MACRO - Assignment Essays

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The competitive firms short run supply curve is the portion of:

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marginal cost curve at and above the minimum of average variable cost

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suppose catfish producers act as price takers and only the total variable costs of producing catfish increase, then the profit maximizing producers should

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decrease their profit maximizing quantity since marginal cost is increasing

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suppose a short run competitive firm is making an economic profit. the firms profit maximizing decision is to

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produce since price is greater than average variable cost

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if a uniform pricing monopolist is making an economic loss in the short run the firm should

answer

produce if price is greater than average variable cost

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Suppose a competitive market (or industry) in the decreasing cost (ATC) case is in long-run equilibrium. If demand decreases then the new long-run equilibrium price will be

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higher and long-run market output will be lower

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In terms of economic welfare, a uniform pricing monopolist results in:

answer

a. lower consumer surplus and lower total surplus than a competitive market

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If Q=10, then ATC=$5; and if Q=11, then ATC=$6. If a price-taking firm sells the 11th unit of output at a price of $25, the price-taking firm will:

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c. increase its profits, since marginal revenue is greater than marginal cost

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The long-run supply curve is:

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a. upward sloping if the market has increasing costs

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A monopolistically competitive firm's demand curve is downward sloping since:

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d. products/services are differentiated

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10. A profit-maximizing uniform pricing monopolist should never produce in the:

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b. inelastic portion of consumer demand, since MR < MC

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11. As compared to profit maximization, a revenue maximizing monopolist's:

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d. output, price and profits are less than a uniform pricing monopolist

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If the monopolist changes from personalized pricing to uniform pricing we can expect:

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d. total revenue to decrease and quantity to decrease

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iTunes has switched from uniform pricing to group pricing. If iTunes has constant marginal cost, then to maximize profits, iTunes charges:

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a. higher prices to the group with a more inelastic demand

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The long-run monopolistically competitive firm is similar to the long-run competitive firm since:

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c. profit will be zero

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If a profit maximizing monopolist advertised, then economically this should:

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b. increase their demand and increase the price elasticity of demand

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Suppose a pizzeria sells pizza for $2 a slice of pizza. If the firm sold 10,000 slices last month, and incurred a total cost of $15,000 were fixed costs, then we can conclude that:

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c. AR= $2 and ATC=$1.50

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The firm has economies of scale when:

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d. average total cost is greater than marginal cost

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18. A firm produces 100 units of output at a total cost of $1,000. If total fixed costs are $300 what are average fixed cost

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b. average fixed cost is $3

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Demand is perfectly elastic as viewed by the competitive firm because:

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b. the firm engages in price-taking behavior

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The competitive firm's maximizing level of output is determined by:

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a. setting price equal to marginal cost

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1. A revenue maximizing monopolist's:

answer

d. output is greater, but price and profits are lower than a uniform pricing monopolist.

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2. In the short-run if a monopolist changes from uniform pricing to personalized pricing we can expect:

answer

a. total revenue and profit to increase.

question

3. iTunes has switched from uniform pricing to group pricing. If iTunes has constant marginal cost, then to maximize profits, iTunes charges:

answer

b. lower prices to the group with a more elastic demand.

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4. The monopolistically competitive firm maximizes profits in the short-run if:

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d. marginal revenue equals marginal cost.

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5. If a profit maximizing monopolist advertised, then economically this should:

answer

c. increase their demand and decrease the price elasticity of demand.

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6. Suppose a pizzeria sells pizza for $1/slice of pizza. if the firm sold 16,000 slices last month, and incurred a total cost of $12000 of which $8000 were fixed cost, then we can conclude that:

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c. AVC=$.025 and ATC=$0.75

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7. Suppose a pizzeria sells pizza for $1/slice of pizza. if the firm sold 16,000 slices last month, and incurred a total cost of $12000 of which $8000 were fixed cost, then we can conclude that:

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d. AFC=$0.50 and economic profit=$4000

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8. a firm produces 300 units of output at a total cost of $1000. If total fixed costs are $100:

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a. average variable cost is $3.

