Exam 3. Make sure your name, date, section number and Exam 3 appear on the scantron please.

Size: px
Start display at page:

Download "Exam 3. Make sure your name, date, section number and Exam 3 appear on the scantron please."

Transcription

1 Exam 3 Make sure your name, date, section number and Exam 3 appear on the scantron please. 1. A student might describe information about the costs of production as a. dry and technical. b. boring. c. crucial to understanding firms and market structures. d. All of the above could be correct. 2. Economists normally assume that the goal of a firm is to (i) sell as much of its product as possible. (ii) set the price of the product as high as possible. (iii) maximize profit. a. (i) and (ii) only b. (ii) and (iii) only c. (iii) only d. (i), (ii), and (iii) 3. Trevor s Tire Company produced and sold 500 tires. The average cost of production per tire was $50. Each tire sold for a price of $65. Trevor s Tire Company s total costs are a. $7,500. b. $25,000. c. $32,500. d. $67, Economic profit is equal to total revenue minus the a. explicit cost of producing goods and services. b. opportunity cost of producing goods and services. c. accounting cost of producing goods and services. d. implicit cost of producing goods and services. 5. Average total cost (ATC) is calculated as follows: a. ATC = (change in total cost)/(change in quantity of output). b. ATC = (change in total cost)/(change in quantity of input). c. ATC = (total cost)/(quantity of output). d. ATC = (total cost)/(quantity of input). Page 1

2 Table 13-2 Number of Workers Total Output Marginal Product Refer to Table What is the marginal product of the first worker? a. 250 units b. 200 units c. 150 units d. 50 units 7. Refer to Table At which number of workers does diminishing marginal product begin? a. 1 b. 2 c. 3 d As Bubba's Bubble Gum Company adds workers while using the same amount of machinery, some workers may be underutilized because they have little work to do while waiting in line to use the machinery. When this occurs, Bubba s Bubble Gum Company encounters a. economies of scale. b. diseconomies of scale. c. increasing marginal product. d. diminishing marginal product. 9. Which of the following costs of publishing a book is a fixed cost? a. author royalties of 5% per book b. the costs of paper and binding c. shipping and postage expenses d. composition, typesetting, and jacket design for the book Page 2

3 Table 13-7 The Flying Elvis Copter Rides Quantity Total Fixed Variable Marginal Average Fixed Average Variable 0 $50 $50 $ $150 A B C D E F 2 G H I $120 J K L 3 M N O P Q $120 R 10. Refer to Table What is the value of G? a. $30 b. $120 c. $220 d. $ Refer to Table What is the value of H? a. $0 b. $50 c. $220 d. $ Refer to Table What is the value of I? a. $110 b. $120 c. $220 d. $270 Figure 13-7 Average Total 13. Refer to Figure Which of the figures represents the total cost curve for a typical firm? a. Figure 1 b. Figure 2 c. Figure 3 d. Figure 4 Page 3

4 14. Refer to Figure Which of the figures represents the marginal cost curve for a typical firm? a. Figure 1 b. Figure 2 c. Figure 3 d. Figure 4 Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. 15. Refer to Figure Which of the curves is most likely to characterize the short-run average total cost curve of the smallest factory? a. ATC A b. ATC B c. ATC C d. ATC D 16. Refer to Figure The firm experiences economies of scale at which output levels? a. output levels less than M b. output levels between M and N c. output levels greater than N d. All of the above are correct as long as the firm is operating in the long run. 17. A book store that has market power can a. influence the market price for the books it sells. b. minimize costs more efficiently than its competitors. c. reduce its advertising budget more so than its competitors. d. ignore profit-maximizing strategies when setting the price for its books. Page 4

5 18. Which of the following is not a characteristic of a perfectly competitive market? a. Buyers and sellers are price takers. b. Each firm sells a virtually identical product. c. Entry is limited. d. Each firm chooses an output level that maximizes profits. 19. The Doris Dairy Farm sells milk to a dairy broker in Prairie du Chien, Wisconsin. Because the market for milk is generally considered to be competitive, the Doris Dairy Farm does not choose the a. quantity of milk to produce. b. price at which it sells its milk. c. profits it earns. d. All of the above are correct. Table 14-2 The table represents a demand curve faced by a firm in a competitive market. Price Quantity $4 0 $4 1 $4 2 $4 3 $4 4 $ Refer to Table A firm operating in a competitive market maximizes total revenue by producing a. 2 units. b. 3 units. c. 4 units. d. as many units as possible. 21. Refer to Table For a firm operating in a competitive market, the marginal revenue from selling the 3rd unit is a. $12. b. $4. c. $3. d. $1.25. Page 5

