ECON 202 Final- Mega Set - Assignment Essays

question

The opportunity cost of building a new civic center in your new home town would be:

answer

The highest valued bundle of other goods and services that must be foregone because of the civic center project.

question

In a market-based economy,

answer

Buyers and sellers gain from voluntary exchange.

question

If someone is considering sunk costs when making a decision, what are they doing?

answer

Prudently considering all aspects of the project's finances.

question

Bill Bonecrusher graduates from college with a choice of playing professional football at $2 million a year or coaching for $50,000 a year. He decides to play football, but eight years later, though he could continue to play football at $2 million a year, he quits football to make movies for $3 million a year. His opportunity cost at graduation was ________ and eight years later the opportunity cost of making movies was ________.

answer

$50,000
$2 million

question

Moving from point b to point e requires

answer

(Graph)Can never be accomplished

question

Economic growth can be pictured in a production possibility frontier diagram by

answer

Shifting the production possibility frontier outward.

question

Entrepreneurship refers to

answer

Persons who are risk-taking and who develop new ways of doing things.

question

Which of the following is not "capital", as economists use the term?

answer

An office building

question

Based on the movie I, Pencil, the knowledge necessary to make a pencil is generally known by:

answer

No one

question

Suppose that your tuition to attend college is $16,000 per year and you spend $6,000 per year on room and board. If you were working full time, you could earn $20,000 per year. What is your opportunity cost of attending college for one year?

answer

$36,000

question

Given that an economy is operating efficiently, what is the opportunity cost of increasing production of manufactured products from 300 tons to 500 tons per year?

answer

(Graph)
200 tons of agricultural products per year.

question

The _______ the opportunity cost of doing something, the _______ likely it will be done.

answer

Higher;
less

question

Customarily, economists classify resources into these major groups:

answer

Land, Labor, Capital, and Entrepreneurship.

question

If an economy is operating at a point inside the production possibilities curve,

answer

Its resources are being wasted.

question

Increasing opportunity cost while moving along a production possibility frontier is due to

answer

The fact that resources are not equally productive in alternative uses.

question

Legislature to protect red-cockaded woodpeckers created incentives that resulted in premature harvesting of trees the woodpeckers like to nest in. This is an example of which of the following?

answer

Good intentions have unintended consequences that so not always lead to desired outcomes.

question

The marginal benefit is the

answer

Additional gain from one more unit of an activity.

question

The "coincidence of wants" problem associated with the barter refers to the fact that

answer

For exchange to occur each transactor must have a product which the other transactor wants.

question

Scarcity exists when

answer

There is less of a good or resource available than people wish to have.

question

If the equilibrium price of a good decreases and the equilibrium quantity of the good decreases, we can conclude that

answer

Demand decreased.

question

Suppose that a product benefits from a successful advertising campaign. The result is that

answer

The demand for the product increases.

question

Nine to twelve months following the lockdown due to COVID, several countries saw a spike in child births. Given this surge, one would expect that in the disposable diaper market

answer

The price and quantity sold to increase.

question

Suppose people buy more of a good when the price of another good falls. These goods are

answer

Complements.

question

If the actual price of t shirts is $7, there is

answer

(Graph)
A shortage of 8 t-shirts.

question

The quantity demanded of a good is

answer

The amount of a good that buyers are willing to purchase at a given market price.

question

If the demand for one good decreases when the price of another good increases, the two goods are _______ goods.

answer

Complementary.

question

Which of the following was NOT in the top 10 countries in terms of Economic Freedom according to the Heritage Foundation

answer

United States.

question

While intuitively it makes sense that a demand curve is downward sloping, the technical rationale for the consumer's inverse relationship between price and quantity demand is

answer

The law of decreasing marginal benefits.

question

At the Super Bowl, ticket scalpers charge prices high above the tickets face value price. This observation is evidence of

answer

A shortage at face value ticket prices.

question

An economy in which people voluntarily exchange of goods and services is prohibited and government central planners determine the use and distribution of resources is called a

answer

Command economy.

question

The law of Supply states that

answer

There is a positive relationship between price and quantity supplied, all else constant.

question

The lowest opportunity costs between two countries producing a good is known as a(n)

answer

Comparative advantage.

question

A change in the quantity demanded of a product is the result of a change in

answer

The price of a good.

question

In the goods market of the circular flow model,

answer

Consumers buy finished products from firms.

question

The money payments made to owners of land, labor, capital, and entrepreneurial ability are

answer

Rent, wages, interest, and profits respectively.

