BECO 3310 Post assessment - Assignment Essays

question

A sudden decrease in the market demand in a competitive industry leads to:

answer

losses in the short-run and average profits in the long-run

question

If a firm in a perfectly competitive industry is experiencing average revenues greater than average costs, in the long-run:

answer

some firms will enter the industry and price will fall.

question

Competition:

answer

-requires firms to pursue economies of scale if they exist.
- lowers prices when costs fall
-encourages technical change

question

In a perfectly competitive market industry, firms prices are equal to

answer

-average revenue
-marginal revenue

question

Imagine the market for ice cream. Suppose two events happen simultaneously:
I. The surgeon announces that ice cream is bad for an individual's health.II. The price of milk (an input in the production of ice cream) increases.What happens to the price of ice cream

answer

not enough information is provided

question

An effective price ceiling will lead to a

answer

market shortage

question

Which of the following causes an increase in the demand for labor?

answer

an increase in the price of the good that labor is producing

question

For a steel factory, a decrease in the cost of electricity to the plant will cause the supply curve to:

answer

shift to the right

question

The Marginal Product of Labor is:

answer

the change in total product resulting from an extra unit of labor, holding other factors constant.

question

Which of the following is true if total utility is maximized?

answer

marginal utility is equal to 0

question

In making a decision about its newspaper advertising budget, a manager of a firm should NOT consider:

answer

the previous costs already incurred in developing the newspaper ad.

question

If the benefits of a given choice option are delayed further into the future (all other relevant factors remaining constant), then the present value of the option will:

answer

decrease

question

If a firm is earning negative accounting profits, it implies:

answer

that the firm's economic profits are negative

question

The primary reason people engage in exchange is because

answer

people increase their well-being by specializing

question

Fred works 40 hours a week managing Fred's Convenience Store, without drawing a salary. He could earn $600 a week doing the same work for Bob. Fred's Convenience Store owes its bank $100,000, and Fred has invested $100,000 of his own money. If Fred's accounting profits are $1,000 per week while the interest on his bank debt is $200 per week, his economic profits are:

answer

$200 per week

question

Scarcity can best be defined as a situation in which:

answer

the resources we use to produces goods and services are limited

question

Suppose the marginal product labor is 8 and the marginal product of capital is 2. If the wage rate is $4 and the price of capital is $2, then in order to minimize costs the firm should use:

answer

more labor and less capital

question

When choosing a least-cost production method, the firm considers

answer

-different production technologies to find efficient combinations of inputs
- the marginal products of all inputs.
-the cost of all inputs

question

The total cost of producing one unit is $50. The total cost of producing 2 unites is $75. At a production level of 2 units, the cost function exhibits:

answer

economies of scale

question

Total product refers to the total output produced within a given time frame. What is marginal product?

answer

Marginal product is the additional output generate by the addition of another unit of input

question

At its current output level, a firm's marginal profit is positive. Therefore, it should

answer

Increase output because MR > MC.

question

Which of the following will cause the marginal cost curve of making cigarettes to shift?

answer

a $1 per pack tax on cigarettes

question

Marginal cost is best defined as

answer

the change in total costs that result from selling one more product

question

Mary's Custom Boat Shop can make five kayaks a week at a total cost of $1,000 and is able to sell them all at a price of $250 each. Mary believes she could sell at least six kayaks a week at the price, so considers expanding her operation. She estimates the total cost of producing six kayaks a week would be $1,300. Should Mary expand her operation?

answer

No, the marginal cost of the sixth kayak ($300) is greater than the marginal revenue it will bring ($250), so Mary's profits will go down if she expands.

question

If the price of MP3 players decreases,

answer

The demand for downloading songs will increase.

question

Considering a supply and demand graph with a downward sloping demand curve and a horizontal (perfectly elastic) supply curve. If the demand curve for the good increases, then:

answer

we should expect prices to stay the same, but the quantity supplied will increase.

question

If there is a decrease in the price of good A, which is a complement for good B, then the demand for good B will

answer

increase

question

An increase in the price of steak will probably lead to:

answer

an increase in demand for chicken

question

Which of these claims always true for average fixed costs?

answer

As production increases, average fixed costs will always decline.

