Microeconomics final
Refer to the above diagram for a monopolistically competitive firm in short run equilibrium. This firms profit maximizing price will be
$16
Refer the the above data, the firms optimal amount of R&D spending is
$80 million
Refer to diagram. At the profit maximizing output, total revenue will be
0AHE
Answer on the basis of the relationships shown in the four figures below. The amount of Y is directly related to the amount of X in:
1 only
Refer to the above diagram for a monopolistically competitive firm in short run equilibrium. The profit maximizing output for this firm will be
160
Refer to the above diagram for a pure monopolist. Monopoly price will be
C.
Refer to the above diagram for a pure monopolist. Monopoly profit will be
Cannot be determined from the info given
"Spillovers" or "externalities" weaken the efficiency of the market system bc they
Cause certain goods to be overproduced or underproduced
The long run
The ability of the firm to change its plant size
Oppirtunity Cost
The amount of one product that must be given up to produce one more unit of another product
price discrimination
The selling of a given product at different prices that don't reflect cost differences
A pure monopolist:
Will realize an economic profit if price exceeds ATC at the equilibrium output
Technological advance is three-step process involving
invention, innovation, diffusion
The demand curve faced by a pure monopolist
is less elastic than that faced by a single purely competitive firm.
A pure monopolist demand curve is
Downsloping
In purchasing products A and B, a consumer is in equilibrium when
MUa/Pa = MUb/Pb
monopolistic competition
Many firms producing differentiated products
Which is correct?
A purely competitive firm is a "price taker" while a monopolist is a "price maker"
Refer to above diagram. A price of $20 in this market will results in
A shortage of 100 units
mutual interdependence that characterizes oligopoly arise bc
A small number of firms produce a large proportion of industry output
If the price of product A is 50 cents the firm will realize
An economic profit of $2
The law of diminishing returns indicates
As extra units of a variable resource are added to a fixed resource, a marginal product will decline beyond some point
short run
At least one fixed resource
Which of the following is a shortcoming if the market system
Certain goods will not be produced bc there is no way of excluding nonpaying (free-rider) individuals from the associated benefits
If there is significant economies of scale in an industry, then:
Competitors will follow a price cut but ignore a price increase
Broadly defined, technological advance
Comprises new and improved foods and services and new and improved ways of producing of distributing them
Refer to the above diagram. This economy will experience unemployment if it produces at point:
D.
In deciding on an optimal amount and type of research and development, firms should adhere to the rule: Expand R&D until:
Expected rate of return equals the interest rate
If we plotted the above data on a graph with R&D expenditures in the horizontal (maybe vertical??) axis the:
Expected-rate-of-return-curve would slope downward
Refer to the above diagram for a pure monopolist. Monopoly output will be
F.
Refer to above diagram. Which technique is most efficient in producing A?
IV
If we plotted the above data on a graph with R&D expenditures in the horizontal axis the:
Interest-rate-cost-of-funds-curve would be horizontal
The modern view of technological advance is that it
Is an internal element of capitalism, occurring in responses to profit incentives
In the short run, a purely competitive seller will shut down if product price:
Is less than average variable cost (AVC) at all outputs
Refer to above data. At $100 million of R&D expenditures, the
Marginal cost of R&D exceeds the marginal benefit
Monopolostic Competition and oligopoly are alike in that
Nonprice competition is common to both
Technological advance is shown as a(n)
Outward shift of a production possibilities curve
The term oligopoly indicates
a few firms producing either a differentiated or a homogeneous product.
Refer to above diagram. A price of $60 in this market will result in
a surplus of 100 units.
nonprice competition
advertising, product promotion, and changes in the real or perceived characteristics of a product
The kinked-demand curve of an oligopolist is based on the assumption that
competitors will follow a price cut but ignore a price increase.
If a pure monopolist is producing at that output where P = ATC, then:
its economic profits will be zero.
Monopolistically competitive firms
may realize either profits or losses in the short run but realize normal profits in the long run.
For an imperfectly competitive firm:
the marginal revenue curve lies below the demand curve because any reduction in price applies to all units sold.
Economics
the social science concerned with the efficient use of scarce resources to achieve the maximum satisfaction of economic wants
What do economies of scale, the ownership of essential raw materials, and patents have in common?
they are all barriers to entry
The automobile, household appliance, and automobile tire industries are all illustrations of:
differentiated oligopoly
Refer to the diagram. To maximize profits or minimize losses, this firm should produce:
E units at price A
How do entrepreneurs differ from "other innovators?"
Entrepreneurs bear risk; "other innovators" do not
Utility
Satisfaction that a consumer derives from a good or service