question

When a market is in equilibrium

answer

There is no shortage and no surplus at the equilibrium price.

question

According to the law of increasing opportunity costs

answer

The slope of the supply curve is positive.

question

The general relationship between economic freedom and per capita (per person) income is

answer

Positive- higher economic freedom leads to a higher per capita income.

question

Price floors and price ceilings

answer

Are result of government intervention to change market equilibriums.

question

An increase in the number of buyers in the market causes

answer

An increase in demand.

question

A price floor on corn would have the effect of

answer

Creating a surplus when the price floor is set above the equilibrium price.

question

An important determinant of the amount of grains harvested next year by Ethiopian farmers is the amount of seeds planted this year. Given that Western nations have guaranteed to donate five hundred tons of grain next year, this year the Ethiopian farmers will:

answer

Plant less seeds as the price of grain will be lower with the food aid.

question

Between 2000 and 2013 the price of heroin decreased from $235 per gram to $76. Over the same period, the quantity of heroin consumed increased from 376 metric tons to 482 metric tons. What is the most likely explanation for these results?

answer

Poppy, a necessary component of heroin, production is very high, increasing supply of heroin.

question

A binding quantity restriction (quota) leads to a price _____ the free market equilibrium price.

answer

Above

question

The price elasticity of demand reflects the responsiveness of:

answer

Quantity demanded to a change in price.

question

The government sometimes creates an excess demand for a product by setting a maximum price at which the product may be sold to consumers. This is sometimes called a

answer

Price ceiling.

question

Assume that tortilla chips and salsa are complements. When the price of tortilla chips decreases

answer

The demand for salsa increases.

question

As illustrated above, if your city imposes a tax of $100 per apartment:

answer

(Graph)
Consumers pay $60 and landlords pay $40 tax per apartment.

question

A response to a price change would be described as a:

answer

Change in the elasticity of a supply curve.

question

If the price elasticity of demand is -0.5, this means that a _______ increase in price causes a _______ decrease in quantity demanded.

answer

30%; 15%

question

One can say with certainty that equilibrium price declines when supply

answer

Increases and demand decreases.

question

A binding minimum wage law will

answer

Cause unemployment for some affected workers.

question

If a product has only a few acceptable substitutes, demand for the product is most likely to be:

answer

Inelastic.

question

If government implements a $10 price floor, the result would be

answer

(Graph) A shortage of 200 units.

question

The quantity demanded of a product increases as

answer

The price of the product falls.

question

Assume that land suitable for growing corn is also suitable for growing soybeans. A decrease in the price of corn will, over time,

answer

Increase the supply for corn.

question

A decrease in supply would result from:

answer

An increase in the prices of input resources

question

Variable costs are those that

answer

Change with the level of production.

question

It would be possible to produce the world's present supply of wheat in a single flowerpot if it were not for the

answer

Law of diminishing marginal returns.

question

The marginal product figures in blanks D and E are respectively

answer

(Marginal Product Chart)
15, 10

question

What is the average total cost of producing 45 units of output?

answer

(Marginal Product Chart)
$2.44

question

In the range where the total product of labor increases at a decreasing rate

answer

Capital has begun to constrain productive benefits from division of labor.

question

The income elasticity of demand is

answer

Positive for a normal good and negative for an inferior good.

question

The demand for emergency medical care (within a range of prices the person can afford) is probably:

answer

Perfectly inelastic.

question

Titanic State University raises tuition for the purpose of increasing its revenue so that more faculty can be hired. TSU is assuming that the demand for education at TSU is

answer

Relatively inelastic.

question

Benjamin operates a bookstore. His monthly revenue is $20,000, while his explicit, out of pocket costs to others (ie. cashiers, custodians, suppliers etc.) total $15,000 per month. If Benjamin were to discontinue his operation of the bookstore, he would work as a librarian with a monthly salary of $4,000. Which of the following statements is correct?

answer

Benjamin's accounting profit is $5,000, while his economic profit is $1,000.

question

Marginal cost and average variable cost are equal at the output at which

answer

Marginal cost is a minimum.

question

Specialization in production is economically beneficial primarily because it

answer

Permits the production of a larger output with fixed amounts of resources.

question

The marginal product of labor is the

answer

Change in output from using one more unit of labor.

question

The greatest economic burden of a tax is borne by

answer

The more inelastic party in the market.

question

The curve labeled "a" represents the firm's

answer

(Costs Per Unit Graph)
Marginal cost curve.