question

The law of diminishing marginal returns states that:

answer

the marginal product of a factor eventually diminishes as more of the input is used, holding other inputs fixed

question

The law of diminishing marginal returns

answer

will eventually set into every production process.

question

The opportunity cost of investing all of your savings in a new business is equal to

answer

The rate of return on your savings you could have earned in a comparable investment

question

The opportunity cost of an action is the

answer

Value of the most highly valued alternative action given up

question

Because the resources immediately available for use are limited,

answer

people must make choices about resource use.

question

Which of the following descriptions best captures the meaning of "opportunity cost"?

answer

Opportunity cost is the highest-valued alternative foregone when we make a choice.

question

Perfect competition is a market structure in which

answer

-there are numerous producers.
-there are zero entry barriers.
- producers are price takers.
-all producers produce the same product.

question

When firms in a perfectly competitive market incur economic losses, exit by some firms means the market supply will ________ and price will ________.

answer

decrease; increase

question

In the long-run, perfectly competitive firms produce a level of output such that:

answer

P= MC and P = minimum of AC

question

In the long run, profits will equal zero in a competitive market because of

answer

free entry and exits

question

In the long-run, perfectly competitive firms product at the point where:

answer

P= ATC MR=MC P=MC

question

In a competitive industry with identical firms, long-run equilibrium is characterized by:

answer

MR = MC

question

An individuals value for a good or service is the

answer

the amount of money he or she is willing to pay for it

question

Jim is planning on attending a football game that costs $40. He will have to take the day off from the work losing 8 hours of work. His hourly wage is $10. He estimates it will cost him around $20 for gas and parking at the game. Jim's implicit (opportunity) cost of attending the game equals

answer

$80

question

What happens to price when a good becomes more scarce?

answer

price will increase

question

Which of the following statements best summarizes the law of diminishing marginal returns?

answer

In the short run, as more labor is hired, output increases at a diminishing rate.

question

The economics concept of demand is best described as:

answer

the relationship between prices and the quantity of a product consumers are willing and able to buy at those prices.

question

Which of the following will cause an increase in the supply of a product?

answer

an advancement in technology that reduces costs of production

question

If the total output of cupcakes at Herman's bakery increases from 20 per hour to 30 per hour as he hires the second worker, then:

answer

if the price of each candle is $4, the marginal revenue product (MRP) of the second worker is $40.

question

If there is an expected decrease in the future price of a good, then the near-term demand for the good will:

answer

increase

question

If A and B are complements, an increase in the price of a good A would:

answer

lead to a decrease in demand for B

question

A recent research signified the large health benefits of eating cooked tomatoes. Holding other things constant, this will cause

answer

the demand curve for tomatoes to shift to the right

question

A sunk cost is a cost

answer

incurred in the past that cannot be altered by current decisions.

question

If Happy Trails Airlines loses money by running flights with only a few passengers on board (well below seating capacity), but they still run these flights, it must be because

answer

marginal revenue exceeds marginal cost on those flights.

question

The addition to total cost resulting from the addition of the last unit of output is known as:

answer

marginal cost

question

Mary's Custom Boat Shop can make 5 kayaks a week at a total cost of $1,000 and is able to sell them all at a price of $250 each. Mary believes she could sell at least 6 kayaks a week at the price, so considers expanding her operation. She estimates the total cost of producing 6 kayaks a week would be $1,300. Should Mary expand her operation?

answer

No, the marginal cost of the 6th kayak ($300) is greater than the marginal revenue it will bring ($250), so Mary's profits will go down if she expands.

question

A firm should hire an additional worker if

answer

if the marginal benefit the firm will receive from hiring the worker is larger than the marginal cost of hiring the worker.

question

To think at the margin means to consider

answer

how a small change in a decision affects the outcome of a decision.

question

Assume that studying economics and French are your only 2 activities. If you become more efficient in learning economics but your efficiency in learning French remains constant, then you can

answer

increase your achievement in economics while holding your achievement in French constant.
- increase both your achievement in economics and French.
- increase your achievement in French while reducing your achievement in economics.

question

After graduating from college, Jim had 3 choices, listed in order of preference: (1) Move to Florida from Philadelphia, (2) work in a car dealership in Philadelphia, (3) play soccer for a minor league in Philadelphia. His opportunity cost of moving to Florida includes:

answer

the income he could have earned at the car dealership

question

If in the long run companies in an industry are earning 0 economic profit, we should expect which of the following?