6 Table 14-7 Suppose that a firm in a competitive market faces the following revenues and costs: Marginal Marginal Quantity Revenue 12 $5 $9 13 $6 $9 14 $7 $9 15 $8 $9 16 $9 $9 17 $10 $9 22. Refer to Table If the firm is currently producing 14 units, what would you advise the owners? a. decrease quantity to 13 units b. increase quantity to 17 units c. continue to operate at 14 units d. increase quantity to 16 units 23. Competitive firms that earn a loss in the short run should a. shut down if P < AVC. b. raise their price. c. lower their output. d. All of the above are correct. 24. Which of the following is a characteristic of a monopoly? a. low fixed costs as a portion of total costs b. free entry and exit c. barriers to entry d. declining marginal cost 25. Which of the following is an example of a barrier to entry? a. Tom charges a higher price than his competitors for his house-painting services. b. Dick obtains a copyright for the new computer game that he invented. c. Harry offers free concerts on Sunday afternoons as a form of advertising. d. Larry charges a lower price than his competitors for his lawn-mowing services. Page 6

7 Figure Refer to Figure In order to maximize profits, the monopolist should produce a. 9 units. b. 12 units. c. 15 units. d. more than 15 units. 27. Refer to Figure In order to maximize profits, the monopolist should charge a price of a. $9. b. $12. c. $20. d. $ Refer to Figure A profit-maximizing monopolist would earn total revenues of a. $81. b. $144. c. $225. d. $ Refer to Figure A profit-maximizing monopolist would incur total costs of a. $81. b. $120. c. $144. d. $ Refer to Figure A profit-maximizing monopolist would earn profits of a. $96. b. $117. c. $120. d. $126. Page 7

8 31. A monopoly is an inefficient way to produce a product because a. it can earn both short-run and long-run profits. b. it faces a downward-sloping demand curve. c. the cost to the monopolist of producing one more unit exceeds the value of that unit to potential buyers. d. it produces a smaller level of output than would be produced in a competitive market. 32. The social cost of a monopoly is equal to its a. economic profit. b. fixed cost. c. dead weight loss. d. variable cost. 33. During the holiday season, high-end retailers frequently place a high price on merchandise on weekends and discount the price during the week. They do this because they believe that two groups of customers exist: shoppers with little free time and bargain hunters. Bargain hunters have time to shop around and frequently shop during the week. What do economists call this price strategy used by high-end retailers? a. oligopoly b. price discrimination c. compensating differential d. in-kind transfers 34. Perfect price discrimination a. eliminates deadweight loss. b. reduces profits to the monopolist. c. decreases the total quantity sold by the monopolist. d. requires arbitrage in order for the monopolist to maximize profits. Page 8

9 ID: A Exam 3 Answer Section MULTIPLE CHOICE 1. D 2. C 3. B 4. B 5. C 6. B 7. C 8. D 9. D 10. D 11. B 12. C 13. B 14. A 15. A 16. A 17. A 18. C 19. B 20. D 21. B 22. D 23. A 24. C 25. B 26. B 27. C 28. D 29. B 30. C 31. D 32. C 33. B 34. A Page 1

2) A production method that relies on large quantities of labor and smaller quantities of capital equipment is referred to as a: 2)

2) A production method that relies on large quantities of labor and smaller quantities of capital equipment is referred to as a: 2) Micro: TA Session 4, Problem set MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The main difference between a short-run production function and

More information

I enjoy teaching this class. Good luck and have a nice Holiday!!

I 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 information

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

MULTIPLE 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 information

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

MULTIPLE 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 information

Microeconomics. More Tutorial at

Microeconomics.   More Tutorial at Microeconomics 1. Economists assume that the goal of the firm is to maximize A. total revenue B. total profit C. total costs D. total satisfaction 2. If a perfectly competitive firm produces 100 units

More information

ECON 260 (2,3) Practice Exam #4 Spring 2007 Dan Mallela

ECON 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 information

INTRODUCTION ECONOMIC PROFITS

INTRODUCTION ECONOMIC PROFITS INTRODUCTION This chapter addresses the following key questions: What are profits? What are the unique characteristics of competitive firms? How much output will a competitive firm produce? Chapter 7 THE

More information

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. AUBG, Fall 2015, Principles Micro with P. Stankov, Sample MT2 NOTE: The actual no. of questions on the actual MT will be 30, each for 0.67 grade points. MULTIPLE CHOICE. Choose the one alternative that

More information

short run long run short run consumer surplus producer surplus marginal revenue

short run long run short run consumer surplus producer surplus marginal revenue Test 3 Econ 3144 Name Fall 2005 Dr. Rupp 20 Multiple Choice Questions (50 points) & 4 Discussion (50 points) Signature I have neither given nor received aid on this exam Use this table to answer questions

More information

Choose the single best answer for each question. Do all of your scratch work in the margins or in the blank space at the bottom of the last page.

