Additional microeconomics final Questions

question

When marginal revenue is positive, total revenue __________ when output increases and demand is __________

answer

increases
elastic

question

In a production possibilities frontier graph, the cost of producing more units of a good is measured by

answer

amount of the other good or service that must be forgone

question

Giving in to the demand of protestors, suppose french government reduces the tax on gasoline by 15 percent. Neither the demand for gasoline nor the supply of gasoline is perfectly elastic or inelastic. As a result of the tax cut, the price for a gallon of gas paid by buyers...

answer

falls by less than 15 percent

question

If the percentage change in price is 10 percent and the demand is inelastic, then the percentage change in the quantity demanded

answer

is larger than 10 percent

question

When a firm maximizes its profit, which of the following is correct for firms in a monopolistic competition and perfect competition?

answer

P = MR = MC for firms in perfect competition and P > MR = MC for firms in monopolistic competition.

question

A monopoly will never operate on the ______ portion of its demand curve because an increase in price _____ total revenue and _______ total cost, thereby increasing the firms total profit

answer

Inelastic
Increases
Decreases

question

Crest toothpaste produced by proctor and gamble is produced in a ______ market. This means proctor and gamble must advertise in order to______

answer

monopolistically competitive
differentiate their product

question

Product differentiation involves making a product that is...

answer

slightly different from the products of competing firms

question

The slope of the budget line shows...

answer

the opportunity cost of the good measured along the x axis

question

Using Gabriel's budget line and indifference curves between horseback riding lessons and baseball lessons, and then changing the prices of each activity holding his income constant, what is derived?

answer

Gabriel's demand curve for each activity

question

An example of someone bearing the burden of a negative production externality would be what?

answer

Living downwind from a smelly feedlot where pigs are raised

question

If the cross price elasticity of demand for DVD players and DVDs equals -2, then the products are...

answer

Complements

question

In the long run, a firm in monopolistic competition produces at an output level where ...

answer

P = ATC and MR = MC

question

Suppose a single price monopoly sells 3 units of a good at $20 per unit. If the monopoly sells 4 units, the total revenue increases to $72. What is the marginal revenue of the fourth unit.

answer

question

If an external benefit is present in the consumption of a good or service, then...

answer

the marginal social benefit is greater than the marginal private benefit

question

When the percentage change in the quantity demanded exceeds the percentage change in price, then demand is

answer

elastic

question

The opportunity cost of producing one more unit of a good is calculated by dividing the

answer

decrease in the quantity of the other good by the increase in the quantity of the good whose opportunity cost we're calculating.

question

A consumer's demand for tuna can be found from an indifference curve diagram by doing what?

answer

allowing the price of tuna to change and observing the different best, affordable levels of tuna

question

Bill owns a lawn−care company in Windermere, Florida, whose cost curves are illustrated in the above figure. The market equilibrium price in this perfectly competitive market equals $32 per lawn mowed. At this price, how many lawns will Bill mow per week?

answer

Where the price on the x axis horizontally intersects with the MC Curve

question

When there is market failure so that a market produces less than the efficient amount, there is a

answer

DWL

question

The negative slope of the production possibilities frontier represents the idea

answer

of tradeoffs, that in order to produce more of one good, the nation must produce less of another.

question

In the long−run, a firm in monopolistic competition produces at an output level where

answer

P = ATC and MR = MC.

question

When marginal revenue is positive, total revenue ________ when output increases and demand is ________.

answer

increases; elastic

question

A monopoly will never operate on the _____ portion of its demand curve because an increase in price _____ total revenue and ____ total cost, thereby increasing the firm's total profit.

answer

inelastic; increases; decreases

question

If the wheat industry is perfectly competitive with a market price of $4 per bushel and Farmer Brown charged $5 per bushel, how many bushels would Farmer Brown sell?

answer

none

question

The price elasticity of demand measures which of the following?

answer

how responsive the quantity demanded is to changes in price

question

Neither the demand for gasoline nor the supply of gasoline is perfectly elastic or inelastic. If the federal government eliminated the 18.4 cents per gallon gasoline tax, the price paid by buyers would

answer

decrease by less than 18.4 cents.

question

A competitive market with no externalities is efficient when it is in equilibrium because

answer

marginal benefit equals marginal cost.

question

If a monopolistically competitive seller's marginal cost is $3.56, the firm will increase its output if

answer

its marginal revenue is more than $3.56.

question

What must be true for a consumer to buy a good or service?

answer

The price must be equal to or less than the marginal benefit.

question

Alice and Gene work in the mail room, sorting and delivering mail. In order for them to benefit from specialization and trade, Alice must

answer

have a comparative advantage in one task and Gene must have a comparative advantage in the other task.

question

many close substitutes means the demand is most likely

answer

elastic

question

When a firm maximizes its profit, which is correct for firms in monopolistic competition and perfect competition?

answer

P = MR = MC for firms in perfect competition and P > MR = MC for firms in monopolistic competition.

question

If consumers buy a large number of
plug−in
electric cars, the equilibrium price of electricity will ________ and the equilibrium quantity of electricity will ________.

answer

rise; increase

question

If an external benefit is present in the consumption of a good or service, then

answer

the marginal social benefit is greater than the marginal private benefit.

question

Suppose two neighborhoods (A and B) have identical housing, but neighborhood A has a strictly enforced deed restriction that prohibits homeowners from parking junk cars in the front yard. If houses in neighborhood A sell for $105,000 and houses in neighborhood B sell for $100,000, how would an economist value the external cost of visible junk cars, per house?