answer

companies will neither enter nor exit the industry, so supply will be unchanged.

question

A company will not shut down in the long run as long as the company's revenue per period is expected to be

answer

greater than or equal to the company's total cost per period

question

If average total cost > average variable cost > price, a profit maximizing firm in a perfectly competitive market should

answer

shut down in the short run

question

A perfectly competitive firm faces a:

answer

perfectly elastic demand function

question

Most student athletes in college do not pay any tuition and are not able to have a full-time job. Which of the following is true:

answer

The forgone money they could have received by working a job is the opportunity cost of choosing to be a student athlete

question

The quantity of iPads that people plan to buy this month likely depends on all of the following EXCEPT:

answer

the technology used to produce an iPad.

question

The quantity supplied of a good or service is the amount that:

answer

producers plan to sell during a given time period at a given price.

question

Suppose a new study is published that documents positive health effects associated with drinking coffee. Which of the following is likely to occur?

answer

The market price of coffee would increaseb. The supply of coffee will remain unchanged

question

If a competitive firm maximizes profits by producing some positive quantity of output (q), which of the following must be true at that level of output (q)?

answer

. p=MCb. MR=MCc. Marginal cost must be increasing

question

Which of the following would lead to an increase in the supply of hybrid automobiles:a. An increase in the price of the batteries used in hybrid carsb. The elimination of a subsidy for producers of hybrid automobilesc. An increase in the price of refined gasolined. All of the abovee. None of the above

answer

none of the above

question

Suppose a market begins in equilibrium. If supply increases, then at the original equilibrium price the quantity

answer

Be less than the quantity supplied and a surplus results, which puts downward pressure on the price

question

If a market is currently in equilibrium and then there is simultaneously a decrease in demand and a decrease in supply, the post-adjustment new equilibrium will certainly result in a:

answer

lower output level

question

Suppose an increase in new government student loans for medical students is expected to increase the number of practicing doctors in the country, which of the following would most likely occur:a. An increase in the cost of medical servicesb. A decrease in the demand for medical servicesc. An increase in the demand for medical servicesd. All of the abovee. None of the above

answer

none of the above

question

Suppose that at the current price, the demand for a firm's product is elastic. If the firm decides to implement a small price decrease, which of the following will be true:

answer

The corresponding percentage change is Q will be larger than the percentage change in P

question

true or false: when estimating the demand for a product using a survey from a focus group, the firm would always want the focus group to be a random sample of the entire population?

answer

false

question

Which of the following is true about the demand elasticity of a product:

answer

It varies over the whole range of the demand curveb. The easier the good is to store and consumer later, the more elastic demand becomesc. The less substitutes a good has, the more inelastic it becomes

question

Suppose at the current level of advertising, a firm estimates that its advertising elasticity is: 𝜼𝑨 = 𝟏.

answer

The firm will certainly increase its revenues by increasing its advertising budget by 10%ANDc. The firm would expect a 14% increase in number of units it would sell by increasing its advertising

question

Which of the following is true regarding the cost of production for a typical firm:

answer

in the short-run, fixed costs are sunk

question

At the current level of labor (L) and capital (K) the firm is using, the MPL = 20 and MPK = 100. The wage rate for labor is $10 and the rental rate of capital (r) is $50. In order to minimize the cost of production, this firm should do what in the long run?

answer

continue to use the same amount of L and K

1 of 78

question

A sudden decrease in the market demand in a competitive industry leads to:

answer

losses in the short-run and average profits in the long-run

question

If a firm in a perfectly competitive industry is experiencing average revenues greater than average costs, in the long-run:

answer

some firms will enter the industry and price will fall.

question

Competition:

answer

-requires firms to pursue economies of scale if they exist.
- lowers prices when costs fall
-encourages technical change

question

In a perfectly competitive market industry, firms prices are equal to

answer

-average revenue
-marginal revenue

question

answer

not enough information is provided

question

An effective price ceiling will lead to a

answer

market shortage

question

Which of the following causes an increase in the demand for labor?

