Microeconomics Final Exam
price floor
A legally determined minimum price that sellers must receive is known as a:
marginal cost = marginal revenue
A monopolist will maximize profit at the level of output where:
A single seller of a good or service that does not have a close substitute
A monopoly is a market structure that is characterized by:
20 years
A patent gives its holder the exclusive right to a product for a period of ___ from the date the patent is filed with the government
The total tax paid divided by total income
Average tax rate is:
there will be deadweight loss
Because the monopolist faces . downward sloping demand curve:
price ceiling exist
Black markets may arise if:
Revenues mainly redistributed from the Federal government, sales tax, and property tax
Corresponds to revenues at the state level of government
The ability of a firm to charge a price greater than marginal cost
Definition of market power
economies of scale
Downward sloping part of the long run average total cost curve is where the firm is achieving:
using regulation to protect consumers
Governments deal with natural monopolies by:
The rate at which income is taxed increases as income increases.
How is the US federal income tax structured?
budget surplus
If the federal government's expenditures are less than its revenue, there is a __________.
Monopoly
In which of the following market structures is the firm's demand curve the same as the market demand for the product?
antitrust laws
Laws aimed at promoting competition among firms are known as:
most likely to occur in markets where fixed costs are large relative to variable cost
Natural monopoly is
social security and medicare taxes
Payroll taxes include:
Dividing consumers into two or more groups and charging different prices to each group.
Price discrimination is the practice of:
The exclusive right to a new product
Rights given to the holder of the patent
the actual division of the tax between buyers and sellers in a market
Tax incidence refers to __
tax incidence
The actual division of the tax burden between buyers and sellers is known as:
progressive tax
The federal income tax in the US is a ___
higher than
The monopolist charges a price that is __________ the perfectly competitive industry.
Federal revenues have ranged between 25 and 30 percent GDP for a long time
US government revenues
Buyers who must leave the market because they can't afford to pay the higher price and sellers who must leave the market because they can't produce at a lower price.
What does a deadweight loss from a tax consist of?
The usefulness of a product increases with the number of consumers who use it
What happens when network externalities are present?
a barrier to entry for competing technologies due to high switching costs
When network externalities are present it may create:
smaller than, more than half
When the elasticity of demand for a product is __________ the elasticity of supply, consumers pay __________ of the tax on the product.
Monopoly causes a reduction in consumer surplus
Which of the following is an effect of a monopoly?
The fraction of each additional dollar of income that must be paid in taxes.
Which of the following is the marginal tax rate?
Black market
Which of the following terms corresponds to a market where buying and selling take place at prices that violate government price regulations?
No deadweight Loss
a tax is efficient if it imposes __
2nd Degree Discimination
consumers are charged different prices based on characteristics of their purchase, such as the quantity they purchase
1st/Perfect Degree Discrimination:
consumers are charged the maximum price they are willing to pay
3rd Degree Discrimination
different groups of consumers are charged different prices based on their own attributes (such as age, gender, or location)
zero or positive economic profit
in the long run, the monopolist can earn:
average total cost curve is decreasing
natural monopoly happens when the
a percentage of income
what does income tax refer to?