M U LTIPLE C H OICE. Choose the one alternative that best completes the statement or answers the question.
|
|
- Garry White
- 6 years ago
- Views:
Transcription
1 Exam N ame M U LTIPLE C H OICE. Choose the one alternative that best completes the statement or answers the question. 1) In the short run, when capital is a fixed factor, a rise in the cost of labour A) leaves the M C curve unchanged. B) shifts the marginal cost curve up wards. C) shifts the total product curve down wards. D) leaves the ATC curve unchanged. E) shifts the AVC curve down. 2) A limited partnership differs from an ordinary partnership by A) having limited liability of all partners. B) including some partners w hose liability is restricted to the amount that they invested in the firm. C) having a limited number of partners, each w ith limited liability. D) having a limited number of partners. E) having unlimited liability for all partners. The table below provides information on output per month and short - run costs for a firm producing outdoor wooden lounge chairs. Q TFC T V C T C T A BLE 7-4 3) Refer to Table 7-4. A t what level of output is this firm at its capacity? A) 15 chairs B) 30 chairs C) 25 chairs D) 10 chairs E) 20 chairs Economics 208A, November 13, page 1
2 The table below shows output, marginal cost, and average variable cost for the production of pairs of shoes. All costs are in dollars. T A BLE 7-5 A verage O utput MarginalCost V ariable Cost ) Refer to Table 7-5. If the firm produces 130 pairs of shoes, and the fixed cost is $550, then the firm s total cost is A) $ B) $7000. C) $8000. D) $ E) $ ) The period of time over which at least one factor of production is fixed is called the A) very -short run. B) short run. C) long run. D) very - long run. E) none of the above. 6) Which of the following items is N O T a characteristic of a corporation? A) It has the right to sue and be sued. B) It is an entity separate from the individuals who own it. C) It is legally obliged to distribute all profits to shareholders. D) It can enter into contracts. E) It can incur debt that is an obligation of the corporation but not of its individual owners. 7) Jodi recently went into business producing widgets. Which of the following would be a fixed cost for her firm? 1. labour costs are $1000 per month 2. raw material costs are $5000 per month 3. a one- year lease on a building is $ A) 1 only B) 2 only C) 3 only D) 1 and 2 only E) 2 and 3 only Economics 208A, November 13, page 2
3 8) If increasing quantities of a variable factor are applied to a given quantity of fixed factors, then the law of diminishing returns tells us that A) the marginal product w ill eventually decrease w ith constant a verage product. B) total product will eventually begin to fall. C) the average product will eventually decrease w ith constant marginal product. D) the average product w ill eventually decrease, but only if total product is held constant. E) the marginal product and the average product of the variable factor w ill eventually decrease. The table below provides the annual revenues and costs for a family- owned firm producing catered meals. Total Revenues ($) Total Costs ($) - wages and salaries risk - free return of 6% on owners' capital of rent depreciation of capital equipment risk premium of 8% on owners' capital of intermediate inputs forgone wages of owners in alternative employment interest on bank loan T A BLE 7-1 9) Refer to Table 7-1. The accounting profits for this family - owned firm are A) $0 B) $ C) -$ D) $ E) $ ) Consider a firm in the short run. If total product is at its maximum, then A) average product must be rising and must lie above marginal product. B) average product must be falling and be equal to zero. C) marginal product must be greater than zero and must be falling. D) average product must equal marginal product. E) marginal product must be falling and be equal to zero. 11) The point of diminishing marginal productivity is the point where A) marginal product has reached its maximum. B) average product has reached its maximum. C) the marginal product curve lies below the average product curve. D) the total product begins to fall. E) the marginal product begins to fall at an increasing rate. A nswer: A Economics 208A, November 13, page 3
4 12) Suppose a firm is producing 100 units of output, incurring a total cost of $ and total variable cost of $6000. It can be concluded that average fixed cost is A) $40. B) $60. C) $100. D) $160. E) $4000. A nswer: A The table below shows output, marginal cost, and average variable cost for the production of pairs of shoes. All costs are in dollars. T A BLE 7-5 A verage O utput MarginalCost V ariable Cost ) Refer to Table 7-5. The firm s marginal product of its variable factor is maximized when it produces units of output. A) 100 B) 110 C) 90 D) 170 E) 50 14) The opportunity cost to a firm of using an asset is zero if A) the asset was given to the firm for free. B) no money was spent to acquire the asset. C) the asset is already owned by the firm. D) the asset has no alternative uses. E) the asset has zero sunk costs associated with it. A nswer: D 15) Consider a firm in the short run. When the total- product curve is increasing at an increasing rate A) marginal product is positive but declining. B) average product is zero. C) the marginal- product curve lies below the average- product curve. D) average product is falling. E) marginal product is positive and increasing. Economics 208A, November 13, page 4
5 The diagram below shows the short- run cost curves for 3 perfectly competitive firms in the same industry. FI G U RE ) Refer to Figure 9-6. If Firms A, B and C are in the same industry, is this industry in long- run equilibrium? A) No, because if the industry were in equilibrium, all 3 firms would be earning zero economic profits. B) No, because Firm A is not producing at a profit- maximizing level of output. C) Yes, because all 3 firms are producing at their minimum average total cost. D) Yes, because each of the 3 firms is operating at its minimum efficient scale. E) Yes, because P = M C = MR for each of the 3 firms. A nswer: A 17) T he demand curve facing a perfectly competitive firm depends on A) market demand and the market supply curve. B) market demand alone. C) the marginal cost of the firm. D) market demand and the firm's supply curve. E) market supply alone. A nswer: A Economics 208A, November 13, page 5