answer

an increase in the price of the good that labor is producing

question

For a steel factory, a decrease in the cost of electricity to the plant will cause the supply curve to:

answer

shift to the right

question

The Marginal Product of Labor is:

answer

the change in total product resulting from an extra unit of labor, holding other factors constant.

question

Which of the following is true if total utility is maximized?

answer

marginal utility is equal to 0

question

In making a decision about its newspaper advertising budget, a manager of a firm should NOT consider:

answer

the previous costs already incurred in developing the newspaper ad.

question

If the benefits of a given choice option are delayed further into the future (all other relevant factors remaining constant), then the present value of the option will:

answer

decrease

question

If a firm is earning negative accounting profits, it implies:

answer

that the firm's economic profits are negative

question

The primary reason people engage in exchange is because

answer

people increase their well-being by specializing

question

answer

$200 per week

question

Scarcity can best be defined as a situation in which:

answer

the resources we use to produces goods and services are limited

question

Suppose the marginal product labor is 8 and the marginal product of capital is 2. If the wage rate is $4 and the price of capital is $2, then in order to minimize costs the firm should use:

answer

more labor and less capital

question

When choosing a least-cost production method, the firm considers

answer

-different production technologies to find efficient combinations of inputs
- the marginal products of all inputs.
-the cost of all inputs

question

The total cost of producing one unit is $50. The total cost of producing 2 unites is $75. At a production level of 2 units, the cost function exhibits:

answer

economies of scale

question

Total product refers to the total output produced within a given time frame. What is marginal product?

answer

Marginal product is the additional output generate by the addition of another unit of input

question

At its current output level, a firm's marginal profit is positive. Therefore, it should

answer

Increase output because MR > MC.

question

Which of the following will cause the marginal cost curve of making cigarettes to shift?

answer

a $1 per pack tax on cigarettes

question

Marginal cost is best defined as

answer

the change in total costs that result from selling one more product

question

answer

No, the marginal cost of the sixth kayak ($300) is greater than the marginal revenue it will bring ($250), so Mary's profits will go down if she expands.

question

If the price of MP3 players decreases,

answer

The demand for downloading songs will increase.

question

Considering a supply and demand graph with a downward sloping demand curve and a horizontal (perfectly elastic) supply curve. If the demand curve for the good increases, then:

answer

we should expect prices to stay the same, but the quantity supplied will increase.

question

If there is a decrease in the price of good A, which is a complement for good B, then the demand for good B will

answer

increase

question

An increase in the price of steak will probably lead to:

answer

an increase in demand for chicken

question

Which of these claims always true for average fixed costs?

answer

As production increases, average fixed costs will always decline.

question

The law of diminishing marginal returns states that:

answer

the marginal product of a factor eventually diminishes as more of the input is used, holding other inputs fixed

question

The law of diminishing marginal returns

answer

will eventually set into every production process.

question

The opportunity cost of investing all of your savings in a new business is equal to

answer

The rate of return on your savings you could have earned in a comparable investment

question

The opportunity cost of an action is the

answer

Value of the most highly valued alternative action given up

question

Because the resources immediately available for use are limited,

answer

people must make choices about resource use.

question

Which of the following descriptions best captures the meaning of "opportunity cost"?

answer

Opportunity cost is the highest-valued alternative foregone when we make a choice.

question

Perfect competition is a market structure in which

answer

-there are numerous producers.
-there are zero entry barriers.
- producers are price takers.
-all producers produce the same product.

question

When firms in a perfectly competitive market incur economic losses, exit by some firms means the market supply will ________ and price will ________.

answer

decrease; increase

question

In the long-run, perfectly competitive firms produce a level of output such that:

answer

P= MC and P = minimum of AC

question

In the long run, profits will equal zero in a competitive market because of

answer

free entry and exits

question

In the long-run, perfectly competitive firms product at the point where:

answer

P= ATC MR=MC P=MC

question

In a competitive industry with identical firms, long-run equilibrium is characterized by:

answer

MR = MC

question

An individuals value for a good or service is the

answer

the amount of money he or she is willing to pay for it

question

answer

$80

question

What happens to price when a good becomes more scarce?

answer

price will increase

question

Which of the following statements best summarizes the law of diminishing marginal returns?

answer

In the short run, as more labor is hired, output increases at a diminishing rate.

