Econ 1101 Final - Assignment Essays

question

What is marginal utility?

answer

The additional satisfaction received from consuming one more unit of a good.

question

Diminishing marginal utility means that

answer

Ralph will enjoy his second hamburger less than the first.

question

According to the principle of diminishing marginal utility, as consumption of a good increases, total utility

answer

increases at a decreasing rate

question

Advise Sarah how to maximize her utility if MUA=8, MUB=20, PA=4 and PB=5.

answer

consume more of good B and less of good A

question

In consumer equilibrium, a consume equates the

answer

marginal utility per dollar on each good

question

Ron starts out in consumer equilibrium, consuming two goods, X and Y. The price of Y rises. Initially

answer

MUx/Px > MUy/Py, and then Ron decreases consumption of Y

question

The downward slope of the demand curve for a product is a result of:

answer

diminishing marginal utility

question

Increases in product prices shift the consumer's:

answer

budget line to the left

question

An indifference curve shows all

answer

combinations of two products yielding the same total utility to a consumer

question

Which of the following is not a characteristic of indifference curve?

answer

Curves closer to the origin reflect higher level of total utility

question

If a firms revenues just cover all its opportunity costs, then

answer

economic profit is zero

question

In the short run of a perfectly competitive market

answer

output can be changed by using different levels of variable inputs.

question

Which of the following statements concerning the relationships between total product (TP), average product (AP), and marginal product (MP) is correct?

answer

Average product does not rise because total product is rising.

question

Diminishing marginal return

answer

a level of production in which the marginal product of labor decreases as the number of workers increases

question

economies of scale

answer

factors that cause a producer's average cost per unit to fall as output rises

question

When average product is rising AVC is falling

answer

When average product is declining, AVC is rising

question

In the long run, a firm will choose a plant size that has the

answer

minimum average total cost of producing the target level of output

question

In which two market models would advertising be used most often?

answer

monopolistic competition and oligopoly

question

A perfectly competitive firm does not try to sell more its product by lowering its products by below the market price because

answer

it can sell all it wants to at the market price

question

Which of the following is not a characteristic of perfect compeition

answer

price strategies by firms (they can sell at any price)

question

Price is constant or "given" to the individual firm selling in a perfectly competitive market because

answer

each seller supplies a negligible fraction of total supply

question

If in the short run, price is greater than average total cost, and new firms are attracted to an industry, the price will be:

answer

brought back down to equality with minimum average total cost in the long run

question

In a perfect competitive industry

answer

there may be economic profit in the short-run, but not in the long-run

question

Assume that the market for soybeans in perfectly competitive. Currently, firms growing soybeans are experiencing economic profits. In the long run, we can expect this market's

answer

supply curve to shift to the right

question

Suppose a firm in a competitive market discovers that the price of its output is above its minimum AVC point, but below ATC. Given this, the firm

answer

should continue producing in the short run, but leave the industry in the long run.

question

The demand curve face by a monopolist

answer

is less elastic than that faced by a single perfectly competitive firm.

question

The marginal revenue curve for a monopolist

answer

is positive at low levels of output, then becomes negative at high output levels

question

If a non-discriminating imperfectly competitive firm is selling its 100th unit of output for $35, its marginal revenue

answer

will be less than $35

question

Because a monopolists demand curve is downward sloping:

answer

price must be lowered to sell more output

question

The MR=MC rule:

answer

applies both to monopoly and perfect compeitition

question

Which of the following is not a precondition for price discrimination?

answer

the commodity involved must be a durable good.

question

Which would definitely not be an example of price discrimination

answer

An electric power company charges less for electricity used during off-peak hours when production costs are lower

question

If a monopolists engages in price discrimination, we can expect

answer

both profits and output to increase

question

Monopolists are said to be allocatively inefficient because:

answer

at the profit-maximizing output the marginal benefit to society of additional output is greater than the marginal cost to society

question

If the number of firms in a monopolistically competitive industry increases and the degree of differentiation diminishes

answer

the industry would more closely approximate perfect competition

question

Economic analysis of a monopolistically competitive industry is more complicated than that of perfect competition because:

answer

of product differentiation and consequent product promotion activities

question

nonprice competition refers to

answer

advertising, product promotion, and changes in the real or perceived characteristics of a product.

question

The price elasticity of monopolistically competitive firm's demand curve varies

answer

directly with the number of competitors, but inversely with the degree of product differentiation

question

In a monopolistic competition there is an under-allocation of resources at the profit-maximization level of output, which means that:

answer

price is greater than MC

question

Monopolistic competitive firms are productively inefficient because production occurs where:

answer

average total cost of production is greater than the minimum average total cost

question

Oligopoly is difficult to analyze primarily because:

answer

the price and output decisions of any firm depends on the reactions of its rivals

question

Prisoner's dilemma refers to a type of game where

answer

whatever the other player does, each player is better off confessing

question

Nash Equilibrium

answer

a situation in which economic actors interacting with one another each choose their best strategy given the strategies that all the other actors have chosen