6 Consider the following total cost schedule for a perfectly competitive firm producing ball- point pens. O utput per period T V C ($) TFC ($) T A BLE ) Refer to Table 9-2. If this firm were producing at an output level of 30 units, the A FC would be and the A V C would be. A) $6; $5 B) $0.17; $0.20 C) $0.10; $0.30 D) $5; $6 E) $0.20; $ ) Which of the following conditions are N O T true of a perfectly competitive firm when the industry is in long- run equilibrium? A) Price equals marginal revenue. B) Price equals minimum short- run and long- run average total cost. C) Economic profits are greater than zero. D) Price equals marginal cost. E) Economic profits are zero. 20) When economists say that a perfectly competiti ve firm is a "quantity adjuster", they mean that A) it is not concerned w ith cost factors. B) changing the output level does not affect the costs of production. C) its marginal-cost curve coincides with its own demand curve. D) it can vary its output by an infinite amount. E) it is a price taker. Economics 208A, November 13, page 6
7 Consider the following cost curves for Firm X, a perfectly competitive firm. FI G U RE ) Refer to Figure 9-3. A t output Q1 and price P1, A) there is no lower-cost scale of plant which could be built by Firm X. B) Firm X is producing at its minimum efficient scale. C) new firms have a profit incentive to enter the industry, building larger plants. D) Firm X is at its long- run profit- maximizing position. E) there are profits to induce increases in output by Firm X, using its existing plant. 22) A perfectly competiti ve firm maximizes its profits by A) pricing slightly under its competitors. B) maximizing total revenue. C) choosing the optimal level of output. D) choosing the optimal price. E) maximizing total sales. 23) A verage revenue (AR) for an individual firm equals A)!(p q)/!q. B)!p!q. C)!q/!p. D) (p q)/q. E) p q. A nswer: D Economics 208A, November 13, page 7
8 24) If firms in a competitive industry are suffering economic losses, then one would expect that in the long run A) the demand curve for the product will shift to the left, causing equilibrium output and price to decline. B) the supply curve for the product will shift to the right as individual firms lower their prices to increase their sales. C) there would be no change in the number of firms in the industry as long as firms are covering their average variable costs. D) each firm would raise its price until it was breaking even. E) the supply curve for the product will shift to the left as firms leave the industry, causing industry output to fall and price to rise. Consider the following total cost schedule for a perfectly competitive firm producing ball- point pens. O utput per period T V C ($) TFC ($) T A BLE ) Refer to Table 9-2. As this firm increases output from 40 units to 50 units per period, its marginal cost rises to A) $0.10 B) $0.17 C) $0.375 D) $0.40 E) $ ) N atural barriers to entry include A) increasing- cost production. B) control or ownership of the entire supply of an essential raw material. C) large economies of scale in the industry. D) an government- awarded franchise. E) a patent which allows production by only the patent holder. 27) If a monopolist is practicing perfect price discrimination, then the following equation is true: A) MR = P for all units. B) MR = 1/2 P for any unit. C) AR = ATC at the profit- maximizing level of output. D) M C = 1/2 MR at the profit- maximizing level of output. E) both A and C are correct. A nswer: A Economics 208A, November 13, page 8
9 Consider the following AR and M R curves for a single- price monopolist. FI G URE ) Refer to Figure If marginal costs were positive and constant but less than A, the profit- maximizing output for a single- price monopolist would be A) Q2. B) greater than zero, but less than Q2. C) greater than zero, but less than Q1. D) 0. E) none of the above. Economics 208A, November 13, page 9
10 The diagram below shows a pharmaceutical firm's demand curve and marginal cost curve for a new heart medication for which the firm holds a 20- year patent on its production. FI G URE ) Refer to Figure A ssume this pharmaceutical firm is practicing perfect price discrimination among its buyers. A t its profit- maximizing level of output, it will generate a deadweight loss to society represented by A) areas I+J+K. B) areas H+I+J+K. C) it is not possible to determine with the information provided. D) there is no dead weight loss generated. E) areas H+I. A nswer: D 30) Refer to Figure Assume this pharmaceutical firm charges a single price for its drug. A t its profit- maximizing level of output it w ill produce A) Q1 units and charge a price greater than its average total variable cost. B) Q0 units and charge a price of p0. C) Q0 units and charge a price of p2. D) Q0 units and charge the perfectly competitive price. E) Q1 units and charge a price of p1. Economics 208A, November 13, page 10
11 Your food- services company has been awarded an exclusive right to provide meals at a small university. The cost and demand schedules are: T A BLE 10-2 Sold Price Total Total per per Fixed V ariable Total Day M eal Cost Cost Revenue 0 $3.50 $ $3.25 $150 $300 $ $3.00 $150 $500 $ $2.75 $150 $650 $ $2.50 $150 $750 $ $2.25 $150 $830 $ $2.00 $150 $905 $ $1.75 $150 $995 $ ) Refer to Table 10-2, and suppose that the firm is a single- price monopolist. A t the profit - maximizing level of output, the firm's total profit per day will be A) $75. B) $100. C) $145. D) $150. E) $ ) Real capital includes A) corporate bonds. B) corporate stock. C) a firm's balance in its bank account. D) a firm's physical assets. E) ow ner's equity. A nswer: D 33) Which of the following is an example of an input that is an intermediate product? A) capital B) a product produced by another firm C) land D) money E) labour 34) The opportunity cost of any factor of production is A) its explicit cost. B) the benefit forgone by not using it in its best alternative. C) the money actually paid to the factors of production. D) the benefit forgone by not using it in its worst alternative. E) its accounting cost. Economics 208A, November 13, page 11
12 The diagram below shows some short- run const curves for a firm. FI G U RE 7-2 Economics 208A, November 13, page 12
