question
The Wireless industry, consisting mainly of three large companies, Verizon, AT&T, and Sprint, is an example of ____.
answer
an oligopoly
question
Fax machines, office space, and computers, because they are required regardless of the exact level of production (output) would best categorized as ______.
answer
Fixed inputs
question
The table below sets out cost information for the production of volley balls. Some values are missing. Which of the following statements is correct?
answer
A = 42, E = 12
question
I'MaPizzaCo. produces and sells specialty pizzas. Last year, it produced 8,000 mushroom, sausage and spinach pizzas and sold each one for $18. To produce these 8,000 specialty pizzas, the company incurred variable costs of $24,000 and a total cost of $40,000. I'MaPizzaCo's average fixed cost to produce 8,000 specialty pizzas was _____.
answer
$2.00
question
If a firm has 'Market Power' it means ________.
answer
it is a 'price setter' (that is, it can raise its price without losing all its customers)
question
Suppose the demand curve is estimated to be: P = 10 - Q. What Price (P) will the firm charge if it wants to maximize REVENUE?
answer
5
question
"Utility" ____________.
answer
measures the level of satisfaction or pleasure that people receive from their choices
question
________ describes the additional satisfaction provided by one additional unit of consumption.
answer
Marginal utility
question
Bob budgets $12 a week for entertainment. He splits his time between going to the movies and going to the gym. Each movie costs $3 and each session at the gym also costs $3. The total utility from each of these activities is shown in the table below.
answer
is 16 utils
question
Given the table of preferences in the previous problem. Bob's utility maximizing point is ____.
answer
1 movie; 3 gym workout sessions
question
As Barry Schwartz describes in the reading on Blackboard, more choice _________.
answer
will lead to less happiness for some individuals
question
The changes in consumers' preferences based on the addition of a clearly inferior substitute (as shown in the "Rome with no coffee" example in class) illustrates ______.
answer
that 'framing' is important
question
Profit is maximized _________________.
answer
at a lower quantity than the quantity where revenue is maximized
question
Which of the following should typically be ignored because spending has already been made and cannot be changed?
answer
Sunk costs
question
"Economies of Scale" refers to ____________.
answer
achieving lower cost per unit of production as production becomes greater
question
A monopolist is able to maximize its profits by ___________.
answer
producing output where MR = MC and charging a price along the demand curve
question
BONUS: Suppose a firm has a demand curve P = 12 - Q, where P is price per unit and Q is number of units. What is the REVENUE maximizing Price (P)? I.e., what P should be charged if the firm wants to maximize revenue?
answer
6
question
The market structure with many firms selling a differentiated product is ________.
answer
Monopolistic competition
question
A key feature of oligopoly is ______________.
answer
recognized interdependence
question
A "meet the competition" promise ____________.
answer
may lead to higher prices industry-wide
question
The demand curve for an individual firm's product in a perfectly competitive industry __.
answer
is horizontal
question
We study perfect competition mostly because ________.
answer
it serves as a good base for comparison (ie a reference point when examining other types)
question
Bonus: The market type characterized by high barriers to entry is ___________.
answer
oligopoly
question
BONUS: The beer industry in the US is best characterized as ________________.
answer
Oligopoly, because while there are many brands there are only a few suppliers
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