1 of 43

question

What is marginal utility?

answer

The additional satisfaction received from consuming one more unit of a good.

question

Diminishing marginal utility means that

answer

Ralph will enjoy his second hamburger less than the first.

question

According to the principle of diminishing marginal utility, as consumption of a good increases, total utility

answer

increases at a decreasing rate

question

Advise Sarah how to maximize her utility if MUA=8, MUB=20, PA=4 and PB=5.

answer

consume more of good B and less of good A

question

In consumer equilibrium, a consume equates the

answer

marginal utility per dollar on each good

question

Ron starts out in consumer equilibrium, consuming two goods, X and Y. The price of Y rises. Initially

answer

MUx/Px > MUy/Py, and then Ron decreases consumption of Y

question

The downward slope of the demand curve for a product is a result of:

answer

diminishing marginal utility

question

Increases in product prices shift the consumer's:

answer

budget line to the left

question

An indifference curve shows all

answer

combinations of two products yielding the same total utility to a consumer

question

Which of the following is not a characteristic of indifference curve?

answer

Curves closer to the origin reflect higher level of total utility

question

If a firms revenues just cover all its opportunity costs, then

answer

economic profit is zero

question

In the short run of a perfectly competitive market

answer

output can be changed by using different levels of variable inputs.

question

Which of the following statements concerning the relationships between total product (TP), average product (AP), and marginal product (MP) is correct?

answer

Average product does not rise because total product is rising.

question

Diminishing marginal return

answer

a level of production in which the marginal product of labor decreases as the number of workers increases

question

economies of scale

answer

factors that cause a producer's average cost per unit to fall as output rises

question

When average product is rising AVC is falling

answer

When average product is declining, AVC is rising

question

In the long run, a firm will choose a plant size that has the

answer

minimum average total cost of producing the target level of output

question

In which two market models would advertising be used most often?

answer

monopolistic competition and oligopoly

question

A perfectly competitive firm does not try to sell more its product by lowering its products by below the market price because

answer

it can sell all it wants to at the market price

question

Which of the following is not a characteristic of perfect compeition

answer

price strategies by firms (they can sell at any price)

question

Price is constant or "given" to the individual firm selling in a perfectly competitive market because

answer

each seller supplies a negligible fraction of total supply

question

If in the short run, price is greater than average total cost, and new firms are attracted to an industry, the price will be:

answer

brought back down to equality with minimum average total cost in the long run

question

In a perfect competitive industry

answer

there may be economic profit in the short-run, but not in the long-run

question

Assume that the market for soybeans in perfectly competitive. Currently, firms growing soybeans are experiencing economic profits. In the long run, we can expect this market's

answer

supply curve to shift to the right

question

Suppose a firm in a competitive market discovers that the price of its output is above its minimum AVC point, but below ATC. Given this, the firm

answer

should continue producing in the short run, but leave the industry in the long run.

question

The demand curve face by a monopolist

answer

is less elastic than that faced by a single perfectly competitive firm.

question

The marginal revenue curve for a monopolist

answer

is positive at low levels of output, then becomes negative at high output levels

question

If a non-discriminating imperfectly competitive firm is selling its 100th unit of output for $35, its marginal revenue

answer

will be less than $35

question

Because a monopolists demand curve is downward sloping:

answer

price must be lowered to sell more output

question

The MR=MC rule:

answer

applies both to monopoly and perfect compeitition

question

Which of the following is not a precondition for price discrimination?

answer

the commodity involved must be a durable good.

question

Which would definitely not be an example of price discrimination

answer

An electric power company charges less for electricity used during off-peak hours when production costs are lower

question

If a monopolists engages in price discrimination, we can expect

answer

both profits and output to increase

question

Monopolists are said to be allocatively inefficient because:

answer

at the profit-maximizing output the marginal benefit to society of additional output is greater than the marginal cost to society

question

If the number of firms in a monopolistically competitive industry increases and the degree of differentiation diminishes

answer

the industry would more closely approximate perfect competition

question

Economic analysis of a monopolistically competitive industry is more complicated than that of perfect competition because:

answer

of product differentiation and consequent product promotion activities

question

nonprice competition refers to

answer

advertising, product promotion, and changes in the real or perceived characteristics of a product.

question

The price elasticity of monopolistically competitive firm's demand curve varies

answer

directly with the number of competitors, but inversely with the degree of product differentiation

question

In a monopolistic competition there is an under-allocation of resources at the profit-maximization level of output, which means that:

answer

price is greater than MC

question

Monopolistic competitive firms are productively inefficient because production occurs where:

answer

average total cost of production is greater than the minimum average total cost

question

Oligopoly is difficult to analyze primarily because:

answer

the price and output decisions of any firm depends on the reactions of its rivals

question

Prisoner's dilemma refers to a type of game where

answer

whatever the other player does, each player is better off confessing

question

Nash Equilibrium

answer

a situation in which economic actors interacting with one another each choose their best strategy given the strategies that all the other actors have chosen

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