question

The curve labeled "c" represents the firm's

answer

(Costs Per Unit Graph)
Average variable cost curve.

question

The short-run is a period of time in which

answer

At least one factor of production is fixed.

question

A firm's short-run total product curve shows

answer

How the amount of output changes when the quantity of labor changes.

question

If economic profit is equal to zero, then

answer

The entrepreneur is earning a normal rate of return.

question

A firm's primary objective is best describes as

answer

Maximizing profit.

question

A competitive firm shuts down if the price of its product is

answer

Less than its minimum average variable cost.

question

The market structure in which firms have as much market power as a firm can have is a(n)

answer

Monopoly.

question

A firm's marginal cost curve above the minimum of the average variable cost curve is also:

answer

The firm's short-run supply curve.

question

In competition, an individual firm

answer

Determines the quantity it sells in the marketplace but has no influence over its price.

question

The USDA maintains ethanol has an impact on food prices. "Higher ethanol production definitely and directly raises the price of corn," said USDA economist Ephraim Leibtag. In the long run in the corn market, what is true I'd the production of ethanol increases?

answer

New corn farmers will enter the market and decrease the market price.

question

You notice that the price of butter falls and then rises. The best explanation for this is that: the demand for butter

answer

Decreased causing the price to fall, which induced other firms to exit the market causing supply to decrease, which caused the price to go back up.

question

In the short-run, a competitive firm's economic profits

answer

Must be positive, negative (an economic loss), or zero (a normal profit).

question

Which of the following is a defining characteristic of a competitive market?

answer

No restrictions on entry into the industry.

question

If average total cost > average variable cost > price, a profit maximizing firm in a competitive market should:

answer

Shut down in the short-run.

question

If firms in a competitive industry are making zero economic profit, then

answer

There is no incentive for either entry or exit.

question

Marginal revenue is equal to

answer

The change in total revenue divided by the change in quantity sold.

question

In the above figure, the firm will produce

answer

(Price and Quantity Graph)
20 units.

question

In the above figure, the firm's total economic profit is equal to

answer

(Price and Quantity Graph)
$60.

question

A monopoly's economic profit is maximized by producing the amount of output such that

answer

Marginal revenue equals marginal cost

question

When a firm is considered to be a "price taker" that means that the firm

answer

Cannot influence the market price of the good that it sells.

question

A firm's interest in obtaining market power suggests they'd like to

answer

Have the ability to alter the market price.

question

The above figure illustrates a firm's total revenue and total cost curves. Which of the following statements is FALSE?

answer

(Total Revenue & Total Cost and Quantity Graph)
At output Q2 the firm incurs an economic loss.

question

When new firms enter a market, the entry shifts the short-run market supply curve _________, the market price _________, and each firm's economic profit __________.

answer

Rightward;
falls;
decreases.

question

In competition, the marginal revenue of an individual firm

answer

Equals the price of the product.

question

In the long run, the main reason that a monopolist can earn positive economic profits while a perfectly run firm cannot is:

answer

There are no barriers to entry in a perfectly competitive market.

question

Price discrimination is when a firm charges:

answer

Different prices for the same goods to different consumers.

question

Which market structure is characterized by several firms competing for small portions of the market through product differentiation?

answer

Monopolistic competition.

question

Price discrimination is related to elasticity because:

answer

The firm can increase revenues by charging customers with elastic demands lower prices and charging customers with inelastic demands higher prices.

question

A firm that has market power has the ability:

answer

To affect the price of its own product.

question

A monopolistically competitive firm maximizes profits by producing at the point where

answer

Marginal revenue equals marginal cost.

question

The economic inefficiency of a monopolist can be measured by

answer

The deadweight loss.

question

Monopolistically competitive firms differentiate their products by

answer

Selling products with slightly different physical characteristics
Selling products at different locations
Creating awareness of the product or product image through advertising
(Answer is All of the Above)

question

A single price monopolist will set its profit maximizing level of production where

answer

MR=MC
(Marginal revenue = marginal cost)

question

In the short run, monopolistic competition can

answer

Earn an economic profit.

question

Given that a monopolist acts in a profit maximizing manner, the above illustrates a monopolist:

answer

(Graph)
Make a positive economic profit.

question

The perfectly competitive firm charges a price ______ while the monopolistic competitor firm charges a price _______.