13 35) Refer to Figure 7-2. W hich of the following choices correctly identifies the cost curves in part (ii) of the figure? A) Curve 4 is the marginal cost curve. Curve 5 is the average fixed cost curve. C urve 6 is the average variable cost curve. Curve 7 is the average total cost curve. B) Curve 4 is the average total cost curve. Curve 5 is the marginal cost curve. C urve 6 is the average variable cost curve. Curve 7 is the average fixed cost curve. C) Curve 4 is the average fixed cost curve. Curve 5 is the average total cost curve. Curve 6 is the marginal cost curve. C urve 7 is the average variable cost curve. D) Curve 4 is the marginal cost curve. C urve 5 is the average variable cost curve. Curve 6 is the average fixed cost curve. Curve 7 is the average total cost curve. E) Curve 4 is the marginal cost curve. Curve 5 is the average total cost curve. C urve 6 is the average variable cost curve. Curve 7 is the average fixed cost curve. Economics 208A, November 13, page 13
14 FI G U RE ) Refer to Figure 9-1. The diagram shows cost curves for a perfectly competitive firm. If the market price is P2, the profit- maximizing firm in the short run should A) produce output B. B) produce output C. C) produce output D. D) produce output E. E) shut dow n, as it is incurring losses. A nswer: D Economics 208A, November 13, page 14
15 Consider the following cost curves for a perfectly competitive firm. FI G U RE ) Refer to Figure 9-2. The short- run supply curve for this perfectly competitive firm is its A) SRAVC curve at and above $1.50. B) entire marginal cost curve. C) marginal cost curve at and above $3. D) marginal cost curve at and above $1.50. E) SRATC curve at and above $3. A nswer: D 38) Total revenue (TR) for an individual firm equals A)!q/!p. B)!(p q)/!q. C) (p q)/q. D)!p!q. E) p q. 39) A single- price monopolist is currently producing an output level where P = $20, MR = $13, ATC = $15, and M C = $14. In order to maximize profits, this monopolist should A) increase production and reduce price. B) not change his output level, because he is currently at the profit - maximizing output level. C) decrease prod uction and increase price. D) shut down. E) there is insufficient information to make a recommendation. Economics 208A, November 13, page 15
16 The diagram below shows total revenue for a single- price monopolist. FI G URE ) Refer to Figure The profit - maximizing output for the single- price monopolist is A) 0. B) Q1. C) Q2. D) Q3. E) not determinable from the diagram. 41) The equation Q = 0.5KL - (0.4)L + 2L2 is an example of A) an economic input function. B) a production function. C) a factor of production equation. D) an arithmetic expression of output quantities. E) a technological change equation. 42) If a perfectly competitive firm is producing a level of output for which price equals average total cost, and average total cost is less than marginal cost, the firm should A) not change its output. B) reduce its output. C) expand its output. D) shut down. E) increase the market price. Economics 208A, November 13, page 16
17 The table below shows the demand schedule for a product produced by a monopolist. Price $8 $7 $6 $5 $4 $3 $2 Q uantity T A BLE ) Refer to Table For a single- price monopolist producing and selling 9 units, the marginal revenue earned by selling the 9th unit is A) -2. B) 0. C) -4. D) 4. E) 2. 44) Short- run cost curves are eventually upward - sloping because of the effects of A) increasing marginal productivity of the variable inputs. B) the increasing price of variable inputs. C) decreasing total product. D) diminishing marginal product. E) increasing fixed costs. A nswer: D Assume the following total cost schedule for a perfectly competitive firm. T A BLE 9-1 O utput T V C TFC ) Refer to Table 9-1. The competitive firm's break - even price is A) $40. B) $70. C) $145. D) $220. E) $ ) Each point on a supply curve shows the acceptable price to firms for selling that unit; this price reflects to firms from producing that unit. A) maximum; the additional value B) minimum; the additional value C) minimum; the equilibrium price D) maximum; the additional cost E) minimum; the additional cost Economics 208A, November 13, page 17
18 47) If snow tires are produced and purchased in the month of November, we can say that economic surplus is A) the net value to those consumers who purchased the snow tires. B) the number of snow tires that are produced in excess of the equilibrium quantity. C) the net value that society as a w hole receives by producing and consuming those snow tires. D) the price at which the tires are sold multiplied by E) the profit earned by the producers of those snow tires. FI G U RE ) Refer to Figure 5-5. Suppose this market for gardening services is in a free- market equilibrium. If the government then imposes a price floor of $50 per hour for gardening services, the result would be A) a loss of economic surplus of the areas 1, 2, 3, and 4. B) a loss of economic surplus of the areas 2 and 6. C) a loss of economic surplus of the areas 6 and 7. D) a loss of economic surplus of the area 1. E) a loss of economic surplus of the areas 2, 3, 4, 6, and 7. 49) Dead weight loss represents A) the total market value of the goods no longer produced when quantity exchanged is below the equilibrium quantity. B) the loss of consumption that occurs when a binding price floor or ceiling is imposed. C) the loss of production that occurs when a binding price floor or ceiling is imposed. D) the overall loss of economic surplus to society that occurs when markets are inefficient. E) the loss of economic surplus to consumers. A nswer: D Economics 208A, November 13, page 18
19 FI G U RE ) Refer to Figure 5-7. The market for good X is in equilibrium at P0 and Q0. Now suppose the government imposes a at P2. One result would be. A) price floor; a dead weight loss represented by area 8. B) price floor; a dead weight loss represented by areas 5 and 6. C) price floor; an increase in economic surplus represented by area 1. D) price ceiling; a dead weight loss represented by areas 5 and 6. E) price ceiling; an increase in economic surplus represented by areas 2 and 5. 51) A n economy will be allocatively efficient if A) the economy's resources are fully employed. B) all firms are breaking even. C) price equals marginal cost for all products. D) the price equals average cost for all goods. E) the average cost of production is the lowest possible for all goods produced. 52) We can safely say that each point on a country's production possibilities boundary (PPB) is A) productively efficient. B) not productively efficient. C) allocatively efficient. D) one at which P = M C for all goods. E) Pareto optimal. A nswer: A Economics 208A, November 13, page 19
