econ unit 4 quiz - Assignment Essays

Q: In a perfectly competitive market there are [ Select ] ["few", "many"] buyers, [ Select ] ["few", "many"] sellers producing [ Select ] ["different", "identical"] products. [ Select ] ["Only sellers", "Only buyers", "Neither buyers nor sellers", "Buyers and sellers"] have full information and [ Select ] ["only sellers", "only buyers", "neither buyers nor sellers", "buyers and sellers"] have market power.

many many identical buyers and sellers neither buyer nor sellers

question

Sue quit her $40,000 per year job and opened a coffee shop that she calls Top Brew. In the first year, Top Brew earned $200,000 in revenue. For the same year, Top Brew paid $80,000 to employees in wages, spent $40,000 on ingredients such as coffee beans, $15,000 rent for the building to house Top Brew. Sue also used $50,000 of her personal savings to purchase equipment for Top Brew, on which she was earning $4,000 in interest each year. Assuming no depreciation in the value of the equipment, Sue’s economic profit from Top Brew for the year is $

answer

21,000

question

Which of the following are examples of implicit opportunity costs for the firm?

Choose all that apply.

answer

Depreciation

The owner's time

Interest forgone

question

Consumers and producers having equal amounts of information is known as symmetric information.

answer

symmetric

question

The principal-agent problem suggests

answer

principals and agents are more likely to have the same goals if the agent's pay is tied to satisfying the principal's goals.

question

In a perfectly competitive market there are [ Select ] ["few", "many"] buyers, [ Select ] ["few", "many"] sellers producing [ Select ] ["different", "identical"] products. [ Select ] ["Only sellers", "Only buyers", "Neither buyers nor sellers", "Buyers and sellers"] have full information and [ Select ] ["only sellers", "only buyers", "neither buyers nor sellers", "buyers and sellers"] have market power.

answer

many

identical

buyers and sellers

neither buyer nor sellers

question

The short run is a period of time in which

answer

the quantity used of at least one factor of production is fixed.

question

As output increases, if marginal product is increasing, then [ Select ] ["marginal", "total", "total fixed"] cost is [ Select ] ["decreasing", "increasing"] .

answer

marginal

decreaseing

question

When a firm is producing a given output at the least possible cost, it is producing on

answer

its long-run average cost curve

question

its long-run average cost curve

answer

The market demand curve is downward sloping.

Many sellers

There are no barriers to entry or exit.

question

The demand for corn from Hoosier farms is perfectly elastic because corn from Hoosier farms is

answer

a perfect substitute for corn from other farms.

question

The profit maximizing level of output for the perfectly competitive firm occurs where

answer

market price = marginal cost

question

At the profit maximizing level of output, firms shut down when

answer

price < average variable cost

question

In the long run, perfectly competitive firms earn [ Select ] ["positive", "either positive, negative, or zero", "zero", "negative"] economic profit and [ Select ] ["positive", "zero", "either positive, negative, or zero", "negative"] accounting profit.

answer

zero

positive

question

Perfectly competitive markets are efficient because total surplus is maximized.

answer

efficient

total surplus

1 of 14

question

answer

21,000

question

Which of the following are examples of implicit opportunity costs for the firm?

Choose all that apply.

answer

Depreciation

The owner's time

Interest forgone

question

Consumers and producers having equal amounts of information is known as symmetric information.

answer

symmetric

question

The principal-agent problem suggests

answer

principals and agents are more likely to have the same goals if the agent's pay is tied to satisfying the principal's goals.

question

answer

many

identical

buyers and sellers

neither buyer nor sellers

question

The short run is a period of time in which

answer

the quantity used of at least one factor of production is fixed.

question

As output increases, if marginal product is increasing, then [ Select ] ["marginal", "total", "total fixed"] cost is [ Select ] ["decreasing", "increasing"] .

answer

marginal

decreaseing

question

When a firm is producing a given output at the least possible cost, it is producing on

answer

its long-run average cost curve

question

its long-run average cost curve

answer

The market demand curve is downward sloping.

Many sellers

There are no barriers to entry or exit.

question

The demand for corn from Hoosier farms is perfectly elastic because corn from Hoosier farms is

answer

a perfect substitute for corn from other farms.

question

The profit maximizing level of output for the perfectly competitive firm occurs where

answer

market price = marginal cost

question

At the profit maximizing level of output, firms shut down when

answer

price < average variable cost

question

answer

zero

positive

question

Perfectly competitive markets are efficient because total surplus is maximized.

answer

efficient

total surplus

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