question
Which of the following will not hold true for a competitive firm in long-run equilibrium?
answer
P equals AFC.
question
For economists, the word "utility" means
answer
look for and pursue opportunities to increase their utility.
question
If economic profits in a particular industry increase, then we would expect:
answer
firms to enter that industry thus expanding it
question
In the short run, the individual competitive firm's supply curve is that segment of the:
answer
marginal cost curve lying above the average variable cost curve.
question
Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market.
Refer to the data. If the market price for this firm's product is $68.10, it will produce:
Refer to the data. If the market price for this firm's product is $68.10, it will produce:
answer
8 units at an economic profit of $130.72.
question
Economic profit in the long run is:
answer
possible for a pure monopoly but not for a pure competitor.
question
If a monopolist engages in price discrimination, it will:
answer
charge a higher price where individual demand is inelastic and a lower price where individual demand is elastic.
question
An increasing-cost industry is associated with:
answer
an upsloping long-run supply curve.
question
Which of the following statements is not correct?
answer
In the range of prices in which demand is elastic, total revenue will diminish as price decreases.
question
The narrower the definition of a product,
answer
the larger the number of substitutes and the greater the price elasticity of demand.
question
Answer the question on the basis of the following information:
Refer to the information. Marginal cost is:
Refer to the information. Marginal cost is:
answer
change in TF/change in Q
question
Refer to the diagram. A decrease in quantity demanded is depicted by a:
answer
move from point y to point x.
question
The role of the entrepreneur in society is to:
answer
Bring the factors of production together and take the risks of producing
question
Marginal resource cost refers to the
answer
amount by which a firm's total resource cost increases as the result of hiring one more unit of the resource.
question
In which of the following instances will total revenue decline?
answer
Price rises and demand is elastic.
question
A firm operating in a purely competitive resource market faces a resource supply curve that is
answer
perfectly elastic.
question
Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market:
Refer to the data. If the market price for the firm's product is $12, the competitive firm should produce:
Refer to the data. If the market price for the firm's product is $12, the competitive firm should produce:
answer
zero units at a loss of $100.
question
Occupational licensing
answer
often restricts occupational entry and raises the incomes of license holders.
question
Fixed cost is:
answer
any cost that does not change when the firm changes its output.
question
The relationship between the elasticity of product demand and the elasticity of demand for labor employed in its production is such that, other things being equal:
answer
the more elastic the demand for the product, the more elastic the demand for labor.
question
Other things equal, we would expect the labor demand curve of a monopolistic seller to:
answer
decline more rapidly than that of a purely competitive seller.
question
Which of the following is not a reason why specialization and trade are beneficial to society?
answer
Firms and workers become less dependent on others for producing goods and services
question
Which of the following tactics is most associated with the demand-enhancement union model?
answer
lobbying for increases in public expenditures on the product it is producing
question
The market supply curve for labor is upsloping because
answer
employers as a group must pay higher wage rates to obtain more workers.
question
When the percentage change in price is greater than the resulting percentage change in quantity demanded,
answer
an increase in price will increase total revenue.
question
With a downsloping demand curve and an upsloping supply curve for a product, an increase in consumer income will:
answer
increase equilibrium price and quantity if the product is a normal good.
question
Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market.
answer
9 units at an economic profit of $281.97.
question
An important similarity between a monopolistically competitive firm and a purely competitive firm is that:
answer
economic profit tends toward zero for both.
question
We would expect the cross elasticity of demand between dress shirts and ties to be
answer
negative, indicating complementary goods.
question
Monopolistic competition means:
answer
many firms producing differentiated products
question
If a 10 percent wage increase in a particular labor market results in a 5 percent decline in employment in that market, labor demand is:
answer
unit-elastic.
question
Refer to the diagram and assume that price increases from $2 to $10. The coefficient of the price elasticity of supply (midpoint formula) relating to this price change is about:
answer
.25 and supply is inelastic.
question
Refer to the information. Over the $7-$5 price range, demand is:
answer
inelastic.
question
Minimum-wage legislation is less likely to have adverse effects on employment when the:
answer
affected labor market is monopsonistic.
question
Cross elasticity of demand measures how sensitive purchases of a specific product are to changes in
answer
the price of some other product.
question
Refer to the diagram for a monopolistically competitive firm in short-run equilibrium. This firm's profit-maximizing price will be
answer
$10
question
Answer the question on the basis of the following marginal utility data for products X and Y. Assume that the prices of X and Y are $4 and $2 respectively and that the consumer's income is $18.
answer
2 of X and 5 of Y.
question
Assume labor is the only variable input and that an additional input of labor increases total output from 72 to 78 units. If the product sells for $6 per unit in a purely competitive market, the MRP of this additional worker is:
answer
$36
question
Marginal product is:
answer
the amount an additional worker adds to the firm's total output.
question
Total Product Average Fixed Cost Average Variable Cost Average Total Cost Marginal Cost
1 $100.00 $17.00 $117.00 $172 50.00 16.00 66.00 153 33.33 15.00 48.33 134 25.00 14.25 39.25 125 20.00 14.00 34.00 136 16.67 14.00 30.67 147 14.29 15.71 30.00 268 12.50 17.50 30.00 309 11.11 19.44 30.55 3510 10.00 21.60 31.60 4111 9.09 24.00 33.09 4812 8.33 26.67 35.00 56
The accompanying table gives cost data for a firm that is selling in a purely competitive market. If there were 1,000 identical firms in this industry and total, or market, demand is as shown in the second table, equilibrium price will be
Price Quantity Demanded$50 3,00042 6,00036 9,00032 11,00020 14,00013 19,500
1 $100.00 $17.00 $117.00 $172 50.00 16.00 66.00 153 33.33 15.00 48.33 134 25.00 14.25 39.25 125 20.00 14.00 34.00 136 16.67 14.00 30.67 147 14.29 15.71 30.00 268 12.50 17.50 30.00 309 11.11 19.44 30.55 3510 10.00 21.60 31.60 4111 9.09 24.00 33.09 4812 8.33 26.67 35.00 56
The accompanying table gives cost data for a firm that is selling in a purely competitive market. If there were 1,000 identical firms in this industry and total, or market, demand is as shown in the second table, equilibrium price will be
Price Quantity Demanded$50 3,00042 6,00036 9,00032 11,00020 14,00013 19,500
answer
$36
question
Which of the following statements best illustrates the concept of derived demand?
answer
A decline in the demand for shoes will cause the demand for leather to decline.
question
Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market.
Refer to the data. At 3 units of output, total variable cost is ____ and total cost is ____.
Refer to the data. At 3 units of output, total variable cost is ____ and total cost is ____.
answer
$60; $210
question
If a purely competitive firm is producing at the MR = MC output level and earning an economic profit, then:
answer
new firms will enter this market.
question
Refer to the diagram. A shortage of 160 units would be encountered if price was:
answer
$0.50.
question
A natural monopoly occurs when:
answer
long-run average costs decline continuously through the range of demand.
question
Wage differentials may result from all the following except
answer
the tendency of qualified workers to move from lower pay jobs to higher pay jobs.
question
To maximize utility, a consumer should allocate money income so that the:
answer
marginal utility obtained from the last dollar spent on each product is the same.
question
Which of the following is not a characteristic of pure competition?
answer
Price strategies by firms.
question
Marginal revenue product (MRP) of labor refers to the
answer
increase in total revenue resulting from hiring one more unit of labor.
question
If an exclusive union is successful in restricting the supply of labor, the
answer
wage rate will rise.
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