Size: px
Start display at page:

Transcription

1 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 Terry uses in the production of widgets. The marginal product of labor from hiring the third worker is 450 widgets per worker. 200 widgets per worker. 150 widgets per worker. 250 widgets per worker. 2. Diminishing returns to labor begins when Terry hires the second worker. third worker. fourth worker. fifth worker. 1 of 17 11/2/16, 1:29 PM

2 3. Terry spends \$200 a month to rent a building for his company, \$600 a month for the capital he employs to produce widgets, and \$10 per hour for every worker he employs. Terry's fixed cost per month is \$200. \$600. \$800. \$ Terry spends \$200 a month to rent a building for his company, \$600 a month for the capital he employs to produce widgets, and \$10 per hour for every unit of labor he employs. deciding whether or not he is producing in the short run or the long run. whether or not the cost varies as his level of production changes. whether or not the cost exceeds \$500. recognizing that capital is always a fixed cost while rent and labor are variable costs. 5. Use the information below to answer the next four questions. The table provides production function information for Jimmy's Service Shop. Assume Jimmy hires only labor and capital to produce his services. The price of labor is \$100 per worker per week, and the price of capital is \$10 per unit. Jimmy's fixed cost of production equals \$0. \$100. \$110. \$ Jimmy's variable cost of production 2 of 17 11/2/16, 1:29 PM

3 is constant and equal to \$100 given the above information. varies with the level of output that is produced. is always greater than his fixed cost decreases as the level of production increases due to diminishing marginal returns. 7. Jimmy's total cost of producing 700 units of output is equal to the sum of his fixed and variable costs of producing this level of output. \$500. greater than his total cost of producing 600 units of output. Answers (A), (B), and (C) are all true. 8. Jimmy's marginal cost of producing the seven-hundredth unit of output is equal to 3 of 17 11/2/16, 1:29 PM

4 \$500 per unit of output. \$400 per unit of output. \$100 per unit of output. \$1 per unit of output. 9. The marginal cost curve is upward sloping as output increases due to increasing returns to scale. decreasing returns to scale. diminishing marginal returns to the variable input. increasing marginal returns to the variable input. 10. In recent years there has been an increased demand for organic produce due to concerns about health issues related to food consumption. Holding everything else constant, in the short run this demand should lead to, while in the long run. increases in the price of organic produce; entry of firms into the industry will reduce the price of organic produce increases in the price of organic produce; exit of firms from the industry will further increase the price of organic produce decreases in the price of organic produce; entry of firms into the industry will further reduce the price of organic produce decreases in the price of organic produce; exit of firms from the industry will increase the price of organic produce 11. Which of the following describes a perfectly competitive industry? Elementary school students are only allowed to attend only the school in their attendance area Water for household use is sold by the local water utility. The price of wine is determined by global supply and demand. A small share of the total world production of wine is produced in a local valley by ten companies. The price of oil is determined by global supply and demand. A total of five companies produce the world's supply of oil. 4 of 17 11/2/16, 1:29 PM

5 12. Marginal revenue is the addition to total revenue from producing one more unit of the good. cost from selling one more unit of the good. revenue from selling one more unit of the good. profit from producing and selling one more unit of the good. 13. Suppose Jerry calculates that if he produces one more box of pens, his total cost will increase by \$15, but that he can sell this box of pens for \$14.Jerry will produce the pens and increase his revenues. not produce the pens, since the revenue from the additional pens is less than the cost of producing the additional pens. produce the pens, but wait to sell them until the market price of pens increases shut down his pen production because his addition to revenue from pen production is less than his addition to cost from pen production. 14. The optimal output rule for a perfectly competitive firm is to produce that quantity at which MR = MC in the long run, but in the short run, to produce that quantity at which MC = ATC. MC = ATC in the short run. MR = MC no matter what the time period, provided that marginal revenue is greater than average variable cost. MR = MC no matter what the time period, provided that marginal revenue is greater than average total cost. 15. Which of the following statements about a perfectly competitive firm is true? I. A firm profit maximizes by producing that output where MR = MC. II. A firm will produce in the short run provided that the price of the good exceeds its average variable cost. III. A firm in the long run can make positive economic profits. Statement I Statements I and II Statements I and III Statements I, II, and III 16. When a perfectly competitive firm earns zero economic profit in the long run, this implies that accounting profits are also zero. are positive. are negative. may be positive, negative, or zero. 5 of 17 11/2/16, 1:29 PM