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9. demand is perfectly elastic as viewed by the competitive firm because:

answer

b. the firm engages in price-taking behavior.

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10. The competitive firm's profit maximizing level of output is determined by:

answer

c. setting price equal to marginal cost.

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11. The competitive firm's short-run supply curve is the portion of the:

answer

a. marginal cost curve at & above the minimum of average variable cost.

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12. Suppose Ethiopian coffee producers act as price takers when selling coffee and only the total fixed costs of producing coffee increase, the profit maximizing coffee producers should:

answer

c. not change their profit maximizing quantity even though profits are decreasing.

question

Suppose a short-run competitive firm is making an economic profit. The firm's profit-maximizing decision is to

answer

b. produce since price is greater than average variable cost.

question

If a short-run competitive firm is making an economic loss, the firm should:

answer

d. produce if their loss of producing is less than their total fixed costs.

question

15. Suppose a competitive market (or industry) with constant ATC is in long-run equilibrium. If demand decrease than supply curve will:

answer

a. shift left due to firms exiting the market in the long-run.

question

In terms of economic welfare, a uniform pricing monopolist results in:

answer

c. lower consumer surplus and greater producer surplus than a competitive market.

question

17. If Q= 80 then ATC= $140; and if Q=81, then ATC=$141. If a price-taking firm sells the 81st unit of output at a price of $200, the price taking firm will:

answer

b. reduce its profits, since marginal revenue is less than marginal cost.

question

18. a uniform pricing monopolist has market power since price is:

answer

d. greater than marginal cost.

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A competitive firm's output is:

answer

c. higher and price is lower than a monopolistically competitive firm

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A profit-maximizing uniform pricing monopolist should never produce in the:

answer

b. inelastic portion of consumer demand, since MR<MC.

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question

The competitive firms short run supply curve is the portion of:

answer

marginal cost curve at and above the minimum of average variable cost

question

suppose catfish producers act as price takers and only the total variable costs of producing catfish increase, then the profit maximizing producers should

answer

decrease their profit maximizing quantity since marginal cost is increasing

question

suppose a short run competitive firm is making an economic profit. the firms profit maximizing decision is to

answer

produce since price is greater than average variable cost

question

if a uniform pricing monopolist is making an economic loss in the short run the firm should

answer

produce if price is greater than average variable cost

question

Suppose a competitive market (or industry) in the decreasing cost (ATC) case is in long-run equilibrium. If demand decreases then the new long-run equilibrium price will be

answer

higher and long-run market output will be lower

question

In terms of economic welfare, a uniform pricing monopolist results in:

answer

a. lower consumer surplus and lower total surplus than a competitive market

question

If Q=10, then ATC=$5; and if Q=11, then ATC=$6. If a price-taking firm sells the 11th unit of output at a price of $25, the price-taking firm will:

answer

c. increase its profits, since marginal revenue is greater than marginal cost

question

The long-run supply curve is:

answer

a. upward sloping if the market has increasing costs

question

A monopolistically competitive firm's demand curve is downward sloping since:

answer

d. products/services are differentiated

question

10. A profit-maximizing uniform pricing monopolist should never produce in the:

answer

b. inelastic portion of consumer demand, since MR < MC

question

11. As compared to profit maximization, a revenue maximizing monopolist's:

answer

d. output, price and profits are less than a uniform pricing monopolist

question

If the monopolist changes from personalized pricing to uniform pricing we can expect:

answer

d. total revenue to decrease and quantity to decrease

question

iTunes has switched from uniform pricing to group pricing. If iTunes has constant marginal cost, then to maximize profits, iTunes charges:

answer

a. higher prices to the group with a more inelastic demand

question

The long-run monopolistically competitive firm is similar to the long-run competitive firm since:

answer

c. profit will be zero

question

If a profit maximizing monopolist advertised, then economically this should:

