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utility
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The ability of a product to provide satisfaction is known as?
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positive, negative, or zero.
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Marginal utility is?
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marginal utility decreases as more of a product is consumed.
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The demand curve is downward sloping because?
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is negative.
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If total utility is decreasing, marginal utility...
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consumers behave rationally, maximizing their satisfactions.
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The theory of consumer behavior assumes that...
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Susan is buying tortilla chips and guacamole in the equal marginal principle amounts.
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Susan spends all her income buying tortilla chips and guacamole. The last bag of tortilla chips purchased results in a marginal utility of 3 utils. The last tub of guacamole purchased results in a marginal utility of 4 utils. The price of each bag of tortilla chips is $1.50 and the price of each tub of guacamole is $2. In this situation...
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receives more marginal utility from the basketball game than from the musical.
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Michael chooses to purchase a $125 ticket to a New York Knicks basketball game rather than a $150 ticket for The Lion King, a Broadway musical. Michael...
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2 movies and 1 dinner.
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Suppose you earn $50 a week at your job. You like to go to the movies and have dinner with friends. Movies cost $15 each and dinner is $20 each time you eat out. Which of the following combinations is attainable given your weekly budget?
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total utility
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Indifference curves show the ________ of combinations of two products.
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steak over chicken.
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Indifference curves do not cross because if you prefer steak over salmon and salmon over chicken, then you also prefer...
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greater than economic profits, because accounting profits do not consider implicit costs.
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Generally, accounting profits are...
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$525,000; $225,000
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Suppose that a business incurred explicit costs of $1.5 million and implicit costs of $300,000 last year. If the firm sold 4,500 units of its output at $450 per unit, its accounting profits were _______ and its economic profits were _______.
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usually increases then decreases and may become negative.
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Marginal product...
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marginal product is positive.
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When total product is rising...
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declines continually as output expands.
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Average fixed cost...
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total cost
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Average total cost is __________ divided by the number of units of output.
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total cost
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Marginal cost describes a change in _________ when output is expanded by one more unit.
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derive averages.
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Marginal Values...
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average variable and average total cost curves at their lowest points.
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The marginal cost curve crosses the..
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A local Starbucks hires two new employees.
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Which of the following scenarios does not illustrate a long-run adjustment?
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Some resources are fixed in the short run, and all resources are variable in the long run.
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Which of the following statements describes a difference between the short run and the long run?
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the firm experienced specialization in labor and management.
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One reason a firm may experience economies of scale is...
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costs increase as output expands.
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A firm is experiencing diseconomies of scale if...
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Price is greater than marginal revenue.
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Which of the following statements does not describe a perfectly competitive market?
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can sell as much output as it wants at the equilibrium price.
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A perfectly competitive firm...
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marginal revenue.
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Price for a perfectly competitive seller equals...
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marginal revenue and marginal cost.
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In the short run, a perfectly competitive firm calculates the profit-maximizing (or loss-minimizing) production output by equating...
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total profit.
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In a perfectly competitive industry, firms seek to maximize...
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earns a loss of $70.
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Assume the Unico Corporation is producing 40 units of output and selling the output in a perfectly competitive market for $5 per unit. Its total fixed costs are $110, and its average variable cost is $4 for each of the 40 units of output. Unico...
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the firm may be able to minimize losses.
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In the short run, if ATC is greater than price at the output level where MC = MR then...
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the average variable cost curve.
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A perfectly competitive firm's short-run supply curve is at its lowest point when MC equals the minimum point of...
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the firm will earn a normal profit.
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In the long run, if ATC equals price at the output level where MC = MR then...
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allocative and productive efficiency.
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In the long run, perfectly competitive firms achieve...
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Price equals the minimum point on ATC.
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Which of the following statements describes what perfectly competitive firms experience in the long run?
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The market supply curve becomes perfectly elastic in the long run.
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Which of the following statements describes a perfectly competitive market under conditions of constant cost?
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Its demand curve is perfectly elastic.
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Which of the following is not a characteristic of monopoly?
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One Firm, No Similar Products, No Entry, and Price Maker.
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Characteristics of a Monopoly? (4)
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is the same as the market demand curve.
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A monopolist's demand curve...
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lies below the demand curve.
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A monopolist's marginal revenue curve...
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It must lower price to sell more output, and the lower price applies to all units of output sold.
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Which of the following statements explains why a pure monopolist's marginal revenue is less than price?
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produce less and charge a higher price than a perfectly competitive firm.
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Assuming the same costs, a monopoly will...
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both monopoly and perfect competition profit maximization.
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The MR = MC rule is used to analyze...
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Finding everyone's willingness to pay is costly and difficult.
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What is one major hurdle monopolies face to engage in first-degree price discrimination?
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Third-degree price discrimination.
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Student discount is what type of price discrimination?
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Economies of scale occur as ATC decreases over a wide range of output.
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Which of the following statements explains when a natural monopoly occurs?
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