6 17. A firm calculates that the cost of producing its tenth unit of output is \$0.50, while the revenue from producing this tenth unit is \$0.55. This firm should definitely produce the tenth unit. should definitely stop producing because it knows it is profit maximizing and may risk reducing its profit if it produces any more units of the good. should definitely produce at least five more units if it hopes to profit maximize. cannot increase its production in the short run because its fixed inputs are constant. 18. The implicit cost of capital is: the expense associated with leasing machines. the expense associated with buying machines. the opportunity cost of capital used by a business. irrelevant for determining economic profit. the interest rate paid to the bank on loans. 19. Suppose the Chicago Cubs could rent out Wrigley Field (the field the players play on) to local youth leagues for \$11,000 per month. The \$11,000 per month reflects the of capital. implicit cost explicit cost direct cost total cost average fixed cost 20. For most firms, economic profit is: less than accounting profit. equal to accounting profit. greater than accounting profit. negative in the short run. positive in the short run but negative in the long run. 21. Economic profits are calculated by: taking the difference between total revenue and the sum of explicit and implicit costs. taking the difference between total revenue and explicit costs only. taking the difference between the total revenue and implicit costs only. 6 of 17 11/2/16, 1:29 PM

7 summing total revenue, explicit and implicit costs. summing the explicit and the implicit costs. 22. Rodger is deciding how many football games he wants to attend this year. The total benefit that Rodger receives from football games is shown in the table. Rodger's marginal benefit from increasing the number of games that he attends from two to three is: Rodger is deciding how many football games he wants to attend this year. The total benefit that Rodger receives from football games is shown in the table. If tickets to each football game cost \$10, then he should attend game(s) of 17 11/2/16, 1:29 PM

8 6 24. Rodger is deciding how many football games he wants to attend this year. The total benefit that Rodger receives from football games is shown in the table. If tickets to each football game cost \$75, he should attend game(s) Rodger is deciding how many football games he wants to attend this year. The total benefit that Rodger receives from football games is shown in the table. If the games are free, he should attend game(s) of 17 11/2/16, 1:29 PM

9 26. Referring to the table, the marginal product of the fifth worker is: The idea of diminishing returns to an input in production suggests that if a local college adds more and more custodians, the marginal product of labor for the custodial staff will over time. increase at an increasing rate increase at a decreasing rate decrease not change increase at a constant rate. 28. You own a small deli that produces sandwiches, soups, and other items for customers in your town. Which of the following is a fixed input in the production function at your deli? the dining room where customers eat their meals loaves of bread used to make sandwiches cans of tomato sauce used to make soups employees hired to help make the food electricity to power the lights and appliances. 29. A planning period during which all of a firm's resources are variable is the: long run. fixed run. short run. nominal run. production run. 9 of 17 11/2/16, 1:29 PM

10 30. Assuming that all other factors of production are held constant, marginal product is the change in output resulting from a one-unit change in. total; a variable input total; a fixed input total; average product per unit; a fixed input total; consumption 31. The costs associated with variable inputs are costs and the costs associated with inputs are costs. constant; fixed; fixed fixed; fixed; variable variable; fixed; variable fixed; fixed; fixed variable; fixed; fixed 32. Which of the following cost concepts is correctly defined? a b c d e 33. A cost that does not change with the level of output produced is called a: marginal cost. fixed cost. variable cost. average total cost. average fixed cost. 34. When a cherry orchard in Oregon adds an additional worker, the total cost of production increases by \$24,000. Adding the worker increases total cherry output by 600 pounds. Therefore, the marginal cost of the last pound of cherries produced is: 10 of 17 11/2/16, 1:29 PM