answer

b. increase their demand and increase the price elasticity of demand

question

Suppose a pizzeria sells pizza for $2 a slice of pizza. If the firm sold 10,000 slices last month, and incurred a total cost of $15,000 were fixed costs, then we can conclude that:

answer

c. AR= $2 and ATC=$1.50

question

The firm has economies of scale when:

answer

d. average total cost is greater than marginal cost

question

18. A firm produces 100 units of output at a total cost of $1,000. If total fixed costs are $300 what are average fixed cost

answer

b. average fixed cost is $3

question

Demand is perfectly elastic as viewed by the competitive firm because:

answer

b. the firm engages in price-taking behavior

question

The competitive firm's maximizing level of output is determined by:

answer

a. setting price equal to marginal cost

question

1. A revenue maximizing monopolist's:

answer

d. output is greater, but price and profits are lower than a uniform pricing monopolist.

question

2. In the short-run if a monopolist changes from uniform pricing to personalized pricing we can expect:

answer

a. total revenue and profit to increase.

question

3. iTunes has switched from uniform pricing to group pricing. If iTunes has constant marginal cost, then to maximize profits, iTunes charges:

answer

b. lower prices to the group with a more elastic demand.

question

4. The monopolistically competitive firm maximizes profits in the short-run if:

answer

d. marginal revenue equals marginal cost.

question

5. If a profit maximizing monopolist advertised, then economically this should:

answer

c. increase their demand and decrease the price elasticity of demand.

question

6. Suppose a pizzeria sells pizza for $1/slice of pizza. if the firm sold 16,000 slices last month, and incurred a total cost of $12000 of which $8000 were fixed cost, then we can conclude that:

answer

c. AVC=$.025 and ATC=$0.75

question

7. Suppose a pizzeria sells pizza for $1/slice of pizza. if the firm sold 16,000 slices last month, and incurred a total cost of $12000 of which $8000 were fixed cost, then we can conclude that:

answer

d. AFC=$0.50 and economic profit=$4000

question

8. a firm produces 300 units of output at a total cost of $1000. If total fixed costs are $100:

answer

a. average variable cost is $3.

question

9. demand is perfectly elastic as viewed by the competitive firm because:

answer

b. the firm engages in price-taking behavior.

question

10. The competitive firm's profit maximizing level of output is determined by:

answer

c. setting price equal to marginal cost.

question

11. The competitive firm's short-run supply curve is the portion of the:

answer

a. marginal cost curve at & above the minimum of average variable cost.

question

12. Suppose Ethiopian coffee producers act as price takers when selling coffee and only the total fixed costs of producing coffee increase, the profit maximizing coffee producers should:

answer

c. not change their profit maximizing quantity even though profits are decreasing.

question

Suppose a short-run competitive firm is making an economic profit. The firm's profit-maximizing decision is to

answer

b. produce since price is greater than average variable cost.

question

If a short-run competitive firm is making an economic loss, the firm should:

answer

d. produce if their loss of producing is less than their total fixed costs.

question

15. Suppose a competitive market (or industry) with constant ATC is in long-run equilibrium. If demand decrease than supply curve will:

answer

a. shift left due to firms exiting the market in the long-run.

question

In terms of economic welfare, a uniform pricing monopolist results in:

answer

c. lower consumer surplus and greater producer surplus than a competitive market.

question

17. If Q= 80 then ATC= $140; and if Q=81, then ATC=$141. If a price-taking firm sells the 81st unit of output at a price of $200, the price taking firm will:

answer

b. reduce its profits, since marginal revenue is less than marginal cost.

question

18. a uniform pricing monopolist has market power since price is:

answer

d. greater than marginal cost.

question

A competitive firm's output is:

answer

c. higher and price is lower than a monopolistically competitive firm

question

A profit-maximizing uniform pricing monopolist should never produce in the:

answer

b. inelastic portion of consumer demand, since MR<MC.

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