answer

Equal to marginal cost;
Greater than marginal cost

question

A market that involves only one seller of a non-substitutional good or service is known as

answer

Monopoly

question

When a market has "barriers to entry", it refers to:

answer

Factors that prevent other firms from challenging a firm with market power.

question

A monopolistic firm is producing at an output level in the short run where average total cost is $3.50, price is $3.00, marginal revenue is $1.50, and marginal cost is $1.50. The firm is operating

answer

With an economic loss in the short run.

question

Which of the following conditions would prevent a firm from being able to price discrimination?

answer

The inability to identify those customers willing to pay more.

question

The monopolistic competitive firm

answer

Faces a downward-sloping demand curve and therefore is a price seeker.

question

What area represents consumer surplus if a monopoly exercises market power in this market?

answer

(Graph)
A

question

What area represents deadweight loss if a monopoly exercises market power in this market?

answer

(Graph)
C + E

1 of 114

question

The opportunity cost of building a new civic center in your new home town would be:

answer

The highest valued bundle of other goods and services that must be foregone because of the civic center project.

question

In a market-based economy,

answer

Buyers and sellers gain from voluntary exchange.

question

If someone is considering sunk costs when making a decision, what are they doing?

answer

Prudently considering all aspects of the project's finances.

question

answer

$50,000
$2 million

question

Moving from point b to point e requires

answer

(Graph)Can never be accomplished

question

Economic growth can be pictured in a production possibility frontier diagram by

answer

Shifting the production possibility frontier outward.

question

Entrepreneurship refers to

answer

Persons who are risk-taking and who develop new ways of doing things.

question

Which of the following is not "capital", as economists use the term?

answer

An office building

question

Based on the movie I, Pencil, the knowledge necessary to make a pencil is generally known by:

answer

No one

question

answer

$36,000

question

Given that an economy is operating efficiently, what is the opportunity cost of increasing production of manufactured products from 300 tons to 500 tons per year?

answer

(Graph)
200 tons of agricultural products per year.

question

The _______ the opportunity cost of doing something, the _______ likely it will be done.

answer

Higher;
less

question

Customarily, economists classify resources into these major groups:

answer

Land, Labor, Capital, and Entrepreneurship.

question

If an economy is operating at a point inside the production possibilities curve,

answer

Its resources are being wasted.

question

Increasing opportunity cost while moving along a production possibility frontier is due to

answer

The fact that resources are not equally productive in alternative uses.

question

Legislature to protect red-cockaded woodpeckers created incentives that resulted in premature harvesting of trees the woodpeckers like to nest in. This is an example of which of the following?

answer

Good intentions have unintended consequences that so not always lead to desired outcomes.

question

The marginal benefit is the

answer

Additional gain from one more unit of an activity.

question

The "coincidence of wants" problem associated with the barter refers to the fact that

answer

For exchange to occur each transactor must have a product which the other transactor wants.

question

Scarcity exists when

answer

There is less of a good or resource available than people wish to have.

question

If the equilibrium price of a good decreases and the equilibrium quantity of the good decreases, we can conclude that

answer

Demand decreased.

question

Suppose that a product benefits from a successful advertising campaign. The result is that

answer

The demand for the product increases.

question

Nine to twelve months following the lockdown due to COVID, several countries saw a spike in child births. Given this surge, one would expect that in the disposable diaper market

answer

The price and quantity sold to increase.

question

Suppose people buy more of a good when the price of another good falls. These goods are

answer

Complements.

question

If the actual price of t shirts is $7, there is

answer

(Graph)
A shortage of 8 t-shirts.

question

The quantity demanded of a good is

answer

The amount of a good that buyers are willing to purchase at a given market price.

question

If the demand for one good decreases when the price of another good increases, the two goods are _______ goods.

answer

Complementary.

question

Which of the following was NOT in the top 10 countries in terms of Economic Freedom according to the Heritage Foundation

answer

United States.

question

While intuitively it makes sense that a demand curve is downward sloping, the technical rationale for the consumer's inverse relationship between price and quantity demand is

answer

The law of decreasing marginal benefits.

question

At the Super Bowl, ticket scalpers charge prices high above the tickets face value price. This observation is evidence of

answer

A shortage at face value ticket prices.

question

An economy in which people voluntarily exchange of goods and services is prohibited and government central planners determine the use and distribution of resources is called a

answer

Command economy.

question

The law of Supply states that

answer

There is a positive relationship between price and quantity supplied, all else constant.

question

The lowest opportunity costs between two countries producing a good is known as a(n)

answer

Comparative advantage.