Choose the single best answer for each question. Do all of your scratch work in the margins or in the blank space at the bottom of the last page. Econ 0, Section 2, S0, Schroeter Exam #4, Special code = Choose the single best answer for each question. Do all of your scratch work in the margins or in the blank space at the bottom of the last page..

More information

Choose the single best answer for each question. Do all of your scratch work in the margins or in the blank space at the bottom of the last page.

Choose the single best answer for each question. Do all of your scratch work in the margins or in the blank space at the bottom of the last page. Econ 0, Section 2, S0, Schroeter Exam #4, Special code = 2 Choose the single best answer for each question. Do all of your scratch work in the margins or in the blank space at the bottom of the last page..

More information

ECON 2100 (Summer 2016 Sections 10 & 11) Exam #3C

ECON 2100 (Summer 2016 Sections 10 & 11) Exam #3C ECON 21 (Summer 216 Sections 1 & 11) Exam #3C Multiple Choice Questions: (3 points each) 1. I am taking of the exam. C. Version C 2. is a market structure in which there is one single seller of a unique

More information

ECON 2100 (Summer 2016 Sections 10 & 11) Exam #3D

ECON 2100 (Summer 2016 Sections 10 & 11) Exam #3D ECON 21 (Summer 216 Sections 1 & 11) Exam #3D Multiple Choice Questions: (3 points each) 1. I am taking of the exam. D. Version D 2. is a market structure in which there is one single seller of a unique

More information

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. PRACTICE FOR PERFECT COMPETITION Fatma Nur Karaman MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) What is the difference between perfect competition

More information

Monopolistic Competition. Chapter 17

Monopolistic 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 information

ECON 2100 (Summer 2014 Sections 08 & 09) Exam #3D

ECON 2100 (Summer 2014 Sections 08 & 09) Exam #3D ECON 21 (Summer 214 Sections 8 & 9) Exam #3D Multiple Choice Questions: (3 points each) 1. I am taking of the exam. D. Version D 2. If a firm is currently operating at a point where costs of production

More information

Eastern Mediterranean University Faculty of Business and Economics Department of Economics Fall Semester

Eastern Mediterranean University Faculty of Business and Economics Department of Economics Fall Semester Eastern Mediterranean University Faculty of Business and Economics Department of Economics 2014 15 Fall Semester ECON101 Introduction to Economics I Final Exam Type A 26 January 2015 Duration: 100 minutes

More information

Quiz #5 Week 04/12/2009 to 04/18/2009

Quiz #5 Week 04/12/2009 to 04/18/2009 Quiz #5 Week 04/12/2009 to 04/18/2009 You have 30 minutes to answer the following 17 multiple choice questions. Record your answers in the bubble sheet. Your grade in this quiz will count for 1% of your

More information

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

MULTIPLE 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 information

Slides and Images, Worth Publishers Inc. 8-1

Slides 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 information

https://www.quia.com/servlets/quia.web.quiawebmanager?rand...

https://www.quia.com/servlets/quia.web.quiawebmanager?rand... Version A Name Date Unit 4 Practice all at once 1. Refer to the following table about the production function for Terry's Widget Shoppe to answer questions 1-4. Assume labor is the only variable input

More information

Principles of Microeconomics Module 5.1. Understanding Profit

Principles 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 information

Lecture 11. Firms in competitive markets

Lecture 11. Firms in competitive markets Lecture 11 Firms in competitive markets By the end of this lecture, you should understand: what characteristics make a market competitive how competitive firms decide how much output to produce how competitive

More information

Practice Exam 3: S201 Walker Fall with answers to MC

Practice Exam 3: S201 Walker Fall with answers to MC Practice Exam 3: S201 Walker Fall 2007 - with answers to MC Print Your Name: I. Multiple Choice (3 points each) 1. If marginal utility is falling then A. total utility must be falling. B. marginal utility

