question

scarcity

answer

limited resources and unlimited wants

question

economics

answer

study of society manages its scare resourecs

question

efficency

answer

the property of society getting the most from its scarce resources

question

equality

answer

the property of distrubting economic prosperity uniformly among society's members

question

rational

answer

systematically and purposefully doing the best you can to achieve your objectives

question

opportunity cost

answer

whatever is giving up to get something else

question

marginal change

answer

an incremental adjustment to an existing plan

question

market economy

answer

an economic system where interaction of households and firms in markets determines the allocation of resources

question

property rights

answer

the ability of an individual to own and exercise control over scarce resources

question

invisible hand

answer

the principle that self-interested market participants may unknowingly maximize the welfare of society as a whole

question

market failure

answer

a situation in which the market fails to allocate resources efficiently

question

externality

answer

when one person's actions have an impact on a bystander

question

market power

answer

the ability of an individual or group to substantially influent market prices

question

monopoly

answer

the case in which there is only one seller in the market

question

productivity

answer

the amount of goods and services produced from each unit of labor input

question

inflation

answer

an increase in the overall level of prices

question

business cycle

answer

fluctuations in economic activity

question

which of the following involve a tradeoff?

answer

buying a new car taking a nap going to college watching a foot ball game on a saturday afternoon

question

trade offs are required because wants are unlimited and resources are _____

answer

scarce

question

economics is the study of how

answer

society manages its scarce resources

question

a rational person does not act unless

answer

the action produces marginal benefits that exceed marginal cost

question

raising taxes and incresing welfare payments

answer

improves equality at the expense of efficiency

question

suppose you find $20. if you choose to use that $20 to go to the football game, your opportunity cost of going to the game is

answer

$20 bc you could have used that $20 to buy other things plus the value of your time spent at the game

question

forgein trade

answer

allows a country to have a greater variety of products at a lower cost than if it tried to produce everything at home

question

bc people respond to incentives we would expect that if the average salary if accountants increases by 50% while the average salary of teachers increase by 20%

answer

students will shift majors from education to accounting

question

externality example

answer

a student has a party in their form room, she is pissing off the people around her

question

example of not producing an externality

answer

food

question

describes greatest market power

answer

microsoft's impact on the prince of desktop operating system

question

true statement about a market economy

answer

market participants act as if guided by an invisible hand to produce out comes that propmote general economic well-being

question

workers in the US enjoy such a high living standard bc

answer

workers in the US are highly productive

question

high and persistent inflation is caused by

answer

gove increasing the quantity of money too much

question

in the short rin

answer

a decrease in inflation temporarily increases unemployment

question

an increase in the price of beef provides

answer

info that tells producers to produce more beef

question

you have spent 1000 building a hot for stand based on estimates of sales of 2000. the hot dog stand is nearly completed, but now you estimate total sales to be only 800. you can complete the hot dog stand for another 300. should you complete the hot dog stand? (assume hot dogs cost you nothing). your decision rule should to complete the stand as long as the cost to complete the stand is less than:

answer

800

question

the opportunity cost of going on vacation should not include which: -the money you could have made had you stayed home and worked -the money you spent on food -the money you spent on airline tickets -the money you spent on a broadway show

answer

money spent on food

question

productivity can be increased by

answer

improving workers education

question

scientific method

answer

objective development and testing of theories

question

economic models

answer

simplifications of reality based on assumptions

question

circular flow diagram

answer

a diagram of the economy that shows the flow of goods and services, factors of production, and the monetary payments between households and firms

question

factors of production

answer

inputs such as labor, land, and production

question

production possibilities frontier

answer

a graph that shows the combinations of output the economy can possibly produce given the available factors of production and the available production technology

question

efficiency

answer

getting max. output from the resources available

question

microeconomics

answer

the study of how households and forms make choices and how the interact in the market. small picture

question

macroeconomics

answer

the study of the economy- wide phenomena. large picture

question

positive statements

answer

descriptions of the world as it is

question

Normative statements

answer

prescription for how the world ought to be

question

the scientific method requires

answer

scientists to be objective

question

which of the following is most likely to produce scientific evidence about a theory? chap 2

answer

a tenured economist emplyed at a leading university analyzing the impact of bank regulations on real lending

question

which of the following statements regarding the circular flow diagram is true? chap 2

answer

the factors of production are owned by households

question

in which of the following cases is the assumption most reasonable chap 2

answer

to address the benefit of trade an economist assumes that there are 2 people and 2 goods

question

economic models are

answer

but with assumptions

question

which of the following is not a factor of production: land labor capital money all are are factors of production

answer

money

question

points on the possibilities frontier are

answer

efficient

question

which of the following will not shift a country's production possibilites frontier outward? -an increase in the capital stock -an advance in technology -a reduction in unemployment -an increase in the labor force

