

Cannot be determined from the information given

Suppose that a monopolist calculates that at present output and sales, marginal cost is $1.00 and marginal revenue is $2.00. He or she could maximize profits by: Decreasing price and increasing output Increasing price and decreasing output Decreasing price and leaving output unchanged Decreasing output and leaving prices unchanged

Decreasing price and increasing output

Refer to the below diagram. To maximize profit this firm will produce: K units at price C. D units at price J. E units at price A. E units at price B

E units at price A.

Which of the following definitions is correct? Accounting profit + economic profit = normal profit. Economic profit - accounting profit = explicit costs. Economic profit = accounting profit - implicit costs. Economic profit - implicit costs = accounting profits.

Economic profit = accounting profit - implicit costs.

Refer to the below graph. This monopolist: Has a loss per unit equal to DE Has total fixed costs equal to area BEFC Earns economic profit equal to the area of ABED should set the price at 0C.

Has a loss per unit equal to DE

The profit-maximizing monopolist will usually set a price Equal to marginal revenue Where demand is unitary-elastic In the elastic portion of the demand curve In the inelastic portion of the demand curve

In the elastic portion of the demand curve

Suppose that a monopolist calculates that at present output and sales levels, marginal revenue is $1.00 and marginal cost is $2.00. He or she could maximize profits or minimize losses by: Decreasing price and increasing output Increasing price and decreasing output Decreasing price and leaving output unchanged Decreasing output and leaving price unchanged

Increasing price and decreasing output

Many people believe that monopolies charge any price they want to without affecting sales. Instead, the output level for a profit-maximizing monopoly is determined by: Marginal cost = demand Marginal revenue = demand Average total cost = demand Marginal cost = marginal revenue

Marginal cost = marginal revenue

Which is true with respect to the demand of a monopolist? Demand is perfectly inelastic Price increases as the output of the firm increases Marginal revenue increases as price decreases Marginal revenue is less than price

Marginal revenue is less than price

In the figure below: Triangle ABC represents the welfare loss to the society because of the monopoly in the market If the firm is producing an amount QC (point C), it is maximizing profit because MC = AC at that point Point B, where MR = MC, represents the point where the profit is maximized Point A, where MR = AC, represents the point where the difference between total revenue and total cost is the largest

Point B, where MR = MC, represents the point where the profit is maximized

A purely competitive firm, as shown below, will face what kind of change in profits over the long run, assuming industry demand is constant? Profits will increase Profits will decrease Profits will be unchanged Cannot be decided from the information given

Profits will decrease

A profit-maximizing monopolist facing the situation shown in the graph below for long run should: Shut down and exit the market Continue producing to minimize losses Continue producing to make economic profits Continue producing as long as price is greater than marginal cost

Shut down and exit the market

f firms are losing money in a purely competitive industry, then in the long run this situation will shift the industry: Demand curve to the right, and the market price will increase Supply curve to the left, and the market price will increase Supply curve to the right, and the market price will decrease Demand curve to the left, and the market price will decrease

Supply curve to the left, and the market price will increase

If firms enter a purely competitive industry, then in the long run this change will shift the industry: Demand curve to the left, and the market price will decrease Demand curve to the right, and the market price will increase Supply curve to the right, and the market price will decrease Supply curve to the left, and the market price will increase

Supply curve to the right, and the market price will decrease

Refer to the below graphs. Which statement is true? The firm will increase production The firm is experiencing economic losses The firm is breaking even The firm is making economic profit

The firm is experiencing economic losses

Refer to the below graph. Assume the market is monopolistic competition. In the long run, the profits of one firm:

Will be equal to the area P1P3AE Will be equal to the area P2P3B Will be equal to the area P1P3AC Will be 0

Refer to the below diagram. At the profit-maximizing output, the firm will realize: a loss equal to BCFG. a loss equal to ACFH. a profit of ACFH. a profit of ABGH.

a profit of ABGH.

Mr. Rogers sells colored pencils. The colored-pencil industry is competitive. Mr. Rogers hires a business consultant to analyze his company's financial records. The consultant recommends that Mr. Rogers increase his production. The consultant must have concluded that Mr. Roger's a. marginal revenue exceeds his marginal cost. b. marginal revenue exceeds his total cost. c. marginal cost exceeds his marginal revenue. d. total revenues equal his total economic costs.

a. marginal revenue exceeds his marginal cost.