More information

ECON 102 Brown Final Exam Practice Exam Solutions

ECON 102 Brown Final Exam Practice Exam Solutions www.liontutors.com ECON 102 Brown Final Exam Practice Exam Solutions 1. B 2. C 3. C All products are identical (homogenous) in perfect competition so there is no such thing as brand preference. 4. C Breakeven

More information

2007 Thomson South-Western

2007 Thomson South-Western WHAT IS A COMPETITIVE MARKET? A competitive market has many buyers and sellers trading identical products so that each buyer and seller is a price taker. Buyers and sellers must accept the price determined

More information

Eastern Mediterranean University Faculty of Business and Economics Department of Economics Fall Semester

Eastern Mediterranean University Faculty of Business and Economics Department of Economics Fall Semester Eastern Mediterranean University Faculty of Business and Economics Department of Economics 2016-17 Fall Semester Duration: 110 minutes ECON101 - Introduction to Economics I Final Exam Type A 11 January

More information

Unit 6 Perfect Competition and Monopoly - Practice Problems

Unit 6 Perfect Competition and Monopoly - Practice Problems Unit 6 Perfect Competition and Monopoly - Practice Problems Multiple Choice Identify the choice that best completes the statement or answers the question. 1. One characteristic of a perfectly competitive

More information

ECO 2023 Principles of Microeconomics Fall 2013 Practice Test #2. 1. Which of the following are factors of production?

ECO 2023 Principles of Microeconomics Fall 2013 Practice Test #2. 1. Which of the following are factors of production? ECO 2023 Principles of Microeconomics Fall 2013 Practice Test #2 1. Which of the following are factors of production? A. Output in a production function. B. Productivity. C. Land, labor, capital, and entrepreneurship.

More information

MARKETS. Part Review. Reading Between the Lines SONY CORP. HAS CUT THE U.S. PRICE OF ITS PLAYSTATION 2

MARKETS. Part Review. Reading Between the Lines SONY CORP. HAS CUT THE U.S. PRICE OF ITS PLAYSTATION 2 Part Review 4 FIRMS AND MARKETS Reading Between the Lines SONY CORP. HAS CUT THE U.S. PRICE OF ITS PLAYSTATION 2 On May 14, 2002 Sony announced it was cutting the cost of its PlayStation 2 by 33 percent,

More information

ECON 102 Kagundu Final Exam (New Material) Practice Exam Solutions

ECON 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 information

2007 Thomson South-Western

2007 Thomson South-Western Monopolistic Competition Characteristics: Many sellers Product differentiation Free entry and exit In the long run, profits are driven to zero Firms have some control over price What does the costs graph

More information

ECON 2100 (Summer 2010 Sections 05 and 06) Exam #3 (Version C)

ECON 2100 (Summer 2010 Sections 05 and 06) Exam #3 (Version C) ECON 21 (Summer 21 Sections 5 and 6) Exam #3 (Version C) Multiple Choice Questions: (3 points each) 1. Average Fixed costs of Production A. are defined as Fixed Costs of Production divided by quantity

More information

CH 13. Name: Class: Date: Multiple Choice Identify the choice that best completes the statement or answers the question.

CH 13. Name: Class: Date: Multiple Choice Identify the choice that best completes the statement or answers the question. Class: Date: CH 13 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. One requirement for an industry to be perfectly competitive is that a. sellers and buyers

More information

Monopoly. Cost. Average total cost. Quantity of Output

Monopoly. 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 information

23 Perfect Competition

23 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 information

ECON 2100 (Summer 2015 Sections 07 & 08) Exam #3A

ECON 2100 (Summer 2015 Sections 07 & 08) Exam #3A ECON 2100 (Summer 2015 Sections 07 & 08) Exam #3A Multiple Choice Questions: (3 points each) 1. I am taking of the exam. A. Version A 2. For a firm with market power Marginal Revenue, while for a firm

More information

Practice Test for Midterm 2 Econ Fall 2009 Instructor: Soojae Moon

Practice 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 information

ECO201: PRINCIPLES OF MICROECONOMICS SECOND MIDTERM EXAMINATION

ECO201: PRINCIPLES OF MICROECONOMICS SECOND MIDTERM EXAMINATION Name Seat Assignment ECO201: PRINCIPLES OF MICROECONOMICS SECOND MIDTERM EXAMINATION November 17, 2009 FORM 3. Directions 1. FILL IN YOUR SCANTRON WITH YOUR UNIQUE ID AND THE FORM NUMBER LISTED ON THIS