question

The economics concept of demand is best described as:

answer

the relationship between prices and the quantity of a product consumers are willing and able to buy at those prices.

question

Which of the following will cause an increase in the supply of a product?

answer

an advancement in technology that reduces costs of production

question

If the total output of cupcakes at Herman's bakery increases from 20 per hour to 30 per hour as he hires the second worker, then:

answer

if the price of each candle is $4, the marginal revenue product (MRP) of the second worker is $40.

question

If there is an expected decrease in the future price of a good, then the near-term demand for the good will:

answer

increase

question

If A and B are complements, an increase in the price of a good A would:

answer

lead to a decrease in demand for B

question

A recent research signified the large health benefits of eating cooked tomatoes. Holding other things constant, this will cause

answer

the demand curve for tomatoes to shift to the right

question

A sunk cost is a cost

answer

incurred in the past that cannot be altered by current decisions.

question

If Happy Trails Airlines loses money by running flights with only a few passengers on board (well below seating capacity), but they still run these flights, it must be because

answer

marginal revenue exceeds marginal cost on those flights.

question

The addition to total cost resulting from the addition of the last unit of output is known as:

answer

marginal cost

question

answer

No, the marginal cost of the 6th kayak ($300) is greater than the marginal revenue it will bring ($250), so Mary's profits will go down if she expands.

question

A firm should hire an additional worker if

answer

if the marginal benefit the firm will receive from hiring the worker is larger than the marginal cost of hiring the worker.

question

To think at the margin means to consider

answer

how a small change in a decision affects the outcome of a decision.

question

Assume that studying economics and French are your only 2 activities. If you become more efficient in learning economics but your efficiency in learning French remains constant, then you can

answer

question

answer

the income he could have earned at the car dealership

question

If in the long run companies in an industry are earning 0 economic profit, we should expect which of the following?

answer

companies will neither enter nor exit the industry, so supply will be unchanged.

question

A company will not shut down in the long run as long as the company's revenue per period is expected to be

answer

greater than or equal to the company's total cost per period

question

If average total cost > average variable cost > price, a profit maximizing firm in a perfectly competitive market should

answer

shut down in the short run

question

A perfectly competitive firm faces a:

answer

perfectly elastic demand function

question

Most student athletes in college do not pay any tuition and are not able to have a full-time job. Which of the following is true:

answer

The forgone money they could have received by working a job is the opportunity cost of choosing to be a student athlete

question

The quantity of iPads that people plan to buy this month likely depends on all of the following EXCEPT:

answer

the technology used to produce an iPad.

question

The quantity supplied of a good or service is the amount that:

answer

producers plan to sell during a given time period at a given price.

question

Suppose a new study is published that documents positive health effects associated with drinking coffee. Which of the following is likely to occur?

answer

The market price of coffee would increaseb. The supply of coffee will remain unchanged

question

If a competitive firm maximizes profits by producing some positive quantity of output (q), which of the following must be true at that level of output (q)?

answer

. p=MCb. MR=MCc. Marginal cost must be increasing

question

answer

none of the above

question

Suppose a market begins in equilibrium. If supply increases, then at the original equilibrium price the quantity

answer

Be less than the quantity supplied and a surplus results, which puts downward pressure on the price

question

If a market is currently in equilibrium and then there is simultaneously a decrease in demand and a decrease in supply, the post-adjustment new equilibrium will certainly result in a:

answer

lower output level

question

answer

none of the above

question

Suppose that at the current price, the demand for a firm's product is elastic. If the firm decides to implement a small price decrease, which of the following will be true:

answer

The corresponding percentage change is Q will be larger than the percentage change in P

question

true or false: when estimating the demand for a product using a survey from a focus group, the firm would always want the focus group to be a random sample of the entire population?

answer

false

question

Which of the following is true about the demand elasticity of a product:

answer

question

Suppose at the current level of advertising, a firm estimates that its advertising elasticity is: 𝜼𝑨 = 𝟏.

answer

The firm will certainly increase its revenues by increasing its advertising budget by 10%ANDc. The firm would expect a 14% increase in number of units it would sell by increasing its advertising

question

Which of the following is true regarding the cost of production for a typical firm:

answer

in the short-run, fixed costs are sunk

question

answer

continue to use the same amount of L and K

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