question
an oligopoly is defined as having
answer
a few inderdependent firms who are keenly aware of each other's strategies
question
which type of market does a single firm have the most power?
answer
Monopoly
question
A firm should shutdown at any price below which price on a graph?
answer
Where AVC hits the lowest point on the graph
question
A perfectly competitive firm will maximize profits by choosing an output level where..
answer
Price equals marginal cost
question
as the output of a firm continues to rise, the AFC continues to..
answer
Decline
question
For the perfectly competitive firm, the marginal revenue is always
answer
constant
question
Economies of scale happen when..
answer
use of larger machines
Specialization: technology, equipment, labor
Volume discounts
Specialization: technology, equipment, labor
Volume discounts
question
competitive firms cannot individually affect market price because..
answer
their individual production is insignificant relative to the production of the industry.
question
a perfectly competitive firm should expand output when
answer
P > MC
question
when a producer can control the market price for the good it sells, the producer:
answer
has market power
question
which cost doesn't change when output changes in the short run?
answer
Fixed costs
question
in order to sell additional units of their product, competitive firms must
answer
increase output
question
A U-shaped average total cost curve implies the first
answer
marginal cost below average total cost, and then marginal cost above average total cost
question
variable costs
answer
labor
Material costs
Material costs
question
the shutdown of a firm will occur if the price is equal to
answer
AVC
question
If the market price of an item is $10 and the AVC is either at or below the price of $10, the firm will..
answer
incur a loss. this is because the item is going to cost more to make then the selling price.
question
a perfectly competitive firm will maximize profits by choosing an output level where
Price is greater than marginal cost.
Price equals marginal cost.
Price is greater than total cost.
Price equals total cost
Price is greater than marginal cost.
Price equals marginal cost.
Price is greater than total cost.
Price equals total cost
answer
price equals marginal cost
question
If a firm produces a level of output at the marketprice, it will earn..
A profit, although not the maximum profit possible.
A loss greater than necessary.
The minimum loss possible.
The maximum profit possible.
A profit, although not the maximum profit possible.
A loss greater than necessary.
The minimum loss possible.
The maximum profit possible.
answer
the minimum loss possible
question
competitive firms CANNOT individually affect market price because
There is an infinite demand for their goods.
Their individual production is insignificant relative to the production of the industry.
The government exercises control over the market power of competitive firms.
Demand is perfectly inelastic for their goods.
There is an infinite demand for their goods.
Their individual production is insignificant relative to the production of the industry.
The government exercises control over the market power of competitive firms.
Demand is perfectly inelastic for their goods.
answer
Their individual production is insignificant relative to the production of the industry.
question
if a firm produces a level of output at a point on the graph that is marked on the marketprice, but is lower in quantity it will earn..
A profit, although not the maximum profit possible.
A loss greater than necessary.
The minimum loss possible.
The maximum profit possible.
A profit, although not the maximum profit possible.
A loss greater than necessary.
The minimum loss possible.
The maximum profit possible.
answer
a loss greater than necessary
question
Economies of scale occur when
The firm uses more specialized technology or equipment in production.
Labor and management specialize in their activities more.
The firm can take advantage of volume discounts.
All of the above are correct.
The firm uses more specialized technology or equipment in production.
Labor and management specialize in their activities more.
The firm can take advantage of volume discounts.
All of the above are correct.
answer
all of the above are correct
question
greater labor productivity means
Higher labor cost per unit of output.
Higher output per worker.
Lower output per worker.
Lower output per labor-hour.
Higher labor cost per unit of output.
Higher output per worker.
Lower output per worker.
Lower output per labor-hour.
answer
higher output per worker
question
a firm will produce a level of output on a graph where..
answer
MC meets with the Price
question
In the short run, which of the following is most likely a variable cost?
Property taxes.
Income taxes.
Labor and raw materials costs.
Contractual lease payments.
Property taxes.
Income taxes.
Labor and raw materials costs.
Contractual lease payments.
answer
labor and raw materials costs
question
True or False
diminishing marginal returns will appear when you begin to see a decline in the different between the output.
diminishing marginal returns will appear when you begin to see a decline in the different between the output.
answer
True
question
a perfectly competitive firm should expand output when
answer
P > MC
question
Oligopoly is defined as having
Low Barriers to Entry.
No market power.
Many, many, many firms.
A few interdependent firms who are keenly aware of each other's strategies.
Low Barriers to Entry.
No market power.
Many, many, many firms.
A few interdependent firms who are keenly aware of each other's strategies.
answer
A few interdependent firms who are keenly aware of each other's strategies.
question
profit per unit is equal to
answer
P - ATC
question
In order to sell additional units of their product, competitive firms must:
Increase their advertising.
Lower their price.
Cut their expenses.
Increase output
#5
Increase their advertising.
Lower their price.
Cut their expenses.
Increase output
#5
answer
increase output
question
A perfectly competitive firm will maximize profits by choosing an output level where
Price equals total cost.
Price equals marginal cost.
Price is greater than marginal cost.
Price is greater than total cost
Price equals total cost.
Price equals marginal cost.
Price is greater than marginal cost.
Price is greater than total cost
answer
Price equals marginal cost
question
When a producer can control the market price for the good it sells, the producer:
Has market power.
Is an entrepreneur.
Is a perfectly competitive firm.
Is certain to make a profit.
#23
Has market power.
Is an entrepreneur.
Is a perfectly competitive firm.
Is certain to make a profit.
#23
answer
has market power
question
For the perfectly competitive firm, the marginal revenue is always
Increasing.
Constant.
Equal to average total cost.
Decreasing.
Increasing.
Constant.
Equal to average total cost.
Decreasing.
answer
constant
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