More information

ECO201: PRINCIPLES OF MICROECONOMICS FIRST MIDTERM EXAMINATION

ECO201: PRINCIPLES OF MICROECONOMICS FIRST MIDTERM EXAMINATION YOUR NAME Row Number ECO201: PRINCIPLES OF MICROECONOMICS FIRST MIDTERM EXAMINATION Prof. Bill Even November 14, 2011 FORM 2 Directions 1. Fill in your scantron with your unique-id and the form number

More information

ECO201: PRINCIPLES OF MICROECONOMICS FIRST MIDTERM EXAMINATION

ECO201: PRINCIPLES OF MICROECONOMICS FIRST MIDTERM EXAMINATION YOUR NAME Row Number ECO201: PRINCIPLES OF MICROECONOMICS FIRST MIDTERM EXAMINATION Prof. Bill Even November 14, 2011 FORM 4 Directions 1. Fill in your scantron with your unique-id and the form number

More information

Monopoly and How It Arises

Monopoly and How It Arises 13 MONOPOLY Monopoly and How It Arises A monopoly is a market: That produces a good or service for which no close substitute exists If a good has a close substitute, even if it is produced by only one

More information

Unit 13 AP Economics - Practice

Unit 13 AP Economics - Practice DO NOT WRITE ON THIS TEST! Unit 13 AP Economics - Practice Multiple Choice Identify the choice that best completes the statement or answers the question. 1. A natural monopoly exists whenever a single

More information

Microeconomics Exam Notes

Microeconomics Exam Notes Microeconomics Exam Notes Opportunity Cost What you give up to get it Production Possibility Frontier Maximum attainable combination of two products (Concept of Opportunity Cost). Main Decision Makers:

More information

ECO201: PRINCIPLES OF MICROECONOMICS SECOND MIDTERM EXAMINATION

ECO201: PRINCIPLES OF MICROECONOMICS SECOND MIDTERM EXAMINATION Name Seat Assignment ECO201: PRINCIPLES OF MICROECONOMICS SECOND MIDTERM EXAMINATION November 17, 2009 FORM 4. Directions 1. FILL IN YOUR SCANTRON WITH YOUR UNIQUE ID AND THE FORM NUMBER LISTED ON THIS

More information

ECO201: PRINCIPLES OF MICROECONOMICS SECOND MIDTERM EXAMINATION

ECO201: PRINCIPLES OF MICROECONOMICS SECOND MIDTERM EXAMINATION Name Seat Assignment ECO201: PRINCIPLES OF MICROECONOMICS SECOND MIDTERM EXAMINATION November 17, 2009 FORM 1. Directions 1. FILL IN YOUR SCANTRON WITH YOUR UNIQUE ID AND THE FORM NUMBER LISTED ON THIS

More information

Monopoly. Basic Economics Chapter 15. Why Monopolies Arise. Monopoly

Monopoly. Basic Economics Chapter 15. Why Monopolies Arise. Monopoly 1 Why Monopolies Arise Basic Economics Chapter 15 Monopoly Monopoly - The monopolist is a firm that is the sole seller of a product (or service) without close substitutes - The monopolist is a price maker

More information

Section I (20 questions; 1 mark each)

Section I (20 questions; 1 mark each) Foundation Course in Managerial Economics Examination Marks- 100, Time 3 hours Section I (20 questions; 1 mark each) 1. Which of the following statements is not true: a. Rich countries also face problems

More information

FINALTERM EXAMINATION FALL 2006

FINALTERM EXAMINATION FALL 2006 FINALTERM EXAMINATION FALL 2006 QUESTION NO: 1 (MARKS: 1) - PLEASE CHOOSE ONE Compared to the equilibrium price and quantity sold in a competitive market, a monopolist Will charge a price and sell a quantity.

