chpt 9 & 10 micro - Assignment Essays

question

Perfect competition is a model of the market that assumes all of the following EXCEPT:

answer

firms face downward-sloping demand curves.

question

The assumptions of perfect competition imply that:

answer

individuals in the market accept the market price as given.

question

Price takers:

answer

are those individuals in a competitive market who must accept the market price as given

question

An assumption of the model of perfect competition is:

answer

identical goods.

question

The market for breakfast cereal contains hundreds of similar products, such as Fruit Loops, Corn Flakes, and Rice Krispies, that are considered to be different products by different buyers. This situation violates the perfect competition assumption of:

answer

identical goods

question

Suppose that the market for computers is dominated by a single firm, like Dell, that is able to exert influence over prices and output. This situation violates the perfect competition assumption of:

answer

many buyers and sellers.

question

An assumption of the model of perfect competition is:

answer

complete information.

question

Which of the following is not an assumption economists make when using the model of perfect competition?

answer

Each firm sets it price equal to its average total cost.

question

Economic profit:

answer

is the vertical distance between total revenue and total cost at a particular level of output

question

A firm's total revenue in perfect competition is:

answer

found by multiplying its output by the price at which it sells that output

question

The price received by a firm in a perfectly competitive market:

answer

is equal to the market price

question

For a firm in a perfectly competitive market:

answer

marginal revenue equals price and average revenue.

question

If a perfectly competitive firm sells 30 units of output at a price of $10 per unit, its marginal revenue is:

answer

$10

question

The slope of the total revenue curve is:

answer

marginal revenue.

question

Firms in the model of perfect competition will:

answer

increase output up to the point that the marginal benefit of an additional unit of output is equal to the marginal cost.

question

Reference: Ref 9-2

(Exhibit: Total Revenue and Cost) The most profitable level of output occurs at quantity:

answer

question

Reference: Ref 9-2

(Exhibit: Total Revenue and Cost) Total cost at the most profitable level of output is given by point:

answer

question

Reference: Ref 9-5

(Exhibit: Marginal Decision Rule) If P 1 is the market price, and if this firm has decided to produce any output, it should produce:

answer

quantity q 2.

question

For a firm producing at any level of output less than the most profitable one, an increase in output adds:

answer

more to total revenue than to total cost.

question

If price is greater than average total cost at the profit-maximizing quantity of output in the short run, a perfectly competitive firm will:

answer

produce at a profit.

question

Reference: Ref 9-8

(Exhibit: A Perfectly Competitive Firm in the Short Run) The firm's total economic profit at its most profitable level of output is:

answer

FGLK.

question

Reference: Ref 9-8

(Exhibit: A Perfectly Competitive Firm in the Short Run) The firm will produce in the short run if the price is at least as much as the price indicated by the distance:

answer

question

Reference: Ref 9-8

(Exhibit: A Perfectly Competitive Firm in the Short Run) A perfectly competitive firm's supply curve is the:

answer

rising part of MC beginning at the shutdown point.

question

A firm's shut-down point is the minimum value of:

answer

average variable cost.

question

A monopoly is a market characterized by:

answer

a product with no close substitutes.

question

A monopoly is a market characterized by:

answer

a single seller.

question

The power a firm has to set is own price is called:

answer

monopoly power.

question

A monopoly:

answer

determines its own price, given its demand curve.

question

A natural monopoly is most likely to result if a single firm:

answer

experiences economies of scale over a wide range of output.

question

Marginal revenue for a monopolist is:

answer

less than price

question

Reference: Ref 10-2

(Exhibit: Computing Monopoly Profit) The profit-maximizing price is _______ and will generate total economic profit of _______ .

answer

P 3; the rectangle P 2P 3EF

question

Which of the following is true in a perfectly competitive market?

answer

One unit of a good or service cannot be differentiated from any other on any basis.

question

An assumption of the model of perfect competition is:

answer

many new buyers and sellers

question

Suppose that automobile buyers in the southern part of a town have no idea what prices are being paid in the northern part of town. This situation violates the perfect competition assumption of:

answer

complete information

question

Perfect competition is best considered a:

answer

theoretical extreme that does not exist in the real world but that can provide useful insights.