A firm in a competitive market has the following cost structure: What is the lowest price at which this firm might choose to operate? a. $3 b. $4 c. $5 d. $2

a. $3

When new firms have an incentive to enter a competitive market, their entry will a. drive down profits of existing firms in the market. b. increase the price of the product. c. increase demand for the product. d. shift the market supply curve to the left.

a. drive down profits of existing firms in the market.

Laura is a gourmet chef who runs a small catering business in a competitive industry. Laura specializes in making wedding cakes. Laura sells 20 wedding cakes per month. Her monthly total revenue is $5,000. The marginal cost of making a wedding cake is $200. In order to maximize profits, Laura should a. make more than 20 wedding cakes per month. b. make fewer than 20 wedding cakes per month. c. continue to make 20 wedding cakes per month. d. We do not have enough information to answer the question.

a. make more than 20 wedding cakes per month.

A competitive market is in long-run equilibrium. If demand increases, we can be certain that price will a. rise in the short run. Some firms will enter the industry. Price will then fall to reach the new long-run equilibrium. b. not rise in the short run because firms will enter to maintain the price. c. rise in the short run. Some firms will enter the industry. Price will then rise to reach the new long-run equilibrium. d. fall in the short run. All, some, or no firms will shut down, and some of them will exit the industry. Price will then rise to reach the new long-run equilibrium.

a. rise in the short run. Some firms will enter the industry. Price will then fall to reach the new long-run equilibrium.

When price is greater than marginal cost for a firm in a competitive market, a. there are opportunities to increase profit by increasing production. b. the firm must be minimizing its losses. c. marginal cost must be falling. d. the firm should decrease output to maximize profit.

a. there are opportunities to increase profit by increasing production.

A sunk cost is one that a. was paid in the past and will not change regardless of the present decision. b. changes as the level of output changes in the short run. c. has the most impact on profit-making decisions. d. should determine the rational course of action in the future.

a. was paid in the past and will not change regardless of the present decision.

A firm has a fixed cost of $500 in its first year of operation. When the firm produces 100 units of output, its total costs are $3,500. When it produces 101 units of output, its total costs are $3,750. What is the marginal cost of producing the 101st unit of output? a. $250 b. $350 c. $340.91 d. $275

a.$250

The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. Based up on the information shown, what is total revenue for Bearclaws, given that it maximizes profits? a. ​$980. b. ​$1080. c. ​$900. d. ​$490.

a.980

Suppose a firm in a competitive industry has the following cost curves: a. Individual firms will earn positive economic profits in the short run, which will entice other firms to enter the industry. b. Nothing. The price is consistent with zero economic profits, so there is no incentive for firms to enter or exit the industry. c. Because the price is below the firm's average variable costs, the firms will shut down. d. Individual firms will earn negative economic profits in the short run, which will cause some firms to exit the industry.

a.Individual firms will earn positive economic profits in the short run, which will entice other firms to enter the industry.

Which panel could represent the demand curve facing a local cable television provider if that firm in a monopolist? a. Panel A b. Panel B c. Panel C d. Panel D

a.Panel A

A firm produces 300 units of output at a total cost of $1,000. If fixed costs are $100, a. average variable cost is $3. b. average total cost is $5. c. average total cost is $4. d. average fixed cost is $10.

a.average variable cost is $3

Suppose a firm in a competitive industry has the following cost curves: a. Individual firms will earn positive economic profits in the short run, which will entice other firms to enter the industry. b. Individual firms will earn negative economic profits in the short run, which will cause some firms to exit the industry. c. Nothing. The price is consistent with zero economic profits, so there is no incentive for firms to enter or exit the industry. d. Because the price is below the firm's average variable costs, the firms will shut down.

b. Individual firms will earn negative economic profits in the short run, which will cause some firms to exit the industry.

Average total cost is very high when a small amount of output is produced because a. marginal product is high. b. average fixed cost is high. c. average variable cost is high. d. marginal cost is high.

b. average fixed cost is high.