More information

Midterm Exam 2 Green

Midterm Exam 2 Green Econ 226, Section 4 Fall, 22 Dr. Kathryn Wilson NAME Midterm Exam 2 Green Instructions 1. Do not turn this page until you are instructed to do so. 2. Put away all books and papers by placing them under

More information

Sample Exam Questions/Chapter 12. Use the following to answer question 1: Figure: Short-Run Costs

Sample Exam Questions/Chapter 12. Use the following to answer question 1: Figure: Short-Run Costs Sample Exam Questions/Chapter 12 Use the following to answer question 1: Figure: Short-Run Costs 1. (Figure: Short-Run Costs) Look at the figure Short-Run Costs. At the given price, the most profitable

More information

ECON 2100 (Summer 2015 Sections 07 & 08) Exam #3C

ECON 2100 (Summer 2015 Sections 07 & 08) Exam #3C ECON 21 (Summer 215 Sections 7 & 8) Exam #3C Multiple Choice Questions: (3 points each) 1. I am taking of the exam. C. Version C 2. is a market structure in which there is one single seller of a unique

More information

Section I (20 questions; 1 mark each)

Section I (20 questions; 1 mark each) Foundation Course in Managerial Economics- Solution Set- 1 Final Examination Marks- 100 Section I (20 questions; 1 mark each) 1. Which of the following statements is not true? a. Societies face an important

More information

WHAT IS A COMPETITIVE MARKET?

WHAT IS A COMPETITIVE MARKET? Chapter 14. Firms 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. small relative

More information

Microeconomics (Spring 2015) Final Exam Study Guide

Microeconomics (Spring 2015) Final Exam Study Guide Microeconomics (Spring 2015) Final Exam Study Guide 1 Note: Below is a list of study questions for the upcoming Part 1 of the final exam, June 10 (Ch. 13, 14, 15, and 17). Please answer them (all of them

More information

CHAPTER 8 Competitive Firms and Markets

CHAPTER 8 Competitive Firms and Markets CHAPTER 8 Competitive Firms and Markets CHAPTER OUTLINE 8.1 Competition Price Taking Why the Firm s Demand Curve Is Horizontal Why We Study Competition 8.2 Profit Maximization Profit Two Steps to Maximizing

More information

AP Microeconomics Review Session #3 Key Terms & Concepts

AP 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 information

ECON 102 Brown Final Exam (New Material) Practice Exam Solutions

ECON 102 Brown Final Exam (New Material) Practice Exam Solutions www.liontutors.com ECON 102 Brown Final Exam (New Material) Practice Exam Solutions 1. B A very large percent of their earnings comes from economic rent 2. B Any funds left, after everyone who has a claim

More information

Principles of Economics Final Exam. Name: Student ID:

Principles 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 information

Monopolistic Competition

Monopolistic Competition 16 Monopolistic Competition PowerPoint Slides prepared by: Andreea CHIRITESCU Eastern Illinois University 1 Monopolistic Competition Imperfect competition Between perfect competition and monopoly Oligopoly

More information

Principles of. Economics. Week 6. Firm in Competitive & Monopoly market. 7 th April 2014

Principles of. Economics. Week 6. Firm in Competitive & Monopoly market. 7 th April 2014 Principles of Economics Week 6 Firm in Competitive & Monopoly market 7 th April 2014 In this week, look for the answers to these questions:!what is a perfectly competitive market?!what is marginal revenue?

More information

CONTENTS. Introduction to the Series. 1 Introduction to Economics 5 2 Competitive Markets, Demand and Supply Elasticities 37

CONTENTS. Introduction to the Series. 1 Introduction to Economics 5 2 Competitive Markets, Demand and Supply Elasticities 37 CONTENTS Introduction to the Series iv 1 Introduction to Economics 5 2 Competitive Markets, Demand and Supply 17 3 Elasticities 37 4 Government Intervention in Markets 44 5 Market Failure 53 6 Costs of

More information

Chapter 6. Competition

Chapter 6. Competition Chapter 6 Competition Copyright 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 1-1 Chapter 6 The goal of this

More information

Econ 2113: Principles of Microeconomics. Spring 2009 ECU

Econ 2113: Principles of Microeconomics. Spring 2009 ECU Econ 2113: Principles of Microeconomics Spring 2009 ECU Chapter 12 Monopoly Market Power Market power is the ability to influence the market, and in particular the market price, by influencing the total

More information

MICROECONOMICS - CLUTCH CH PERFECT COMPETITION.