question

A firm's total output times the price at which it sells that output is:

answer

total revenue.

question

If a perfectly competitive firm increases production from 10 units to 11 units, and the market price is $20 per unit, total revenue for 10 units is:

answer

$200

question

Which of the following is true?

answer

When a firm is operating under perfectly competitive market conditions, price and marginal cost will always be equal if the firm is maximizing profits

question

If a firm in perfect competition sells 10 units of output at a market price of $5 per unit, its marginal revenue is:

answer

question

Economic profit is maximized when:

answer

the slope of the total revenue curve is equal to the slope of the total cost curve

question

Reference: Ref 9-5

(Exhibit: Marginal Decision Rule) Given the market price P 1, Curve B is the _______ curve.

answer

marginal revenue

question

In perfect competition:

answer

price and marginal revenue are the same.

question

The profit-maximizing level of output for a perfectly competitive firm occurs where there is equality between the slopes of the:

answer

total revenue and total cost curves.

question

Reference: Ref 9-6

(Exhibit: Profit Maximizing) The exhibit shows cost curves for a firm operating in a perfectly competitive market. Curve M is the _______ curve.

answer

question

Reference: Ref 9-8

(Exhibit: A Perfectly Competitive Firm in the Short Run) The firm will shut down in the short run if the price falls below:

answer

question

In the short run, a perfectly competitive firm does not produce output and earns a negative economic profit if:

answer

P < AVC.

question

A monopoly is likely to _______ and _______ than otherwise equivalent competitive firms.

answer

produce less; charge more

question

Conditions that prevent the entry of new firms in a monopoly market are:

answer

barriers to entry.

question

The demand curve facing a monopolist is:

answer

downward sloping

question

Reference: Ref 10-2

(Exhibit: Computing Monopoly Profit) In order to obtain maximum profits, the monopoly should produce the output determined by point _______ .

answer

question

Suppose that a monopolist increases production from 10 units to 11 units. If the market price declines from $30 per unit to $29 per unit, marginal revenue for the eleventh unit is:

answer

$19

1 of 51

question

Perfect competition is a model of the market that assumes all of the following EXCEPT:

answer

firms face downward-sloping demand curves.

question

The assumptions of perfect competition imply that:

answer

individuals in the market accept the market price as given.

question

Price takers:

answer

are those individuals in a competitive market who must accept the market price as given

question

An assumption of the model of perfect competition is:

answer

identical goods.

question

answer

identical goods

question

Suppose that the market for computers is dominated by a single firm, like Dell, that is able to exert influence over prices and output. This situation violates the perfect competition assumption of:

answer

many buyers and sellers.

question

An assumption of the model of perfect competition is:

answer

complete information.

question

Which of the following is not an assumption economists make when using the model of perfect competition?

answer

Each firm sets it price equal to its average total cost.

question

Economic profit:

answer

is the vertical distance between total revenue and total cost at a particular level of output

question

A firm's total revenue in perfect competition is:

answer

found by multiplying its output by the price at which it sells that output

question

The price received by a firm in a perfectly competitive market:

answer

is equal to the market price

question

For a firm in a perfectly competitive market:

answer

marginal revenue equals price and average revenue.

question

If a perfectly competitive firm sells 30 units of output at a price of $10 per unit, its marginal revenue is:

answer

$10

question

The slope of the total revenue curve is:

answer

marginal revenue.

question

Firms in the model of perfect competition will:

answer

increase output up to the point that the marginal benefit of an additional unit of output is equal to the marginal cost.

question

Reference: Ref 9-2

(Exhibit: Total Revenue and Cost) The most profitable level of output occurs at quantity:

answer

question

Reference: Ref 9-2

(Exhibit: Total Revenue and Cost) Total cost at the most profitable level of output is given by point:

answer

question

Reference: Ref 9-5

(Exhibit: Marginal Decision Rule) If P 1 is the market price, and if this firm has decided to produce any output, it should produce:

answer

quantity q 2.

