MicroEcon - Assignment Essays

question

What are the characteristics of a competitive market

answer

buying and selling standardized products
a large number of buyers and sellers acting independently.

question

A _____ the demand curve represents a change in demand while a _____ the demand curve represents a change in the quantity demand.

answer

Shift of; movement along

question

Equilibrium price and quantity in a market changes when there is a change in

answer

supply
demand
consumer taste

question

A demand curve shows the plotted

answer

inverse relationship between price and quantity demanded for a product

question

in supply while holding demand constant results in an increase in equilibrium price, but a decrease in equilibrium quantity.

answer

A leftward shift; A decrease

question

Which of the following are determinants of supply

answer

technology
resource prices
taxes and subsides

question

Market _____ is a schedule or curve showing the various amounts of a product that producer are willing and able to make available for sale at each possible price during a specific period.

answer

supply

question

Which of the following are determinants of supply?

answer

expected prices
prices of other goods
taxes & subsides

question

Under what circumstances would government intervene and prevent prices from rising or falling to their equilibrium level

answer

Prices are too low for firms.
Prices are too high for consumers

question

Which of the following describes consumer surplus?

answer

It is the difference between the max price that consumers are willing to pay for a product and the market price for that product.

question

There is no incentive for firms to enter or exit the industry in the long run when

answer

price equals minATC
firms earn a normal profit

question

Consumers benefit from productive efficiency by paying the _____ product price possible under the prevailing technology and cost conditions, causing firms to earn only ____ profit

answer

Lowest: normal

question

Which of the following conditions may or will cause firms to exit an industry

answer

If price is less than minimum average variable cost, resulting losses will cause firms to leave the industry; If price less than minimum average total cost, resulting losses will cause firms to leave the industry.

question

If there are losses in the long run, what adjustments will take place?

answer

Firms will exit the industry until losses are eliminated

question

As firms exit the industry in the long run, market price rises and the losses for the remaining firms fall. The cycle will continue until

answer

There are no economics losses

question

A purely competitive market leads to the efficient use of

answer

society's scarce resources

question

which of the following would describe the personal computer industry as a decreasing cost industry

answer

As demand for computers rose, producers of the components experienced economies of scale

question

Which of the following is downward-sloping?

answer

The long-run supply curve of a decreasing-cost industry

question

in the long run perfectly competitive firms will not survive if they do not use a least-cost production method because

answer

pure competition forces firms to produce at the minimum average total cost (atc) and to change a price that is consistent with that cost

1 of 19

question

What are the characteristics of a competitive market

answer

buying and selling standardized products
a large number of buyers and sellers acting independently.

question

A _____ the demand curve represents a change in demand while a _____ the demand curve represents a change in the quantity demand.

answer

Shift of; movement along

question

Equilibrium price and quantity in a market changes when there is a change in

answer

supply
demand
consumer taste

question

A demand curve shows the plotted

answer

inverse relationship between price and quantity demanded for a product

question

in supply while holding demand constant results in an increase in equilibrium price, but a decrease in equilibrium quantity.

answer

A leftward shift; A decrease

question

Which of the following are determinants of supply

answer

technology
resource prices
taxes and subsides

question

Market _____ is a schedule or curve showing the various amounts of a product that producer are willing and able to make available for sale at each possible price during a specific period.

answer

supply

question

Which of the following are determinants of supply?

answer

expected prices
prices of other goods
taxes & subsides

question

Under what circumstances would government intervene and prevent prices from rising or falling to their equilibrium level

answer

Prices are too low for firms.
Prices are too high for consumers

question

Which of the following describes consumer surplus?

answer

It is the difference between the max price that consumers are willing to pay for a product and the market price for that product.

question

There is no incentive for firms to enter or exit the industry in the long run when

answer

price equals minATC
firms earn a normal profit

question

Consumers benefit from productive efficiency by paying the _____ product price possible under the prevailing technology and cost conditions, causing firms to earn only ____ profit

answer

Lowest: normal

question

Which of the following conditions may or will cause firms to exit an industry

answer

question

If there are losses in the long run, what adjustments will take place?

answer

Firms will exit the industry until losses are eliminated

question

As firms exit the industry in the long run, market price rises and the losses for the remaining firms fall. The cycle will continue until

answer

There are no economics losses

question

A purely competitive market leads to the efficient use of

answer

society's scarce resources

question

which of the following would describe the personal computer industry as a decreasing cost industry

answer

As demand for computers rose, producers of the components experienced economies of scale

question

Which of the following is downward-sloping?

answer

The long-run supply curve of a decreasing-cost industry

question

in the long run perfectly competitive firms will not survive if they do not use a least-cost production method because

answer

pure competition forces firms to produce at the minimum average total cost (atc) and to change a price that is consistent with that cost

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