11 \$40. \$19. \$4,000. \$24,000. \$ If Marie s Marionettes is operating under conditions of diminishing marginal product, the marginal costs will be: equal to ATC. decreasing. increasing. constant. equal to zero. 36. The marginal cost curve is the mirror image of the: total product curve. average product curve. marginal product curve. average total cost curve. marginal utility curve. 37. When marginal cost is rising: average variable cost must be rising. average total cost must be rising average variable cost and average total cost must be falling. both average variable cost and average total cost may be rising or falling. marginal product is rising. 38. The curve continually declines as more output is produced in the short run. marginal cost average variable cost average fixed cost average total cost total variable cost 39. A fixed cost: 11 of 17 11/2/16, 1:29 PM

12 will exist only in the long run. depends on the level of output. will be positive, even if the firm doesn't produce any output in the short run. decreases after the point of diminishing returns is reached. exists in both the short and the long run. 40. The long run refers to the period of time for which: a fixed input exists. all inputs are variable. marginal costs are decreasing. diminishing returns causes marginal cost to increase marginal product is increasing. 41. Total cost divided by the quantity of output produced is: average total cost. average fixed cost. average product. marginal cost. average profit. 42. The marginal cost curve intersects the average variable cost curve at: its lowest point. its maximum. its endpoint. no point; the curves don't intersect. all points; the curves are the same. 43. If a firm produces 10 units of output and incurs \$30 in average variable cost and \$5 in average fixed cost, total cost is: \$35. \$50. \$300. \$350. \$ When marginal cost is above average variable cost, average variable cost must be: 12 of 17 11/2/16, 1:29 PM

13 at its minimum. at its maximum falling. equal to zero. rising. 45. The sum of fixed and variable costs is: total cost. marginal cost. variable cost. average cost. average variable cost. 46. The long-run average total cost curve is tangent to an infinite number of: short-run total cost curves. short-run marginal cost curves. short-run total cost curves. b. short-run marginal cost curves. c. short-run average variable cost curves. short-run average total cost curves. short-run total cost curves. b. short-run marginal cost curves. c. short-run average variable cost curves. d. short-run average total cost curves. e. short-run marginal product curves. 47. A university that benefits from lower costs per unit as it grows is an example of: economies of scale. diseconomies of scale. increasing opportunity costs. scale reduction. sunk costs For large beer breweries, it is common for long-run average total cost to decline as output increases. This indicates that many breweries achieve: diseconomies of scale. diminishing marginal returns. economies of scale. constant returns to scale. fixed cost minimization. 49. The U-shape of the long-run average total cost curve is primarily due to: 13 of 17 11/2/16, 1:29 PM

14 technological change. economies and diseconomies of scale. increasing and then diminishing marginal returns. sunk costs. inefficient management at all levels of output. 50. The slope of a long-run average total cost curve exhibiting decreasing returns to scale is: zero. infinite. positive. negative. downward sloping. 51. One characteristic of a perfectly competitive market is that there are sellers of the good or service. one or two a few usually less than 10 hundreds or thousands of zero 52. a local California avocado stand operates in a perfectly competitive market, that stand owner will be a: price-maker. price-taker. price-discriminator. price-maximizer. cost-maximizer. 53. A monopoly is a market structure characterized by: a single buyer and several sellers. a product with many close substitutes. a large number of small firms. price-taking behavior. barriers to entry and exit. 54. Most electric, gas, and water companies are examples of: 14 of 17 11/2/16, 1:29 PM

15 unregulated monopolies. natural monopolies. restricted-input monopolies. sunk-cost monopolies. private monopolies. 55. An oligopoly is characterized as an industry in which: there are many firms, each producing an identical product. there are many firms, each producing a similar product. all market participants are price-takers. only one firm produces a very differentiated product. there are few firms, each producing a differentiated or similar product. 15 of 17 11/2/16, 1:29 PM