20 Consider three firms, A, B and C, all producing kilos of potatoes (per year) in a perfectly competitive market. The diagrams below show marginal cost curves for each of the three firms. FI G URE ) Refer to Figure Suppose each of Firms A, B, and C are producing 500 kilos of potatoes. Is this industry productively efficient? A) No, because marginal costs are not equated for all firms. B) Yes, because output is equated for all firms. C) No, because the marginal cost curve for each firm has a different slope. D) No, because each firm could easily produce more than 500 kilos. E) It is not possible to say whether this industry is productively efficient because we do not know the market price of the product. A nswer: A Economics 208A, November 13, page 20
21 The production possibilities boundary shows possible combinations of guns and butter that can be produced by a country. The lower diagram shows demand and supply for butter. FI G URE ) Refer to Figure Suppose demand and supply for butter are shown by D and S, respectively. A nd suppose the economy is at point (a) on the production possibilities boundary. Is this output of guns and butter allocatively efficient? A) No, because the marginal cost to producers of the butter produced is more than the marginal value to consumers. B) Yes, because the marginal cost of producing the butter equals the marginal value of consuming the butter. C) Yes, because all points on the production possibilities boundary are allocatively efficient. D) N o, because the marginal costs for guns and butter are not equated. E) No, because the marginal value to consumers of the butter produced is greater than the marginal cost to producers. Economics 208A, November 13, page 21
22 55) W hen comparing a perfectly competitive firm and a monopolist, a major difference is that A) the perfect competitor produces where P = M C, but the monopolist does not. B) the perfect competitor achieves productive efficiency, but the monopolist does not. C) the monopolist produces where MR = M C, but the perfect competitor does not. D) the monopolist achieves allocative efficiency but the perfect competitor does not. E) none of the above A nswer: A The diagram below shows supply, demand, and quantity exchanged of Monday matinee movie tickets. Assume it is a perfectly competitive market. FI G URE ) Refer to Figure W hat is the total economic surplus generated in this market at the allocatively efficient level of output? A) $250 B) $5 C) $125 D) $500 E) $10 A nswer: A Economics 208A, November 13, page 22
23 The diagram below shows the demand and supply curves in a perfectly competitive market. FI G URE ) Refer to Figure In the free- market equilibrium, producer surplus is shown by the area A) P3P2E. B) P1P3E. C) D) E) P1P2E. 58) T he "informal defense" of free markets includes the argument that competitive markets A) lead to allocative efficiency. B) provide automatic coordination of the actions of decentralized decision makers. C) provide a stimulus to innovation and economic growth because of the pursuit of profits. D) permit a decentralization of economic power. E) B, C and D, but not A. 59) It may be said that the price system A) depends on planned coordination between firms and governments. B) is automatic and functions perfectly in reallocating economic resources. C) is the only feasible method of allocating resources. D) is automatic, although it does not function perfectly. E) operates only in a laissez- faire economy. A nswer: D Economics 208A, November 13, page 23
24 60) T he " informal defense" of free markets includes the argument that markets A) provide automatic coordination of the actions of decentralized decision makers. B) permit a centralization of economic power. C) lead to prod uctive efficiency. D) achieve the maximum feasible rate of economic growth. E) lead to allocative efficiency. A nswer: A Economics 208A, November 13, page 24
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. FIGURE 1-2
Questions of this SAMPLE exam were randomly chosen and may NOT be representative of the difficulty or focus of the actual examination. The professor did NOT review these questions. MULTIPLE CHOICE. Choose
More informationI enjoy teaching this class. Good luck and have a nice Holiday!!
ECON 202-501 Fall 2008 Xiaoyong Cao Final Exam Form A Instructions: The exam consists of 2 parts. Part I has 35 multiple choice problems. You need to fill the answers in the table given in Part II of the
More informationECON 260 (2,3) Practice Exam #4 Spring 2007 Dan Mallela
ECON 260 (2,3) Practice Exam #4 Spring 2007 Dan Mallela Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. 1. Profit is defined as a. net revenue
More informationMonopoly CHAPTER. Goals. Outcomes
CHAPTER 15 Monopoly Goals in this chapter you will Learn why some markets have only one seller Analyze how a monopoly determines the quantity to produce and the price to charge See how the monopoly s decisions
More information23 Perfect Competition
23 Perfect Competition Learning Objectives After you have studied this chapter, you should be able to 1. define price taker, total revenues, marginal revenue, short-run shutdown price, short-run breakeven
More informationECO201: PRINCIPLES OF MICROECONOMICS FIRST MIDTERM EXAMINATION
YOUR NAME Row Number ECO201: PRINCIPLES OF MICROECONOMICS FIRST MIDTERM EXAMINATION Prof. Bill Even Novermber 12, 2014 FORM 1 Directions 1. Fill in your scantron with your unique-id and the form number
More informationECO201: PRINCIPLES OF MICROECONOMICS FIRST MIDTERM EXAMINATION
YOUR NAME Row Number ECO201: PRINCIPLES OF MICROECONOMICS FIRST MIDTERM EXAMINATION Prof. Bill Even Novermber 12, 2014 FORM 3 Directions 1. Fill in your scantron with your unique-id and the form number
More informationa. Sells a product differentiated from that of its competitors d. produces at the minimum of average total cost in the long run
I. From Seminar Slides: 3, 4, 5, 6. 3. For each of the following characteristics, say whether it describes a perfectly competitive firm (PC), a monopolistically competitive firm (MC), both, or neither.