The table below shows the price and cost information for a firm that operates in a perfectly competitive market. a. ​3 units. b. ​5 units. c. ​4 units. d. ​6 units.

b.5 units

As new firms enter a monopolistically competitive market, profits of existing firms a.. rise, and product diversity in the market decreases. b. decline, and product diversity in the market decreases. c. decline, and product diversity in the market increases. d. rise, and product diversity in the market increase

c. decline, and product diversity in the market increases.

A monopolistically competitive market a. is imperfectly competitive, and all imperfectly competitive markets are monopolistically competitive. b. is not imperfectly competitive. c. is imperfectly competitive, but not all imperfectly competitive markets are monopolistically competitive. d. is imperfectly competitive, whereas an oligopolistic market is not imperfectly competitive.

c. is imperfectly competitive, but not all imperfectly competitive markets are monopolistically competitive.

Refer to the below data. The marginal product of the sixth worker is: a.180 units of output. b.30 units of output. c.15 units of output. d.negative.

c. 15 units of output

Mrs. Smith operates a business in a competitive market. The current market price is $8.50. At her profit-maximizing level of production, the average variable cost is $8.00, and the average total cost is $8.25. Mrs. Smith should a. continue to operate in the short run but shut down in the long run. b. shut down in both the short run and long run. c. continue to operate in both the short run and long run. d. shut down her business in the short run but continue to operate in the long run.

c. continue to operate in both the short run and long run.

Entry and exit drive each firm in a monopolistically competitive market to a point of tangency between its a. marginal revenue curve and its average total cost curve. b. marginal revenue curve and its total cost curve. c. demand curve and its average total cost curve. d. demand curve and its total cost curve.

c. demand curve and its average total cost curve.

A benefit of a monopoly is a. decreasing long-run average total costs. b. a wide variety of similar products. c. greater creativity by authors who can copyright their novels. d. lower prices.

c. greater creativity by authors who can copyright their novels.

By comparing marginal revenue and marginal cost, a firm in a competitive market is able to adjust production to the level that achieves its objective, which we assume to be a. minimizing average total cost. b. maximizing total revenue. c. maximizing profit. d. minimizing variable cost.

c. maximizing profit.

In the above figure, curves 1, 2, 3, and 4 represent the: a.ATC, MC, AFC, and AVC curves respectively. b.MC, AFC, AVC, and ATC curves respectively. c.MC, ATC, AVC, and AFC curves respectively. d.ATC, AVC, AFC, and MC curves respectively.

c.MC, ATC, AVC, and AFC curves respectively

If the monopoly firm is currently producing Q3 units of output, then a decrease in output will necessarily cause profit to a. increase as long as the new level of output is at least Q2. b. increase as long as the new level of output is at least Q1. c. decrease. d. remain unchanged.

c.decrease

When the market for a good is a natural monopoly, this results in a. ​increased entry by new producers of the good. b. ​improved product choice for consumers. c. ​dominance by a single producer of the good. d. ​many producers charging low prices for the good.

c.dominance by a single producer of the good

An individual firm in a perfectly competitive market: cannot affect market price. is very concerned with its competitors' marketing decisions. may be able to increase its price without losing sales. will decrease the price of its output if it produces too much.

cannot affect market price.

Refer to the below data. The profit-maximizing output for this firm: is 3. is 4. is 5. cannot be determined from the information given.

cannot be determined from the information given.

Authors are allowed to be monopolists in the sale of their books in order to a. promote a society in which people think for themselves and learn from whichever books they please. b. correct for the negative externalities that the Internet and television impose. c. satisfy literary advocacy groups that exercise their lobbying power. d. None of the above is correct.

d. None of the above is correct.

As Bubba's Bubble Gum Company adds workers while using the same amount of machinery, some workers may be underutilized because they have little work to do while waiting in line to use the machinery. When this occurs, Bubba's Bubble Gum Company encounters a. increasing marginal product. b. economies of scale. c. diseconomies of scale. d. diminishing marginal product.

d. diminishing marginal product

Suppose that a firm in a competitive market has the following cost curves: a. negative economic profits in the short run but remain in business. b. negative economic profits and shut down. c. positive economic profits in the short run. d. zero economic profits in the short run.

d. zero economic profits in the short run.

