question
Which of the following are examples of implicit opportunity costs for the firm?
answer
-The owners time
-Interest forgone
-Depreciation
-Interest forgone
-Depreciation
question
Having equal amount of information is known as _____________ 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______________ buyers, _____________ sellers producing ______________ products. ____________ have full information and neither buyers nor sellers have market power.
answer
-Many
-Many
-Identical
-Buyers and Sellers
-Many
-Identical
-Buyers and 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 decreasing, then_____________ cost is ___________.
answer
-Marginal
-Increasing
-Increasing
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
Which of the following are characteristics of perfect competition?
answer
-Many sellers
-There are no barriers to entry or exit
-The market demand curve is downward sloping
-There are no barriers to entry or exit
-The market demand curve is downward sloping
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
price = marginal cost
question
At the profit maximizing level of output, firms shutdown when
answer
price < average variable cost
question
In the long run, perfectly competitive firms earn _________ economic profit and ____________ accounting profit.
answer
-Zero
-Positive
-Positive
question
Perfectly competitive markets are ________ because _______
is maximized and firms produce at the lowest possible ________ cost.
is maximized and firms produce at the lowest possible ________ cost.
answer
-Efficient
-Total surplus
-Average total
-Total surplus
-Average total
question
Which of the following are characteristics of a monopoly?
answer
-The firm determines the price to charge its buyers
-The firms demand curve is downward sloping
-There are high barriers to entry or exit
-The firms demand curve is downward sloping
-There are high barriers to entry or exit
question
Which of the following are barriers to entry for a monopoly?
answer
-Public franchises
-Patents
-Ownership of a vital resource
-Patents
-Ownership of a vital resource
question
Which of the following is true for BOTH a monopoly and a perfectly competitive firm?
answer
The profit maximizing output level occurs where marginal revenue is equal to marginal cost.
question
The profit maximizing single price monopolist produces along the _______ portion of its demand curve.
answer
elastic
question
Joe, a hairdresser, offers students a discount price on haircuts. This form of pricing is an example of _____________
answer
price discrimination.
question
The more perfectly a monopoly can price discriminate, the ______ its output and the ______ its profit.
answer
-Larger
-Larger
-Larger
question
Compared to a similar perfectly competitive industry, a single-price monopoly _________ consumer surplus and _________ economic efficiency.
answer
-decreases
-decreases
-decreases
question
Rent seeking by a monopolist __________ the social __________ of a monopoly and __________ its __________.
answer
-increase
-cost
-increases
-average total cost
-cost
-increases
-average total cost
question
Which of the following are characteristics of a oligopoly?
answer
-The firm produces different goods or services.
-There are high barriers to entry or exit.
-The firm determines the price to charge its buyers.
-There are high barriers to entry or exit.
-The firm determines the price to charge its buyers.
question
Which of the following are barriers to entry for a oligopoly?
answer
-Price wars
-Economies of scale
-Ownership of a vital resource
-Economies of scale
-Ownership of a vital resource
question
Which of the following are features of game theory?
answer
-Payoffs
-Strategies
-Players
-Strategies
-Players
question
A game in which any gains within the group are exactly offset by equal losses by the end of the game is called a zero-sum game.
answer
zero-sum
question
In a repeated game, punishments that result in heavy damages are an incentive for players to adopt the strategies that result in a ___________ equilibrium.
answer
cooperative
question
In the prisoners' dilemma game, when each player takes the best possible action given the action of the other player, a ____equilibrium is reached.
answer
Nash
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