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Micro - HW 4 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) In central Florida during the spring, strawberry growers are price takers. The reason
More informationJANUARY EXAMINATIONS 2008
No. of Pages: (A) 9 No. of Questions: 38 EC1000A micro 2008 JANUARY EXAMINATIONS 2008 Subject Title of Paper ECONOMICS EC1000 MICROECONOMICS Time Allowed Two Hours (2 Hours) Instructions to candidates
More informationMonopoly and How It Arises
Monopoly and How It Arises A monopoly is a market: That produces a good or service for which no close substitute exists In which there is one supplier that is protected from competition by a barrier preventing
More informationChapter Summary and Learning Objectives
CHAPTER 11 Firms in Perfectly Competitive Markets Chapter Summary and Learning Objectives 11.1 Perfectly Competitive Markets (pages 369 371) Explain what a perfectly competitive market is and why a perfect
More informationPractice Test for Midterm 2 Econ Fall 2009 Instructor: Soojae Moon
Practice Test for Midterm 2 Econ 2010-200 Fall 2009 Instructor: Soojae Moon Please read carefully and choose the choice that best completes the statement or answers the question. Table 7-2 This table refers
More informationCOST OF PRODUCTION & THEORY OF THE FIRM
MICROECONOMICS: UNIT III COST OF PRODUCTION & THEORY OF THE FIRM One of the concepts mentioned in both Units I and II was and its components, total cost and total revenue. In this unit, costs and revenue
More informationMonopoly. 3 Microeconomics LESSON 5. Introduction and Description. Time Required. Materials
LESSON 5 Monopoly Introduction and Description Lesson 5 extends the theory of the firm to the model of a Students will see that the profit-maximization rules for the monopoly are the same as they were
More informationPrinciples of Microeconomics Module 5.1. Understanding Profit
Principles of Microeconomics Module 5.1 Understanding Profit 180 Production Choices of Firms All firms have one goal in mind: MAX PROFITS PROFITS = TOTAL REVENUE TOTAL COST Two ways to reach this goal:
More informationBremen School District 228 Social Studies Common Assessment 2: Midterm
Bremen School District 228 Social Studies Common Assessment 2: Midterm AP Microeconomics 55 Minutes 60 Questions Directions: Each of the questions or incomplete statements in this exam is followed by five
More informationTeaching about Market Structures
Teaching about Market Structures Felix B. Kwan, Ph.D. Professor of Econ/Finance, Maryville University AP Econ Conference - FRB St. Louis June 17-19, 2015 Profits Foundational Concepts Some basic terms/concepts
More informationVERSION 1. Economics 101 Lec 3 Elizabeth Kelly Fall 2000 Midterm #3 / Version #1 December 4, Student Name: ID Number: Section Number: TA Name:
Economics 101 Lec 3 Elizabeth Kelly Fall 2000 Midterm #3 / Version #1 December 4, 2000 VERSION 1 TF+MC roblem Total Student Name: ID Number: Section Number: TA Name: NOTE: This information and the similar
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Sample Test 3 Ch 10-13 Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A cost incurred in the production of a good or service and for which
More informationMonopoly. While a competitive firm is a price taker, a monopoly firm is a price maker.
Monopoly Monopoly While a competitive firm is a price taker, a monopoly firm is a price maker. Monopoly A firm is considered a monopoly if... it is the sole seller of its product. its product does not
More information2010 Pearson Education Canada
What Is Perfect Competition? Perfect competition is an industry in which Many firms sell identical products to many buyers. There are no restrictions to entry into the industry. Established firms have
More informationMonopoly. Cost. Average total cost. Quantity of Output
While a competitive firm is a price taker, a monopoly firm is a price maker. A firm is considered a monopoly if... it is the sole seller of its product. its product does not have close substitutes. The
More informationMonopoly. PowerPoint Slides prepared by: Andreea CHIRITESCU Eastern Illinois University
15 Monopoly PowerPoint Slides prepared by: Andreea CHIRITESCU Eastern Illinois University 1 Market power Why Monopolies Arise Alters the relationship between a firm s costs and the selling price Monopoly
More informationPrinciples of Economics Final Exam. Name: Student ID:
Principles of Economics Final Exam Name: Student ID: 1. In the absence of externalities, the "invisible hand" leads a competitive market to maximize (a) producer profit from that market. (b) total benefit
More informationS11Microeconomics, Exam 3 Answer Key. Instruction:
S11Microeconomics, Exam 3 Answer Key Instruction: Exam 3 Student Name: Microeconomics, several versions Early May, 2011 Instructions: I) On your Scantron card you must print three things: 1) Full name
More informationMonopolistic Competition. Chapter 17
Monopolistic Competition Chapter 17 The Four Types of Market Structure Number of Firms? Many firms One firm Few firms Differentiated products Type of Products? Identical products Monopoly Oligopoly Monopolistic
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Exam Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following statements is correct? A) Consumers have the ability to buy everything
More informationMICROECONOMICS CHAPTER 10A/23 PERFECT COMPETITION. Professor Charles Fusi
MICROECONOMICS CHAPTER 10A/23 PERFECT COMPETITION Professor Charles Fusi Learning Objectives Identify the characteristics of a perfectly competitive market structure Discuss the process by which a perfectly
More informationECON 102 Kagundu Final Exam (New Material) Practice Exam Solutions
www.liontutors.com ECON 102 Kagundu Final Exam (New Material) Practice Exam Solutions 1. A A large number of firms will be able to operate in the industry because you only need to produce a small amount
More informationPractice Exam 3 Questions
1. What is the main goal of a firm? A) To be as big as possible. B) To hire as many people as possible. C) To make as much profit as possible. D) All of the above answers are correct. Practice Exam 3 Questions
More informationMICRO EXAM REVIEW SHEET
MICRO EXAM REVIEW SHEET 1. Firm in Perfect Competition (Long-Run Equilibrium) 2. Monopoly Industry with comparison of price & output of a Perfectly Competitive Industry 3. Natural Monopoly with Fair-Return
More informationECONOMICS ASSIGNMENT CLASS XII MICRO ECONOMICS UNIT I INTRODUCTION. 4. Is free medicine given to patients in Govt. Hospital a scarce commodity?