answer

5000

question

The marginal product of labor is the change in

answer

total output from employing one more worker.

question

A natural monopoly

answer

is a firm than can supply the market at lower cost than two or more firms.

question

A single−price monopoly transfers

answer

consumer surplus to producers.

question

The shampoo industry is constantly coming out with new products. The reason is that when a firm introduces a new shampoo into the market, the demand for the shampoo becomes ________ temporarily and economic profit ________.

answer

less elastic; increases

1 of 40

question

When marginal revenue is positive, total revenue __________ when output increases and demand is __________

answer

increases
elastic

question

In a production possibilities frontier graph, the cost of producing more units of a good is measured by

answer

amount of the other good or service that must be forgone

question

answer

falls by less than 15 percent

question

If the percentage change in price is 10 percent and the demand is inelastic, then the percentage change in the quantity demanded

answer

is larger than 10 percent

question

When a firm maximizes its profit, which of the following is correct for firms in a monopolistic competition and perfect competition?

answer

P = MR = MC for firms in perfect competition and P > MR = MC for firms in monopolistic competition.

question

A monopoly will never operate on the ______ portion of its demand curve because an increase in price _____ total revenue and _______ total cost, thereby increasing the firms total profit

answer

Inelastic
Increases
Decreases

question

Crest toothpaste produced by proctor and gamble is produced in a ______ market. This means proctor and gamble must advertise in order to______

answer

monopolistically competitive
differentiate their product

question

Product differentiation involves making a product that is...

answer

slightly different from the products of competing firms

question

The slope of the budget line shows...

answer

the opportunity cost of the good measured along the x axis

question

Using Gabriel's budget line and indifference curves between horseback riding lessons and baseball lessons, and then changing the prices of each activity holding his income constant, what is derived?

answer

Gabriel's demand curve for each activity

question

An example of someone bearing the burden of a negative production externality would be what?

answer

Living downwind from a smelly feedlot where pigs are raised

question

If the cross price elasticity of demand for DVD players and DVDs equals -2, then the products are...

answer

Complements

question

In the long run, a firm in monopolistic competition produces at an output level where ...

answer

P = ATC and MR = MC

question

Suppose a single price monopoly sells 3 units of a good at $20 per unit. If the monopoly sells 4 units, the total revenue increases to $72. What is the marginal revenue of the fourth unit.

answer

question

If an external benefit is present in the consumption of a good or service, then...

answer

the marginal social benefit is greater than the marginal private benefit

question

When the percentage change in the quantity demanded exceeds the percentage change in price, then demand is

answer

elastic

question

The opportunity cost of producing one more unit of a good is calculated by dividing the

answer

decrease in the quantity of the other good by the increase in the quantity of the good whose opportunity cost we're calculating.

question

A consumer's demand for tuna can be found from an indifference curve diagram by doing what?

answer

allowing the price of tuna to change and observing the different best, affordable levels of tuna

question

answer

Where the price on the x axis horizontally intersects with the MC Curve

question

When there is market failure so that a market produces less than the efficient amount, there is a

answer

DWL

question

The negative slope of the production possibilities frontier represents the idea

answer

of tradeoffs, that in order to produce more of one good, the nation must produce less of another.

question

In the long−run, a firm in monopolistic competition produces at an output level where

answer

P = ATC and MR = MC.

question

When marginal revenue is positive, total revenue ________ when output increases and demand is ________.

answer

increases; elastic

question

A monopoly will never operate on the _____ portion of its demand curve because an increase in price _____ total revenue and ____ total cost, thereby increasing the firm's total profit.

answer

inelastic; increases; decreases

question

If the wheat industry is perfectly competitive with a market price of $4 per bushel and Farmer Brown charged $5 per bushel, how many bushels would Farmer Brown sell?

answer

none

question

The price elasticity of demand measures which of the following?

answer

how responsive the quantity demanded is to changes in price

question

answer

decrease by less than 18.4 cents.

question

A competitive market with no externalities is efficient when it is in equilibrium because

answer

marginal benefit equals marginal cost.

question

If a monopolistically competitive seller's marginal cost is $3.56, the firm will increase its output if

answer

its marginal revenue is more than $3.56.

question

What must be true for a consumer to buy a good or service?

answer

The price must be equal to or less than the marginal benefit.

question

Alice and Gene work in the mail room, sorting and delivering mail. In order for them to benefit from specialization and trade, Alice must

answer

have a comparative advantage in one task and Gene must have a comparative advantage in the other task.

question

many close substitutes means the demand is most likely

answer

elastic

question

When a firm maximizes its profit, which is correct for firms in monopolistic competition and perfect competition?

answer

P = MR = MC for firms in perfect competition and P > MR = MC for firms in monopolistic competition.

question

If consumers buy a large number of
plug−in
electric cars, the equilibrium price of electricity will ________ and the equilibrium quantity of electricity will ________.

answer

rise; increase

question

If an external benefit is present in the consumption of a good or service, then

answer

the marginal social benefit is greater than the marginal private benefit.

question

answer

5000

question

The marginal product of labor is the change in

answer

total output from employing one more worker.

question

A natural monopoly

answer

is a firm than can supply the market at lower cost than two or more firms.

question

A single−price monopoly transfers

answer

consumer surplus to producers.

question

answer

less elastic; increases

Order an Essay Now & Get These Features For Free:

Turnitin Report

Formatting

Title Page

Citation

Outline

Place an Order