16 Version A Answer Sheet Unit 4 Practice all at once widgets per worker. 2. fourth worker. 3. \$ whether or not the cost varies as his level of production changes. 5. \$ varies with the level of output that is produced. 7. Answers (A), (B), and (C) are all true. 8. \$1 per unit of output. 9. diminishing marginal returns to the variable input. 10. increases in the price of organic produce; entry of firms into the industry will reduce the price of organic produce 11. The price of wine is determined by global supply and demand. A small share of the total world production of wine is produced in a local valley by ten companies. 12. revenue from selling one more unit of the good. 13. not produce the pens, since the revenue from the additional pens is less than the cost of producing the additional pens. 14. MR = MC no matter what the time period, provided that marginal revenue is greater than average variable cost. 15. Statements I and II 16. are positive. 17. should definitely produce the tenth unit. 18. the opportunity cost of capital used by a business. 19. implicit cost 20. less than accounting profit. 21. taking the difference between total revenue and the sum of explicit and implicit costs decrease 28. the dining room where customers eat their meals 16 of 17 11/2/16, 1:29 PM

17 29. long run. 30. total; a variable input 31. variable; fixed; fixed 32. c 33. fixed cost. 34. \$ increasing. 36. marginal product curve. 37. both average variable cost and average total cost may be rising or falling. 38. average fixed cost 39. will be positive, even if the firm doesn't produce any output in the short run. 40. all inputs are variable. 41. average total cost. 42. its lowest point. 43. \$ rising. 45. total cost. 46. short-run average total cost curves. 47. economies of scale. 48. economies of scale. 49. economies and diseconomies of scale. 50. positive. 51. hundreds or thousands of 52. price-taker. 53. barriers to entry and exit. 54. natural monopolies. 55. there are few firms, each producing a differentiated or similar product. 17 of 17 11/2/16, 1:29 PM

### 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

### 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

### 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

### 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

### 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

### 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

### 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

### 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..

### 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..

### 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

### 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

### 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

### If the industry s short-run supply curve equals the horizontal sum of individual firms short-run supply curves, which of the following may we infer?

Microeconomics, Module 8: Competition: Long Run (Chapter 7) Illustrative Test Questions (The attached PDF file has better formatting.) Question 8.1: Long Run Equilibrium When is a competitive profit-maximizing

### 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

### 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

### 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

### Name: Student ID: Use the following to answer question 3: Figure: Market for Hamburgers. Version 3 Page 1

Name: Student ID: 1. Assume that a person is consuming the utility-maximizing quantities of pork and chicken. We can conclude that: A) the person is consuming the same amount of pork and chicken. B) the

### Figure: 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

### 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

### 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:

### 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

### 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

### Practice 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

### 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.

### = 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

### 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

### 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

### 4. Which of the following statements about marginal revenue for a perfectly competitive firm is incorrect? A) TR

Name: Date: 1. Which of the following will not be true of a perfectly competitive market? A) Buyers and sellers will have an imperceptible effect on the market. B) Firms can freely enter and exit the market.

### 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.

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

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

### 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

### 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

### CH 14: Perfect Competition

CH 14: Perfect Competition Characteristics of Perfect Competition 1. Both buyers and sellers are price takers A price taker is a firm (or individual) who takes the price determined by market supply and

### Quiz #3 Week 03/22/2009 to 03/28/2009

Quiz #3 Week 03/22/2009 to 03/28/2009 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

### 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

### 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

### 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

### AP Microeconomics Chapter 8 Outline

I. Learning Objectives In this chapter students should learn: A. Why economic costs include both explicit (revealed and expressed) costs and implicit (present but not obvious) costs. B. How the law of

### 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

### INTI COLLEGE MALAYSIA FOUNDATION IN BUSINESS INFORMATION TECHNOLOGY (CFP) ECO105: ECONOMICS 1 FINAL EXAMINATION: JANUARY 2006 SESSION

ECO105 (F) / Page 1 of 12 Section A INTI COLLEGE MALAYSIA FOUNDATION IN BUSINESS INFORMATION TECHNOLOGY (CFP) ECO105: ECONOMICS 1 FINAL EXAMINATION: JANUARY 2006 SESSION Instructions: This section consists

### ECON 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

### Chapter 5: Price Controls: Multiple Choice Questions Chapter 6: Elasticity Multiple Choice Questions

Chapter 5: Price Controls: Multiple Choice Questions 1. ANSWER: d. ceiling. 2. ANSWER: a. a shortage, which cannot be eliminated through market adjustment. 3. ANSWER: b. the equilibrium price is below

### 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

### 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

### Chapter 10 Pure Monopoly

Chapter 10 Pure Monopoly Multiple Choice Questions 1. Pure monopoly means: A. any market in which the demand curve to the firm is downsloping. B. a standardized product being produced by many firms. C.