ECONOMICS ASSIGNMENT CLASS XII MICRO ECONOMICS UNIT I INTRODUCTION 1. What is the Slope of PPC? What does it show? 2. When can PPC be a straight line? 3. Do all attainable combination of two goods that
More informationSlides and Images, Worth Publishers Inc. 8-1
Perfect Competition Michael J. Murray Slides and Images, Worth Publishers Inc. 8-1 Market Structure Analysis By observing a few industry characteristics, we can predict pricing and output behavior of the
More informationECON 251 Practice Exam 2 Questions from Fall 2013 Exams
ECON 251 Practice Exam 2 Questions from Exams Gordon spends all his income on spatulas and mixing bowls. Spatulas cost $4 and mixing bowls cost $12. Gordon has $60 of income and considers both spatulas
More informationEcon 001: Midterm 2 (Dr. Stein) Answer Key March 23, 2011
Instructions: Econ 001: Midterm 2 (Dr. Stein) Answer Key March 23, 2011 This is a 60-minute examination. Write all answers in the blue books provided. Show all work. Use diagrams where appropriate and
More informationExam 3 Practice Questions
Exam 3 Practice Questions 1. The price elasticity of demand is a measure of: a) how quickly a particular market reaches equilibrium. b) the change in supply associated with lower prices. c) the percent
More informationMICROECONOMICS SECTION I. Time - 70 minutes 60 Questions
MICROECONOMICS SECTION I Time - 70 minutes 60 Questions Directions: Each of the questions or incomplete statements below is followed by five suggested answers or completions. Select the one that is best
More informationShort-Run Costs and Output Decisions
Semester-I Course: 01 (Introductory Microeconomics) Unit IV - The Firm and Perfect Market Structure Lesson: Short-Run Costs and Output Decisions Lesson Developer: Jasmin Jawaharlal Nehru University Institute
More informationAP Microeconomics Review With Answers
AP Microeconomics Review With Answers 1. Firm in Perfect Competition (Long-Run Equilibrium) 2. Monopoly Industry with comparison of price & output of a Perfectly Competitive Industry (which means show
More informationWhich store has the lower costs: Wal-Mart or 7-Eleven? 2013 Pearson
Which store has the lower costs: Wal-Mart or 7-Eleven? Production and Cost 14 When you have completed your study of this chapter, you will be able to 1 Explain and distinguish between the economic and
More informationiv. The monopolist will receive economic profits as long as price is greater than the average total cost
Chapter 15: Monopoly (Lecture Outline) -------------------------------------------------------------------------------------------------------------------------- Monopolies have no close competitors and,
More informationAP Microeconomics Review Session #3 Key Terms & Concepts
The Firm, Profit, and the Costs of Production 1. Explicit vs. implicit costs 2. Short-run vs. long-run decisions 3. Fixed inputs vs. variable inputs 4. Short-run production measures: be able to calculate/graph
More informationChapter 13 Perfect Competition
Chapter 13 Perfect Competition 13.1 A Firm's Profit-Maximizing Choices 1) Is the number of sellers in the market the only thing that is different in each of the four market types economists study? Answer:
More informationPledge (sign) I did not copy another student s answers
Economics 4020 Dr. Rupp Test #1 Fri. Sept 23 rd, 2011 20 Multiple Choice questions (2.5 points each) Pledge (sign) I did not copy another student s answers 1. The profit maximization rule for a firm is
More informationECON 251 Exam 2 Pink. Fall 2012
ECON 251 Exam 2 Pink Use the table below to answer the following four questions The table below shows Harry s total utility from consuming beer and wine. The price of beer is $2 per bottle. The price of
More information1.3. Levels and Rates of Change Levels: example, wages and income versus Rates: example, inflation and growth Example: Box 1.3
1 Chapter 1 1.1. Scarcity, Choice, Opportunity Cost Definition of Economics: Resources versus Wants Wants: more and better unlimited Versus Needs: essential limited Versus Demand: ability to pay + want
More information2) All combinations of capital and labor along a given isoquant cost the same amount.
Micro Problem Set III WCC Fall 2014 A=True / B=False 15 Points 1) If MC is greater than AVC, AVC must be rising. 2) All combinations of capital and labor along a given isoquant cost the same amount. 3)
More informationCommerce 295 Midterm Answers
Commerce 295 Midterm Answers October 27, 2010 PART I MULTIPLE CHOICE QUESTIONS Each question has one correct response. Please circle the letter in front of the correct response for each question. There
More informationInstructions: must Repeat this answer on lines 37, 38 and 39. Questions:
Final Exam Student Name: Microeconomics, several versions Early May, 2011 Instructions: I) On your Scantron card you must print three things: 1) Full name clearly; 2) Day and time of your section (for
More informationNotes on Chapter 10 OUTPUT AND COSTS
Notes on Chapter 10 OUTPUT AND COSTS PRODUCTION TIMEFRAME There are many decisions made by the firm. Some decisions are major decisions that are hard to reverse without a big loss while other decisions
More informationJacob: W hat if Framer Jacob has 10% percent of the U.S. wheat production? Is he still a competitive producer?
Microeconomics, Module 7: Competition in the Short Run (Chapter 7) Additional Illustrative Test Questions (The attached PDF file has better formatting.) Updated: June 9, 2005 Question 7.1: Pricing in a
More informationMonopolistic Competition
CHAPTER 16 Monopolistic Competition Goals in this chapter you will Examine market structures that lie between monopoly and competition Analyze competition among firms that sell differentiated products
More information3.2. economics. perfect competition and monopolies. barriers to entry. identical product. many buyers & sellers. perfect knowledge
economics 3.2 perfect competition and monopolies perfect knowledge identical product barriers to entry many buyers & sellers 1 14 PERFECT COMPETITION AND MONOPOLIES (3.2) Rank the competitiveness of the
More informationUNIT 4 PRACTICE EXAM
UNIT 4 PRACTICE EXAM 1. The prices paid for resources affect A. the money incomes of households in the economy B. the allocation of resources among different firms and industries in the economy C. the
More informationAP Microeconomics Chapter 10 Outline
I. Learning Objectives In this chapter students should learn: A. How the long run differs from the short run in pure competition. B. Why profits encourage entry into a purely competitive industry and losses
More informationTotal revenue Quantity. Price Quantity Quantity
s in Competitive Markets WHAT IS A COMPETITIVE MARKET? A perfectly competitive market has the following characteristics: There are many buyers and sellers in the market. The goods offered by the various
More informationEcn Intermediate Microeconomic Theory University of California - Davis December 10, 2009 Instructor: John Parman. Final Exam
Ecn 100 - Intermediate Microeconomic Theory University of California - Davis December 10, 2009 Instructor: John Parman Final Exam You have until 12:30pm to complete this exam. Be certain to put your name,
More informationUnit 4: Imperfect Competition
Unit 4: Imperfect Competition 1 Monopoly 2 Characteristics of Monopolies 3 5 Characteristics of a Monopoly 1. Single Seller One Firm controls the vast majority of a market The Firm IS the Industry 2. Unique
More informationGraded exercise questions. Level (I, ii, iii)
Graded exercise questions Level (I, ii, iii) 248 MICRO ECONOMICS LEVEL 1 GRADED EXERCISE QUESTIONS (LEVEL I, II, III) INTRODUCTION 1. Why does an economic problem arise? 2. What is economics about? 3.