MICROECONOMICS - CLUTCH CH PERFECT COMPETITION. !! www.clutchprep.com CONCEPT: THE FOUR MARKET MODELS Market structure describes the environment in which a firm operates, determined by the Perfect Competition Monopolistic Competition Oligopoly Monopoly

More information

Firms in competitive markets: Perfect Competition and Monopoly

Firms in competitive markets: Perfect Competition and Monopoly Lesson 6 Firms in competitive markets: Perfect Competition and Monopoly Henan University of Technology Sino-British College Transfer Abroad Undergraduate Programme 0 In this lesson, look for the answers

More information

Monopolistic Competition

Monopolistic Competition Monopolistic Competition CHAPTER16 C H A P T E R C H E C K L I S T When you have completed your study of this chapter, you will be able to 1 Describe and identify monopolistic competition. 2 Explain how

More information

AGENDA 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 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 information

Teaching about Market Structures

Teaching 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 information

Chapter 14 Perfectly competitive Market

Chapter 14 Perfectly competitive Market Chapter 14 Perfectly competitive Market But first lets look at this Profit Maximization Profit Maximization This occurs where marginal revenue (MR) = marginal cost (MC). MR = MC Marginal revenue is the

More information

Monopoly. 3 Microeconomics LESSON 5. Introduction and Description. Time Required. Materials

Monopoly. 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 information

ECON December 4, 2008 Exam 3

ECON December 4, 2008 Exam 3 Name Portion of ID# Multiple Choice: Identify the letter of the choice that best completes the statement or answers the question. 1. A fundamental source of monopoly market power arises from a. perfectly

More information

Chapter Summary and Learning Objectives

Chapter 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 information

MIDTERM II. GROUP A Instructions: December 18, 2013

MIDTERM II. GROUP A Instructions: December 18, 2013 EC101 Sections 03 Fall 2013 NAME: ID #: SECTION: MIDTERM II December 18, 2013 GROUP A Instructions: You have 60 minutes to complete the exam. There will be no extensions. The exam consists of 30 multiple

More information

Textbook Media Press. CH 12 Taylor: Principles of Economics 3e 1

Textbook Media Press. CH 12 Taylor: Principles of Economics 3e 1 CH 12 Taylor: Principles of Economics 3e 1 Monopolistic Competition and Differentiated Products Monopolistic competition refers to a market where many firms sell differentiated products. Differentiated

More information

= AFC + AVC = (FC + VC)

= AFC + AVC = (FC + VC) Chapter 13-14: Marginal Product, Costs, Revenue, and Profit Production Function The relationship between the quantity of inputs (workers) and quantity of outputs Total product (TP) is the total amount

More information

Chapter 6: Sellers and Incentives

Chapter 6: Sellers and Incentives Chapter 6: Sellers and Incentives Modified by Chapter Outline 6. 6. 6. 6. 6. 6. 1. Sellers in a Perfectly Competitive Market 2. The Seller's Problem 3. From Seller's Problem to Supply Curve 4. Producer

More information

Econ 111 2nd MT 16 17

Econ 111 2nd MT 16 17 Econ 111 2nd MT 16 17 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. Starting from a situation in which a firm in a competitive market produces and sells

More information

Monopoly, Oligopoly, and Monopolistic Competition Chapter 8 McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Monopoly, Oligopoly, and Monopolistic Competition Chapter 8 McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Monopoly, Oligopoly, and Monopolistic Competition Chapter 8 McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Learning Objectives 1. Distinguish among three types

More information

The above Figure 1 shows the demand and cost curves facing a monopolist.

The above Figure 1 shows the demand and cost curves facing a monopolist. Practice 13&14 1) The key characteristics of a monopolistically competitive market structure include A) few sellers. B) sellers selling similar but differentiated products. C) high barriers to entry. D)

More information

Practice Test for Final

Practice 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 information

Econ Principles of Microeconomics - Assignment 3

Econ Principles of Microeconomics - Assignment 3 Econ 2302 - Principles of Microeconomics - Assignment 3 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. Goods that are excludable include both a. club

More information

ECON 2100 (Summer 2014 Sections 08 & 09) Exam #3A

ECON 2100 (Summer 2014 Sections 08 & 09) Exam #3A ECON 21 (Summer 214 Sections 8 & 9) Exam #3A Multiple Choice Questions: (3 points each) 1. I am taking of the exam. A. Version A 2. Average Fixed Costs of Production A. must remain constant as the level

More information

CH 14. Name: Class: Date: Multiple Choice Identify the choice that best completes the statement or answers the question.

CH 14. Name: Class: Date: Multiple Choice Identify the choice that best completes the statement or answers the question. Class: Date: CH 14 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. We define a monopoly as a market with a. one supplier and no barriers to entry. b. one

More information

The Firm s Objective. A Firm s Total Revenue and Total Cost. The economic goal of the firm is to maximize profits. A Firm s Profit

The Firm s Objective. A Firm s Total Revenue and Total Cost. The economic goal of the firm is to maximize profits. A Firm s Profit The s of Production Chapter 13 Copyright 2001 by Harcourt, Inc. The s of Production The Law of Supply: Firms are willing to produce and sell a greater quantity of a good when the price of the good is high.