### 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

### 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

### 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

### Microeconomics: MIE1102

TEXT CHAPTERS TOPICS 1, 2 ECONOMICS, ECONOMIC SYSTEMS, MARKET ECONOMY 3 DEMAND AND SUPPLY. MARKET EQUILIBRIUM 4 ELASTICITY OF DEMAND AND SUPPLY 5 DEMAND & CONSUMER BEHAVIOR 6 PRODUCTION FUNCTION 7 COSTS

### Microeconomics. Use the Following Graph to Answer Question 3

More Tutorial at www.dumblittledoctor.com Microeconomics 1. To an economist, a good is scarce when: *a. the amount of the good available is less than the amount that people want when the good's price equals

### 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

### 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

### Syllabus item: 42 Weight: 3

1.5 Theory of the firm and its market structures - Production and costs Syllabus item: 42 Weight: 3 Definition: Total product (TP): The total output that a firm produces, using its fixed and variable factors

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

### 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

### 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

### 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

### a) I, II and III. b) I c) II and III only. d) I and III only. 2. Refer to the PPF diagram below. PPF

1. Suppose that - at a given level of an economic activity - marginal social cost is greater than marginal social benefit. Which of the following statements is TRUE? I. Social surplus would be higher at

### 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

### Monopoly. 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

### 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

### 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?

### 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,

### THE UNIVERSITY OF WESTERN ONTARIO. E. Rivers ECONOMICS 1021B-001 March 18, 2012 MIDTERM #2. 2. Check that your examination contains 50 questions.

NAME THE UNIVERSITY OF WESTERN ONTARIO LONDON CANADA E. Rivers ECONOMICS 1021B-001 March 18, 2012 MIDTERM #2 INSTRUCTIONS: 1. You will have 2 hours to complete the exam. 2. Check that your examination

### 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:

### Short-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

### 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

### 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

### Exam 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

### 1 of 14 5/1/2014 4:56 PM

1 of 14 5/1/2014 4:56 PM Any point on the budget constraint Gives the consumer the highest level of utility. Represent a combination of two goods that are affordable. Represents combinations of two goods

### 8 CHAPTER OUTLINE Costs in the Short Run Fixed Costs

e PART II I The Market System: Choices Made by Households and Firms e CASE FAIR OSTER PEARSON 2012 Pearson Education, Inc. Publishing as Prentice Hall PRINCIPLES OF MICROECONOMICS E L E V E N T H E D I

### 6) The mailing must be postmarked by June 15. 7) If you have any questions please me at

Examination Instructions: 1) Answer the examination only after you have read the honesty pledge below. 2) The multiple choice section will be taken in WebCT and a tutorial for using WebCT is to be found

### 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

### MICROECONOMICS 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

### ECO201: PRINCIPLES OF MICROECONOMICS SECOND MIDTERM EXAMINATION

YOUR NAME Row Number ECO201: PRINCIPLES OF MICROECONOMICS SECOND MIDTERM EXAMINATION Prof. Bill Even November 11, 2013 FORM 4 Directions 1. Fill in your scantron with your unique-id and the form number

### ECO201: PRINCIPLES OF MICROECONOMICS SECOND MIDTERM EXAMINATION

YOUR NAME Row Number ECO201: PRINCIPLES OF MICROECONOMICS SECOND MIDTERM EXAMINATION Prof. Bill Even November 11, 2013 FORM 3 Directions 1. Fill in your scantron with your unique-id and the form number

### 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.

### Firms in Competitive Markets

Firms in Competitive Markets Yan Zeng Version 1.0.2, last revised on 2014-02-24. Abstract Study notes based on (Mankiw, 1998, pp. 263-302). The Costs of Production The amount that the firm receives for