Suppose that a business incurred implicit costs of $500,000 and explicit costs of $5 million in a specific year. If the firm sold 100,000 units of its output at $50 per unit, its accounting: a.profits were $100,000 and its economic profits were zero. b.losses were $500,000 and its economic losses were zero. c.profits were $500,000 and its economic profits were $1 million. d.profits were zero and its economic losses were $500,000.

d.profits were zero and its economic losses were $500,000

Refer to the below diagram for a purely competitive producer. If product price is P3: the firm will maximize profit at point d. the firm will earn an economic profit. economic profits will be zero. new firms will enter this industry.

economic profits will be zero.

A production function describes a. the relationship between cost and output. b. the minimal cost of producing a given level of output. c. how a firm maximizes profits. d. how a firm turns inputs into output.

how a firm turns inputs into output

To economists, the main difference between the short run and the long run is that: a.the law of diminishing returns applies in the long run, but not in the short run. b.in the long run all resources are variable, while in the short run at least one resource is fixed. c.fixed costs are more important to decision making in the long run than they are in the short run. d.in the short run all resources are fixed, while in the long run all resources are variable.

in the long run all resources are variable, while in the short run at least one resource is fixed.

Assume a certain firm regards the number of workers it employs as variable but regards the size of its factory as fixed. This assumption is often realistic a.in the long run but not in the short run. b. both in the short run and in the long run. c. neither in the short run nor in the long run. d. in the short run but not in the long run.

in the short run but not in the long run.

The above diagram shows the short-run average total cost curves for five different plant sizes of a firm. The shape of each individual curve reflects: increasing marginal product, followed by diminishing marginal product. economies of scale, followed by diseconomies of scale. constant costs. increasing costs, followed by decreasing costs.

increasing marginal product, followed by diminishing marginal product

Refer to the below data. The marginal product of the fourth worker: is 5. is 7. is 71/2. cannot be calculated from the information given.

is 5

Refer to the above diagram. At output level Q average fixed cost: is equal to EF. is equal to QE. is measured by both QF and ED. cannot be determined from the information given.

is measured by both QF and ED.

A monopoly is an inefficient way to produce a product because a. it faces a downward-sloping demand curve. b. the cost to the monopolist of producing one more unit exceeds the value of that unit to potential buyers. c. it can earn both short-run and long-run profits. d.it produces a smaller level of output than would be produced in a competitive market.

it produces a smaller level of output than would be produced in a competitive market.

If a firm decides to produce no output in the short run, its costs will be: its marginal costs. its fixed plus its variable costs. its fixed costs. zero.

its fixed costs

Because a monopolist must lower its price in order to sell another unit of output, a. marginal revenue is less than price. b. total revenue increases as price increases. c. long-term economic profits will be zero. d. average revenue is less than price.

marginal revenue is less than price

The demand curve in a purely competitive industry is ______, while the demand curve to a single firm in that industry is ______. perfectly inelastic, perfectly elastic downsloping, perfectly elastic downsloping, perfectly inelastic perfectly elastic, downsloping

perfectly inelastic, perfectly elastic

Refer to the below diagram. At P3, this firm will: produce 14 units and earn a profit. produce 62 units and earn a profit. produce 40 units and incur a loss. shut down in the short run

produce 40 units and incur a loss.

Refer to the below diagram. At P2, this firm will: produce 44 units and realize a positive profit. produce 44 units and earn only a 0 profit. produce 66 units and earn only a 0 profit. shut down in the short run

produce 44 units and realize a 0 profit.

In the above diagram curves 1, 2, and 3 represent: average variable cost, marginal cost, and average fixed cost respectively. total variable cost, total fixed cost, and total cost respectively. total fixed cost, total variable cost, and total cost respectively. marginal product, average variable cost, and average total cost respectively.

total fixed cost, total variable cost, and total cost respectively.

Refer to the below data. When two workers are employed: total product is 20. total product is 18. average product is 10. total product cannot be determined from the information given.

total product is 18

Economic welfare is generally measured by (i) profit. (ii) total surplus. (iii) the price consumers pay for the product. a. (i), (ii), and (iii) b. (i) and (ii) only c. (ii) and (iii) only d. (ii) only

total surplus.