question

A change in the quantity demanded of a product is the result of a change in

answer

The price of a good.

question

In the goods market of the circular flow model,

answer

Consumers buy finished products from firms.

question

The money payments made to owners of land, labor, capital, and entrepreneurial ability are

answer

Rent, wages, interest, and profits respectively.

question

When a market is in equilibrium

answer

There is no shortage and no surplus at the equilibrium price.

question

According to the law of increasing opportunity costs

answer

The slope of the supply curve is positive.

question

The general relationship between economic freedom and per capita (per person) income is

answer

Positive- higher economic freedom leads to a higher per capita income.

question

Price floors and price ceilings

answer

Are result of government intervention to change market equilibriums.

question

An increase in the number of buyers in the market causes

answer

An increase in demand.

question

A price floor on corn would have the effect of

answer

Creating a surplus when the price floor is set above the equilibrium price.

question

answer

Plant less seeds as the price of grain will be lower with the food aid.

question

answer

Poppy, a necessary component of heroin, production is very high, increasing supply of heroin.

question

A binding quantity restriction (quota) leads to a price _____ the free market equilibrium price.

answer

Above

question

The price elasticity of demand reflects the responsiveness of:

answer

Quantity demanded to a change in price.

question

The government sometimes creates an excess demand for a product by setting a maximum price at which the product may be sold to consumers. This is sometimes called a

answer

Price ceiling.

question

Assume that tortilla chips and salsa are complements. When the price of tortilla chips decreases

answer

The demand for salsa increases.

question

As illustrated above, if your city imposes a tax of $100 per apartment:

answer

(Graph)
Consumers pay $60 and landlords pay $40 tax per apartment.

question

A response to a price change would be described as a:

answer

Change in the elasticity of a supply curve.

question

If the price elasticity of demand is -0.5, this means that a _______ increase in price causes a _______ decrease in quantity demanded.

answer

30%; 15%

question

One can say with certainty that equilibrium price declines when supply

answer

Increases and demand decreases.

question

A binding minimum wage law will

answer

Cause unemployment for some affected workers.

question

If a product has only a few acceptable substitutes, demand for the product is most likely to be:

answer

Inelastic.

question

If government implements a $10 price floor, the result would be

answer

(Graph) A shortage of 200 units.

question

The quantity demanded of a product increases as

answer

The price of the product falls.

question

Assume that land suitable for growing corn is also suitable for growing soybeans. A decrease in the price of corn will, over time,

answer

Increase the supply for corn.

question

A decrease in supply would result from:

answer

An increase in the prices of input resources

question

Variable costs are those that

answer

Change with the level of production.

question

It would be possible to produce the world's present supply of wheat in a single flowerpot if it were not for the

answer

Law of diminishing marginal returns.

question

The marginal product figures in blanks D and E are respectively

answer

(Marginal Product Chart)
15, 10

question

What is the average total cost of producing 45 units of output?

answer

(Marginal Product Chart)
$2.44

question

In the range where the total product of labor increases at a decreasing rate

answer

Capital has begun to constrain productive benefits from division of labor.

question

The income elasticity of demand is

answer

Positive for a normal good and negative for an inferior good.

question

The demand for emergency medical care (within a range of prices the person can afford) is probably:

answer

Perfectly inelastic.

question

Titanic State University raises tuition for the purpose of increasing its revenue so that more faculty can be hired. TSU is assuming that the demand for education at TSU is

answer

Relatively inelastic.

question

answer

Benjamin's accounting profit is $5,000, while his economic profit is $1,000.

question

Marginal cost and average variable cost are equal at the output at which

answer

Marginal cost is a minimum.

question

Specialization in production is economically beneficial primarily because it

answer

Permits the production of a larger output with fixed amounts of resources.

question

The marginal product of labor is the

answer

Change in output from using one more unit of labor.

question

The greatest economic burden of a tax is borne by

answer

The more inelastic party in the market.

question

The curve labeled "a" represents the firm's

answer

(Costs Per Unit Graph)
Marginal cost curve.

question

The curve labeled "c" represents the firm's

answer

(Costs Per Unit Graph)
Average variable cost curve.

question

The short-run is a period of time in which

answer

At least one factor of production is fixed.

question

A firm's short-run total product curve shows

answer

How the amount of output changes when the quantity of labor changes.

question

If economic profit is equal to zero, then

answer

The entrepreneur is earning a normal rate of return.