More informationSIMON FRASER UNIVERSITY Department of Economics Sample Final Examination. PART I. Multiple Choice. Choose the best answer. (60% - 1 point each!
Econ 103 SIMON FRASER UNIVERSITY Department of Economics Sample Final Examination PART I. Multiple Choice. Choose the best answer. (60% - 1 point each!) PART 1: MULTIPLE CHOICE (answers are at the end
More informationTotal Costs. TC = TFC + TVC TFC = Fixed Costs. TVC = Variable Costs. Constant costs paid regardless of production
AP Microeconomics Total Costs TC = TFC + TVC TFC = Fixed Costs Constant costs paid regardless of production TVC = Variable Costs Costs that vary as production is changed Cost TFC TVC TFC Output Profit
More informationProduction and Cost Analysis I
CHAPTER 12 Production and Cost Analysis I Production is not the application of tools to materials, but logic to work. Peter Drucker McGraw-Hill/Irwin Copyright 2010 by the McGraw-Hill Companies, Inc. All
More informationEssential Graphs for Microeconomics
Essential Graphs for Microeconomics Basic Economic Concepts! roduction ossibilities Curve Good X A F B C W Concepts: oints on the curve-efficient oints inside the curve-inefficient oints outside the curve-unattainable
More informationEconomics. Monopoly. N. Gregory Mankiw. Premium PowerPoint Slides by Vance Ginn & Ron Cronovich C H A P T E R P R I N C I P L E S O F
C H A P T E R Monopoly Economics P R I N C I P L E S O F N. Gregory Mankiw Premium PowerPoint Slides by Vance Ginn & Ron Cronovich 2009 South-Western, a part of Cengage Learning, all rights reserved In
More informationPerfect competition: occurs when none of the individual market participants (ie buyers or sellers) can influence the price of the product.
Perfect Competition In this section of work and the next one we derive the equilibrium positions of firms in order to determine whether or not it is profitable for a firm to produce and, if so, what quantities
More informationEco201 Review questions for chapters Prof. Bill Even ====QUESTIONS FOR CHAPTER 13=============================
Eco201 Review questions for chapters 13-15 Prof. Bill Even ====QUESTIONS FOR CHAPTER 13============================= 1) A monopoly has two key features, which are. A) barriers to entry and close substitutes
More informationSupply in a Competitive Market
Supply in a Competitive Market 8 Introduction 8 Chapter Outline 8.1 Market Structures and Perfect Competition in the Short Run 8.2 Profit Maximization in a Perfectly Competitive Market 8.3 Perfect Competition
More informationThursday, October 13: Short and Long Run Equilibria
Amherst College epartment of Economics Economics 54 Fall 2005 Thursday, October 13: Short and Long Run Equilibria Equilibrium in the Short Run The equilibrium price and quantity are determined by the market
More informationEconomics : Principles of Microeconomics Spring 2014 Instructor: Robert Munk April 24, Final Exam
Economics 001.01: Principles of Microeconomics Spring 01 Instructor: Robert Munk April, 01 Final Exam Exam Guidelines: The exam consists of 5 multiple choice questions. The exam is closed book and closed
More informationThe "competition" in monopolistically competitive markets is most likely a result of having many sellers in the market.
Chapter 16 Monopolistic Competition TRUE/FALSE 1. The "competition" in monopolistically competitive markets is most likely a result of having many sellers in the market. ANS: T 2. The "monopoly" in monopolistically
More informationChapter 13. What will you learn in this chapter? A competitive market. Perfect Competition
Chapter 13 Perfect Competition 214 by McGraw-Hill Education 1 What will you learn in this chapter? What the characteristics of a perfectly competitive market are. How to calculate average, marginal, and
More informationFigure: Profit Maximizing
Name: Student ID: 1. A manufacturing company that benefits from lower costs per unit as it grows is an example of a firm experiencing: A) scale reduction. B) increasing returns to scale. C) increasing
More informationUniversity of Toronto February 6, ECO 100Y INTRODUCTION TO ECONOMICS Midterm Test # 3
Department of Economics Prof. Gustavo Indart University of Toronto February 6, 2009 SOLUTIONS ECO 100Y INTRODUCTION TO ECONOMICS Midterm Test # 3 LAST NAME FIRST NAME STUDENT NUMBER INSTRUCTIONS: 1. The
More informationECON 311 MICROECONOMICS THEORY I
ECON 311 MICROECONOMICS THEORY I Profit Maximisation & Perfect Competition (Short-Run) Dr. F. Kwame Agyire-Tettey Department of Economics Contact Information: fagyire-tettey@ug.edu.gh Session Overview
More informationChapter 28 The Labor Market: Demand, Supply, and Outsourcing
Chapter 28 The Labor Market: Demand, Supply, and Outsourcing Learning Objectives After you have studied this chapter, you should be able to 1. define marginal factor cost, marginal physical product of
More informationAGENDA Mon 10/12. Economics in Action Review QOD #21: Competitive Farming HW Review Pure Competition MR = MC HW: Read pp Q #7
AGENDA Mon 10/12 Economics in Action Review QOD #21: Competitive Farming HW Review Pure Competition MR = MC HW: Read pp 173-176 Q #7 QOD #21: Competitive Farming A purely competitive wheat farmer can sell
More informationECON 101 Introduction to Economics1
ECON 101 Introduction to Economics1 Session 10 Cost Concept Lecturer: Mrs. Hellen A. Seshie-Nasser, Department of Economics Contact Information: haseshie@ug.edu.gh College of Education School of Continuing
More informationCOST THEORY. I What costs matter? A Opportunity Costs
COST THEORY Cost theory is related to production theory, they are often used together. However, here the question is how much to produce, as opposed to which inputs to use. That is, assume that we use
More informationPICK ONLY ONE BEST ANSWER FOR EACH BINARY CHOICE OR MULTIPLE CHOICE QUESTION.