question

For a firm producing at any level of output less than the most profitable one, an increase in output adds:

answer

more to total revenue than to total cost.

question

If price is greater than average total cost at the profit-maximizing quantity of output in the short run, a perfectly competitive firm will:

answer

produce at a profit.

question

Reference: Ref 9-8

(Exhibit: A Perfectly Competitive Firm in the Short Run) The firm's total economic profit at its most profitable level of output is:

answer

FGLK.

question

Reference: Ref 9-8

(Exhibit: A Perfectly Competitive Firm in the Short Run) The firm will produce in the short run if the price is at least as much as the price indicated by the distance:

answer

question

Reference: Ref 9-8

(Exhibit: A Perfectly Competitive Firm in the Short Run) A perfectly competitive firm's supply curve is the:

answer

rising part of MC beginning at the shutdown point.

question

A firm's shut-down point is the minimum value of:

answer

average variable cost.

question

A monopoly is a market characterized by:

answer

a product with no close substitutes.

question

A monopoly is a market characterized by:

answer

a single seller.

question

The power a firm has to set is own price is called:

answer

monopoly power.

question

A monopoly:

answer

determines its own price, given its demand curve.

question

A natural monopoly is most likely to result if a single firm:

answer

experiences economies of scale over a wide range of output.

question

Marginal revenue for a monopolist is:

answer

less than price

question

Reference: Ref 10-2

(Exhibit: Computing Monopoly Profit) The profit-maximizing price is _______ and will generate total economic profit of _______ .

answer

P 3; the rectangle P 2P 3EF

question

Which of the following is true in a perfectly competitive market?

answer

One unit of a good or service cannot be differentiated from any other on any basis.

question

An assumption of the model of perfect competition is:

answer

many new buyers and sellers

question

Suppose that automobile buyers in the southern part of a town have no idea what prices are being paid in the northern part of town. This situation violates the perfect competition assumption of:

answer

complete information

question

Perfect competition is best considered a:

answer

theoretical extreme that does not exist in the real world but that can provide useful insights.

question

A firm's total output times the price at which it sells that output is:

answer

total revenue.

question

If a perfectly competitive firm increases production from 10 units to 11 units, and the market price is $20 per unit, total revenue for 10 units is:

answer

$200

question

Which of the following is true?

answer

When a firm is operating under perfectly competitive market conditions, price and marginal cost will always be equal if the firm is maximizing profits

question

If a firm in perfect competition sells 10 units of output at a market price of $5 per unit, its marginal revenue is:

answer

question

Economic profit is maximized when:

answer

the slope of the total revenue curve is equal to the slope of the total cost curve

question

Reference: Ref 9-5

(Exhibit: Marginal Decision Rule) Given the market price P 1, Curve B is the _______ curve.

answer

marginal revenue

question

In perfect competition:

answer

price and marginal revenue are the same.

question

The profit-maximizing level of output for a perfectly competitive firm occurs where there is equality between the slopes of the:

answer

total revenue and total cost curves.

question

Reference: Ref 9-6

(Exhibit: Profit Maximizing) The exhibit shows cost curves for a firm operating in a perfectly competitive market. Curve M is the _______ curve.

answer

question

Reference: Ref 9-8

(Exhibit: A Perfectly Competitive Firm in the Short Run) The firm will shut down in the short run if the price falls below:

answer

question

In the short run, a perfectly competitive firm does not produce output and earns a negative economic profit if:

answer

P < AVC.

question

A monopoly is likely to _______ and _______ than otherwise equivalent competitive firms.

answer

produce less; charge more

question

Conditions that prevent the entry of new firms in a monopoly market are:

answer

barriers to entry.

question

The demand curve facing a monopolist is:

answer

downward sloping

question

Reference: Ref 10-2

(Exhibit: Computing Monopoly Profit) In order to obtain maximum profits, the monopoly should produce the output determined by point _______ .

answer

question

Suppose that a monopolist increases production from 10 units to 11 units. If the market price declines from $30 per unit to $29 per unit, marginal revenue for the eleventh unit is:

answer

$19

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