question

A firm's primary objective is best describes as

answer

Maximizing profit.

question

A competitive firm shuts down if the price of its product is

answer

Less than its minimum average variable cost.

question

The market structure in which firms have as much market power as a firm can have is a(n)

answer

Monopoly.

question

A firm's marginal cost curve above the minimum of the average variable cost curve is also:

answer

The firm's short-run supply curve.

question

In competition, an individual firm

answer

Determines the quantity it sells in the marketplace but has no influence over its price.

question

answer

New corn farmers will enter the market and decrease the market price.

question

You notice that the price of butter falls and then rises. The best explanation for this is that: the demand for butter

answer

Decreased causing the price to fall, which induced other firms to exit the market causing supply to decrease, which caused the price to go back up.

question

In the short-run, a competitive firm's economic profits

answer

Must be positive, negative (an economic loss), or zero (a normal profit).

question

Which of the following is a defining characteristic of a competitive market?

answer

No restrictions on entry into the industry.

question

If average total cost > average variable cost > price, a profit maximizing firm in a competitive market should:

answer

Shut down in the short-run.

question

If firms in a competitive industry are making zero economic profit, then

answer

There is no incentive for either entry or exit.

question

Marginal revenue is equal to

answer

The change in total revenue divided by the change in quantity sold.

question

In the above figure, the firm will produce

answer

(Price and Quantity Graph)
20 units.

question

In the above figure, the firm's total economic profit is equal to

answer

(Price and Quantity Graph)
$60.

question

A monopoly's economic profit is maximized by producing the amount of output such that

answer

Marginal revenue equals marginal cost

question

When a firm is considered to be a "price taker" that means that the firm

answer

Cannot influence the market price of the good that it sells.

question

A firm's interest in obtaining market power suggests they'd like to

answer

Have the ability to alter the market price.

question

The above figure illustrates a firm's total revenue and total cost curves. Which of the following statements is FALSE?

answer

(Total Revenue & Total Cost and Quantity Graph)
At output Q2 the firm incurs an economic loss.

question

When new firms enter a market, the entry shifts the short-run market supply curve _________, the market price _________, and each firm's economic profit __________.

answer

Rightward;
falls;
decreases.

question

In competition, the marginal revenue of an individual firm

answer

Equals the price of the product.

question

In the long run, the main reason that a monopolist can earn positive economic profits while a perfectly run firm cannot is:

answer

There are no barriers to entry in a perfectly competitive market.

question

Price discrimination is when a firm charges:

answer

Different prices for the same goods to different consumers.

question

Which market structure is characterized by several firms competing for small portions of the market through product differentiation?

answer

Monopolistic competition.

question

Price discrimination is related to elasticity because:

answer

The firm can increase revenues by charging customers with elastic demands lower prices and charging customers with inelastic demands higher prices.

question

A firm that has market power has the ability:

answer

To affect the price of its own product.

question

A monopolistically competitive firm maximizes profits by producing at the point where

answer

Marginal revenue equals marginal cost.

question

The economic inefficiency of a monopolist can be measured by

answer

The deadweight loss.

question

Monopolistically competitive firms differentiate their products by

answer

question

A single price monopolist will set its profit maximizing level of production where

answer

MR=MC
(Marginal revenue = marginal cost)

question

In the short run, monopolistic competition can

answer

Earn an economic profit.

question

Given that a monopolist acts in a profit maximizing manner, the above illustrates a monopolist:

answer

(Graph)
Make a positive economic profit.

question

The perfectly competitive firm charges a price ______ while the monopolistic competitor firm charges a price _______.

answer

Equal to marginal cost;
Greater than marginal cost

question

A market that involves only one seller of a non-substitutional good or service is known as

answer

Monopoly

question

When a market has "barriers to entry", it refers to:

answer

Factors that prevent other firms from challenging a firm with market power.

question

A monopolistic firm is producing at an output level in the short run where average total cost is $3.50, price is $3.00, marginal revenue is $1.50, and marginal cost is $1.50. The firm is operating

answer

With an economic loss in the short run.

question

Which of the following conditions would prevent a firm from being able to price discrimination?

answer

The inability to identify those customers willing to pay more.

question

The monopolistic competitive firm

answer

Faces a downward-sloping demand curve and therefore is a price seeker.

question

What area represents consumer surplus if a monopoly exercises market power in this market?

answer

(Graph)
A

question

What area represents deadweight loss if a monopoly exercises market power in this market?

answer

(Graph)
C + E

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