### REDEEMER S UNIVERSITY

REDEEMER S UNIVERSITY Km 46/48 Lagos Ibadan Expressway, Redemption City, Ogun State COLLEGE OF MANAGEMENT SCIENCE DEPARTMENT OF ECONOMICS AND BUSINESS STUDIES COURSE CODE /TITLE ECO 202/Microeconomics

### Textbook Media Press. CH 10 Taylor: Principles of Economics 3e 1

CH 10 Taylor: Principles of Economics 3e 1 Quantity Produced by a Perfectly Competitive Firm A perfectly competitive firm is a price taker, which means that it must accept the prices at which its sell

### 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

### Perfect Competition CHAPTER14

Perfect Competition CHAPTER14 MARKET TYPES The four market types are Perfect competition Monopoly Monopolistic competition Oligopoly MARKET TYPES Perfect Competition Perfect competition exists when Many

### Market structures. Why Monopolies Arise. Why Monopolies Arise. Market power. Monopoly. Monopoly resources

Market structures Why Monopolies Arise Market power Alters the relationship between a firm s costs and the selling price Charges a price that exceeds marginal cost A high price reduces the quantity purchased

### INTI COLLEGE MALAYSIA BUSINESS FOUNDATION PROGRAMME ECO 181: INTRODUCTORY ECONOMICS FINAL EXAMINATION: AUGUST 2003 SESSION

ECO 181 (F) / Page 1 of 15 INTI COLLEGE MALAYSIA BUSINESS FOUNDATION PROGRAMME ECO 181: INTRODUCTORY ECONOMICS FINAL EXAMINATION: AUGUST 2003 SESSION SECTION A There are SIXTY questions on this paper.

### ICMB202/203 Microeconomics. Final Practice Questions. Carefully explain whether each of the following statements is true, false or uncertain.

ICMB202/203 Microeconomics Final Practice Questions Question 1 Carefully explain whether each of the following statements is true, false or uncertain. a) Because of their monopoly power, monopolists always

### 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

### To produce more beach balls, you must give up ever increasing quantities of ice cream cones.

Unit 01: Basic Concepts (Macro/Micro) Scarcity The Economic Problem: Unlimited wants, limited economic resources Factors of Production: -Land -Labor -Capital -Entrepreneurship Big 3 Questions: -What to

### 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

### Demand & Supply of Resources

Resource Markets 1 Demand & Supply of Resources Resource demand Firms demand resources As long as marginal revenue exceeds marginal cost To maximize profit Resource supply People supply resources To the

### Demand curve - using Game Results How much customers will buy at a given price Downward sloping - more demand at lower prices

31 October Bige Kahraman Class Notes First half of course (Michaelmas) is Microeconomics, second half (Hilary) is Macroeconomics Focusing on profit maximization & price formation Looking at industry level

### Review Notes for Chapter Optimal decision making by anyone Engage in an activity up to the point where the marginal benefit= marginal cost

Review Notes for Chapter 5 1. Optimal decision making by anyone Engage in an activity up to the point where the marginal benefit= marginal cost Sunk costs are costs which must be borne regardless of future

### 7. True/False: Perfectly competitive firms can earn economic profits in the long run. a. True b. False

Economics 4020 Dr. Rupp Test #1 Sept 27 th, 2012 20 Multiple Choice questions (2.5 points each) Pledge (sign) I did not copy another student s answers 1. STC = 40 + 10Q + 0.1Q 2. SMC = 10 + 0.2Q. The market

### 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

### Perfect 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

### 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

### Microeconomics. More Tutorial at

Microeconomics 1. Suppose a firm in a perfectly competitive market produces and sells 8 units of output and has a marginal revenue of \$8.00. What would be the firm s total revenue if it instead produced

### Market Structure & Imperfect Competition

In the Name of God Sharif University of Technology Graduate School of Management and Economics Microeconomics (for MBA students) 44111 (1393-94 1 st term) - Group 2 Dr. S. Farshad Fatemi Market Structure