question
Suppose Frank chooses to buy hot dogs at their current price. When the price of hot dogs increases, Frank's consumer surplus----
answer
Decreases
question
If the price of a good falls and, because of the income effect, consumption of the good also decreases, we know that the good is---.
answer
An inferior good
question
Which of the following is an example of the income effect?
answer
When price of tuition increases, Amy eats fewer restaurant meals
question
The law of diminishing marginal returns is the cause of ------marginal product and ---------marginal cost.
answer
Decreasing; increasing
question
Marginal cost is the slope of ----.
answer
The total cost product curve
question
with increasing marginal costs, if marginal cost is equal to average cost at this point must be----.
answer
At its minimum point
question
Which of the following is a cause of diminishing marginal productivity ?
answer
In the short run, labor runs out of available capital as more labor gets added to the production process.
question
Variable cost----while fixed costs----as output ----in the short run.
answer
Rise, stay the same, increases
question
What is true about the long-run for a firm?
answer
All inputs can be changed
question
The marginal product of labor (MPL) can be defined as which of the following?
answer
The change in output level as the result of hiring another worker.
question
In the long-run, the law of diminishing marginal product is the cause of _____-.
answer
None of the above
question
When a firm gets so large that coordination and management of workers and other inputs becomes costly and difficult, it is experiencing which of the following
answer
Diseconomies of scale
question
in a perfectly competitive market, a single firm that sets its price a small amount above the market price will do which of the following
answer
Not sell any units
question
Given given all the characteristics of perfect competition which of the following is the main factor that affects consumers' decisions on which firm to purchase a good from?
answer
Price or Quality ( not sure)
question
Which of the following is not true regarding a firm in perfect competition?
answer
A single firm can influence the demand for its product by advertising.
question
In the short run, how will an increase in fixed costs affect the output of a typical firm in a competitive market?
answer
No change in output
question
Accounting profits at a firm's break-even point are----.
answer
Positive
question
Accountants tell a franchise owner that she earned $30,000 in profits last year. The owner knows that most of her business acquaintances earned at least $70,000 in profits in comparable franchises. Which of the following is true? Her firm earned an economic -----.
answer
Loss of $40,000.
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