question
For a hot-dog vender, the hot-dog stand represents his
answer
fixed input.
question
Which of the following WILL change a firm's production function?
answer
Adopting new technology
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Refer to the above table. At what quantity of labor is the average product of labor maximized?
answer
3 units.
question
Which of the following would be an example of a fixed cost?
answer
Rent on machinery
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If the marginal product of an input factor is falling, then
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marginal cost is rising.
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In the long run
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all costs are variable costs.
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Diseconomies to scale are illustrated by
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an increasing long-run average cost curve.
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When a firm is at its minimum efficient scale of operation, it produces the
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minimum rate of output at which long-run average cost is minimized.
question
Which of the following statements about the perfect competitor is INCORRECT?
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The products made by a perfectly competitive firm have no close substitutes.
question
When price is greater than both marginal cost and average variable cost, the perfectly competitive firm
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should increase its level of output.
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The break-even price for a firm in perfect competition is when the price is equal to
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ATC.
question
For a firm in a perfectly competitive industry,
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short-run economic profits may be positive, but long-run economic profits must be zero.
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When marginal cost pricing occurs,
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price equals the additional cost society incurs in producing the next unit of an item
question
Which of the following statements is FALSE?
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A monopolist may have very close substitutes for the product produced by the firm.
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Which of the following is issued to an investor to provide protection from having the invention copied or stolen for 20 years?
answer
A patent.
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To sell one more unit of a good, a monopolist must
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lower the price on all units.
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The price elasticity of demand for a monopolist's product depends on
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the number and similarity of substitutes.
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Which of the following is a true statement?
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A monopolist does not have to make a profit.
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When grocery stores issue special discount membership cards for shoppers effectively offering different prices based on quantities consumed, this is an example of
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price discrimination.
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Monopolies are discouraged in the United States because
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they restrict output and boost prices.
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Economic inefficiency of a monopoly is indicated by
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P > MC.
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Deadweight loss is
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The portion of consumer surplus that no one in society is able to obtain.
question
A market situation in which a large number of firms produce similar but not identical products is called
answer
monopolistically competitive.
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The demand curve for a monopolistic competitor firm is
answer
more elastic than for a monopoly firm.
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A monopolistic competitor would face a demand curve with a
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negative slope.
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Monopolistic competition and perfect competition are similar in that each market structure is characterized by
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the absence of long-run economic profit.
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Which of the following statements about a monopolistically competitive firm is FALSE?
answer
It sets price like a perfectly competitive firm.
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A monopolistic competitor is in long-run equilibrium when
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its average total cost curve is tangent to the demand curve at the profit-maximizing rate of output.
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Mass marketing is
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advertising intended to reach as many consumers as possible.
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Informational advertising is the type of advertising that
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emphasizes the features of its product.
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Average total cost for an information product would
answer
decrease constantly as quantity increases.
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