More information

Eco 202 Exam 2 Spring 2014

Eco 202 Exam 2 Spring 2014 Eco 202 Exam 2 Spring 2014 PLEASE ANSWER 50 OF THE FOLLOWING QUESTIONS. 1. Jon Brooks quit his job in a bicycle shop, where he earned $15,000 per year, to become a graduate student in economics. At the

More information

Eco402 - Microeconomics Glossary By

Eco402 - Microeconomics Glossary By Eco402 - Microeconomics Glossary By Break-even point : the point at which price equals the minimum of average total cost. Externalities : the spillover effects of production or consumption for which no

More information

Week One What is economics? Chapter 1

Week One What is economics? Chapter 1 Week One What is economics? Chapter 1 Economics: is the social science that studies the choices that individuals, businesses, governments, and entire societies make as they cope with scarcity and the incentives

More information

Chapter Chapter 6. Sellers and Incentives. Outline. Sellers in a Perfectly Competitive Market. The Seller s Problem

Chapter Chapter 6. Sellers and Incentives. Outline. Sellers in a Perfectly Competitive Market. The Seller s Problem Long- Part II: Foundation of Microeconomics 5. Consumers and 6. 7. Perfect Competition and the Invisible Hand 8. Trade 9. Externalities and Public Goods 10. The Government in the Economy: Taxation and

More information

Refer to the information provided in Figure 12.1 below to answer the questions that follow. Figure 12.1

Refer to the information provided in Figure 12.1 below to answer the questions that follow. Figure 12.1 1) A monopoly is an industry with A) a single firm in which the entry of new firms is blocked. B) a small number of firms each large enough to impact the market price of its output. C) many firms each

More information

ECON 2100 (Summer 2012 Sections 07 and 08) Exam #3A

ECON 2100 (Summer 2012 Sections 07 and 08) Exam #3A ECON 21 (Summer 212 Sections 7 and 8) Exam #3A Multiple Choice Questions: (3 points each) 1. I am taking of the exam. A. Version A 2. Excess Capacity refers to the A. quantity of output at which Average

More information

VERSION 1. Economics 101 Lec 3 Elizabeth Kelly Fall 2000 Midterm #3 / Version #1 December 4, Student Name: ID Number: Section Number: TA Name:

VERSION 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 information

a. Sells a product differentiated from that of its competitors d. produces at the minimum of average total cost in the long run

a. 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 information

Quiz #4 Week 04/05/2009 to 04/11/2009

Quiz #4 Week 04/05/2009 to 04/11/2009 Quiz #4 Week 04/05/2009 to 04/11/2009 You have 30 minutes to answer the following 15 multiple choice questions. Record your answers in the bubble sheet. Your grade in this quiz will count for 1% of your

More information

Econ 200, Summer 2011, Dr. Alan and Prof. Crossley. Problem Set 2. (Reference: Mankiw and Taylor, Chapters 6, 7, 8, 13)

Econ 200, Summer 2011, Dr. Alan and Prof. Crossley. Problem Set 2. (Reference: Mankiw and Taylor, Chapters 6, 7, 8, 13) Multiple Choice Econ 200, Summer 2011, Dr. Alan and Prof. Crossley Problem Set 2 (Reference: Mankiw and Taylor, Chapters 6, 7, 8, 13) 1 Refer to the Figure below. Consider the impact of a tax on sellers,

More information

Economics. Monopolistic Perfect Competition. Monopolistic Competition. Monopolistic Competition 11/29/2013. The Big Picture. Perfect Competition

Economics. Monopolistic Perfect Competition. Monopolistic Competition. Monopolistic Competition 11/29/2013. The Big Picture. Perfect Competition 16 Modified by Joseph Tao-yi Wang Ron Cronovich The Big Picture Chapter 13: The cost of production Now, we will look at firm s revenue But revenue depends on market structure 1. Competitive market (chapter

More information

Monopolistic Competition

Monopolistic 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 information

FIRMS IN COMPETITIVE MARKETS

FIRMS IN COMPETITIVE MARKETS 14 FIRMS IN COMPETITIVE MARKETS WHAT S NEW IN THE FOURTH EDITION: The rules for profit maximization are written more clearly. LEARNING OBJECTIVES: By the end of this chapter, students should understand:

More information

Monopoly CHAPTER. Goals. Outcomes

Monopoly 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 information