question
when there are economies of scope between two products which are separately produced by 2 terms, merging into a single firm can:
answer
accomplish a reduction in costs
question
Which curve(s) does the marginal cost curve intersect at the (their) minimum point?
answer
average total cost curve and average variable cost curve
question
costs that are forever lost after they have been paid are
answer
sunk costs
question
costs that change as output changes are
answer
variable costs
question
changes in the price of labor cause
answer
slope changes in the isocost line
question
the absolute value of the slope of the isoquant is the
answer
marginal rate of technical substitution
question
the combinations of inputs that produce a given level of output are depicted byt
answer
isoquants
question
firm managers should use inputs at levels where the:
answer
marginal benefit equals marginal cost and value marginal product of labor equals wage
question
it is profitable to hire units of labor as long as the value of marginal product
answer
exceeds wage
question
the production function Q=L^5xK^5 is called:
answer
cobb douglas
question
which of the following are measures of industry concentration?
answer
four-firm concentration ratio and HHI index
question
An industry is comprised of 40 firms, each with an equal market share. What is the four-firm concentration ratio of this industry?
answer
0.1
question
A Herfindahl index (HHI) of 10,000 suggests
answer
monopoly
question
In perfect competition, which is NOT true?
answer
Every firm has a small but perceivable market power
question
Which of the following is true under monopoly?
answer
P > MC
question
In a competitive industry with identical firms, long-run equilibrium is characterized by:
P = AC
P = MC
MR = MC
all of the above
P = AC
P = MC
MR = MC
all of the above
answer
All of the statements associated with this question are correct
question
If a monopolistically competitive firm's marginal cost increases, then in order to maximize profits, the firm will
answer
reduce output and increase price
question
Which of the following market structures would you expect to yield the greatest product variety?
answer
Monopolistic competition
question
Which of the following features is common to both perfectly competitive markets and monopolistically competitive markets?
answer
There is free entry and long-run profits are zero
question
Economies of scale exist whenever
answer
average total costs decline as output increases.
question
Which of the following is NOT a type of market structure?
Monopolistic oligopoly
Monopolistic competition
Perfect competition
Monopoly
Monopolistic oligopoly
Monopolistic competition
Perfect competition
Monopoly
answer
Monopolistic oligopoly
question
Consider a monopoly where the inverse demand for its product is given by P = 200 − 10Q. Based on this information, the marginal revenue function is
answer
MR(Q) = 200 − 20Q
question
One of the sources of monopoly power for a monopoly may be
patents
diseconomies of scale
differentiated products
free entry and exit
patents
diseconomies of scale
differentiated products
free entry and exit
answer
patents
question
Which of the following statements concerning monopoly is NOT true?
A monopoly is always undesirable
A market may be monopolistic because there are some legal barriers
A monopoly has market power
There is some deadweight loss in a monopolistic market
A monopoly is always undesirable
A market may be monopolistic because there are some legal barriers
A monopoly has market power
There is some deadweight loss in a monopolistic market
answer
A monopoly is always undesirable
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