Econ 101 Summer 2015 Answers to Second Mid-term Date: June 15, 2015 Student Name Version 1 READ THESE INSTRUCTIONS CAREFULLY. DO NOT BEGIN WORKING UNTIL THE PROCTOR TELLS YOU TO DO SO You have 75 minutes
More informationMultiple Choice Part II, A Part II, B Part III Total
SIMON FRASER UNIVERSITY ECON 103 (2007-2) MIDTERM EXAM NAME Student # Tutorial # Multiple Choice Part II, A Part II, B Part III Total PART I. MULTIPLE CHOICE (56%, 1.75 points each). Answer on the bubble
More informationPractice Test for Final
Name: Class: Date: Practice Test for Final True/False Indicate whether the statement is true or false. 1. A public good or service can be consumed by paying and nonpaying customers alike. 2. An example
More informationHOMEWORK ECON SFU
HOMEWORK 1998-2 ECON 103 - SFU the law of diminishing returns have on short-run costs? Be specific. (e) âwhen... And when marginal product is diminishing, marginal cost is rising.â Illustrate and... ECON
More informationOther examples of monopoly include Australia Post.
In this session we will look at monopolies, where there is only one firm in the market with no close substitutes. For example, Microsoft first designed the operating system Windows. As a result of this
More informationFigure: Computing Monopoly Profit
Name: Date: 1. Compared to perfect competition: A) monopoly produces more at a lower price. B) monopoly produces where MR > MC, and a perfectly competitively firm produces where P = MC. C) monopoly may
More informationECON 2100 Principles of Microeconomics (Summer 2016) Monopoly
ECON 21 Principles of Microeconomics (Summer 216) Monopoly Relevant readings from the textbook: Mankiw, Ch. 15 Monopoly Suggested problems from the textbook: Chapter 15 Questions for Review (Page 323):
More informationT ( P ( ) * FA F D A S
Supply and Demand Basics Law of Supply Law of Demand Equilibrium Key Topics Demand Supply Equilibrium (shortage/surplus) Floor/Ceiling Elasticity Indifference Curves Utility Physical Product (Supply Side)
More informationChapter 15: Monopoly. Notes. Watanabe Econ Monopoly 1 / 83. Notes. Watanabe Econ Monopoly 2 / 83. Notes
Econ 3 Introduction to Economics: Micro Chapter : Monopoly Instructor: Hiroki Watanabe Spring 3 Watanabe Econ 93 Monopoly / 83 Monopolistic Market Monopolistic Pricing 3 Inefficiency of Monopoly Price
More informationThe Behavior of Firms
Chapter 5 The Behavior of Firms This chapter focuses on how producers make decisions regarding supply. Individuals demand goods and services. Firms supply goods and services. An important assumption is
More informationPure Monopoly. McGraw-Hill/Irwin. Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
10 Pure Monopoly McGraw-Hill/Irwin Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Four Market Models Characteristics of the Four Basic Market Models Characteristic Number of firms
More informationTitle: Micro In the market below, what would be true at a price of $6?
Title: Micro 1.1 1. In the market below, what would be true at a price of $6? a. There is excess demand (a shortage) of 10 units. b. The market is in equilibrium. *c. There is excess supply (a surplus)
More informationmicroeconomics II first module
Lecture 2 Perfectly competitive markets Kosmas Marinakis, Ph.. Important notes 1. Homework 1 will is due on Monday 2. Practice problem set 2 is online microeconomics II first module 2013-18 Kosmas Marinakis,
More information2. Why is a firm in a purely competitive labor market a wage taker? What would happen if it decided to pay less than the going market wage rate?
Chapter Wage Determination QUESTIONS. Explain why the general level of wages is high in the United States and other industrially advanced countries. What is the single most important factor underlying
More informationECON 101 Introduction to Economics1
ECON 101 Introduction to Economics1 Session 11 Market Structures(Perfect Competition) Lecturer: Mrs. Hellen A. Seshie-Nasser, Department of Economics Contact Information: haseshie@ug.edu.gh College of
More informationMicro Economics M.A. Economics (Previous) External University of Karachi Micro-Economics
Micro Economics M.A. Economics (Previous) External University of Karachi Micro-Economics Annual Examination 1997 Time allowed: 3 hours Marks: 100 Maximum 1) Attempt any five questions. 2) All questions
More informationECO201: PRINCIPLES OF MICROECONOMICS FIRST MIDTERM EXAMINATION
YOUR NAME Row Number ECO201: PRINCIPLES OF MICROECONOMICS FIRST MIDTERM EXAMINATION Prof. Bill Even Novermber 12, 2015 FORM 1 Directions 1. Fill in your scantron with your unique-id and the form number
More informationProduction and Cost. This Is What You Need to Know. Explain the difference between accounting and economic costs and how they affect the determination
Chiang_3E_CT_Micro_CH07_Layout 1 3/20/14 2:29 PM Page 175 7 Production and Cost Production and Cost Are Behind Decisions About Supply Having looked in the last chapter at what lies behind demand curves
More information1. If the per unit cost of production falls, then... A.) the supply curve shifts right (or down)
1. If the per unit cost of production falls, then... A.) the supply curve shifts right (or down) B.) there is a downward movement along the existing supply curve which does not shift C.) the supply curve
More informationPerfectly Competitive Supply. Chapter 6. Learning Objectives
Perfectly Competitive Supply Chapter 6 McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Learning Objectives 1.Explain how opportunity cost is related to the supply
More informationProblem Set 3 Eco 112, Spring 2011 Chapters covered: Ch. 6 and Ch. 7 Due date: March 3, 2011
Problem Set 3 Eco 112, Spring 2011 Chapters covered: Ch. 6 and Ch. 7 Due date: March 3, 2011 There are 30 multiple choice questions in this problem set. Answer these questions by the beginning of the class
More information