answer

a reduction in unemployment

question

economic growth is depicted by

answer

a shift in the production possibilities frontier outward

question

IN TEXT BOOK PIC if the economy is operating at point C, the opportunity cost of addinng 15 units of bacon is

answer

20 units of eggs

question

IN TEXT BOOK PIC if the economy were operating at point E

answer

20 additional units of offs can be produced with no impact on bacon production

question

IN TEXT BOOK PIC point F represents

answer

a combination of production that can be reached if there is a sufficient advance in technology

question

IN TEXT BOOK PIC as we move from point A to D

answer

the opportunity cost of eggs in terms of bacon rises

question

which of the following issues is related to microeconomics? -the impact of money on inflation -the impact on technology on economic growth -the impact of the deficit on saving -the impact of oil prices on auto production

answer

the impact of oil prices on auto production

question

which of the following statements about microeconomics and macroeconomics is NOT true. chap 2

answer

the study of very large industries is a topic with in macroeconomics

question

which of the following statements is normative? -printing too much money causes inflation -people work harder if the wage is higher -the unemployment rate should be lower -large Gove deficits cause an economy to grow more slowly

answer

the unemployment rate should be lower

question

in making of which of the following statements is an economist acting more like a scientist? chap 2

answer

a reduction in unemployment benefits will reduce the uneployment rate

question

postitive statements are

answer

statements of description that can be tested

question

suppose 2 economists are arguing about polices that deal with unemployment. one economists says " the gove should fight unemployment bc it is the greatest social evil" the other responds "hogwash. inflation is the greatest social evil" these economists

answer

disagree bc they have 2 diff values

question

suppose 2 economists are arguing about prices that deal with unemployment. one economist says "the gove could lower unemployment by 1% point if they would just increase gove spending by 50 billion dollars" the other responds " hogwash. if the government spent an additional 50 billion dollars, it would reduce unemployment by 1/10th of 1%, and that effect would be only temporary" these economists

answer

disagree bc they have different scientfic judegments

question

absolute advantage

answer

the ability to produce a good using fewer inputs than another producer

question

comparative advantage

answer

the ability to produce a good at a lower opportunity cost than another producer

question

gains from trade

answer

the increase in total production due to specialization allowed by trade

question

imports

answer

goods produced abroad and sold domestically

question

exports

answer

goods produced domestically and sold abroad

question

if a nation has absolute advantage in the production of a good

answer

it can produce that good using fewer resources that its trading partner

question

if ta nation has a comparative advantage in the production of a good

answer

it can produce that good at a lower opportunity cost than its trading partner

question

which of the following statements about trade is true? chap 3

answer

trade can benefit everyone in society because it allows people to specialize in activities in which they have a comparative advantage

question

according to the principle of comparative advantage

answer

countries should specialize in the production of goods for which they have a lower opportunity cost of production that their trading partners

question

which of the following is true? chap 3

answer

a self-sufficient country at best can consume on its production possibilities frontier

question

suppose a country's workers can produce 4 watches per our or 12 rings per hour. if there is no trade

answer

the domestic price of 1 ring is 1/3 of a watch

question

suppose a country's workers can produce 4 wathes per hour or 12 rings per hour. if there is no trade

answer

the opportunity cost of 1 watch is 3 rings

question

LOOK AT TABLE which of the following statements about absolute advantage is true? chap 3

answer

australia has an absolute advantage in the production of both food and electronics

question

LOOK AT TABLE the opportunity cost of 1 unit of electronics in Australia is: CHAP 3

answer

4 units of food

question

LOOK AT TABLE the opportunity cost of 1 unit of electronics in Korea is: chap 3

answer

2 units of food

question

LOOK AT TABLE the opportunity cost of 1 unit of food in Australia is: chap 3

answer

1/4 of a unit of electronics

question

LOOK AT TABLE: which of the following statements is true about compartive advantage: chap 3

answer

austrailia has a comparative advantfe in the production of food while korea has a comparative advantage in the production of electronics

question

LOOK AT TABLE: Korea should: chap 3

answer

specialize in electronics production, export electronics, and import food

question

LOOK AT TABLE: prices of electronics can be stated in terms of units of food. what is the range of prices of electronics for which both countries could gain from trade?

answer

the price must be greater than 2 units of food but less than 4 units of food

question

suppose the world consisted of 2 countries, mexico and the US. furthermore suppose there are only 2 goods- food and clothing. which of the following statements are true? chap 3

answer

if the US has a comparative advantage in the production of food, then mexico must have the comparative advantage in clothing

question

LOOK AT CHART argentina has the comparative advantage in the production of

answer

beef

question

LOOK AT CHART peru will export

answer

fruit

question

LOOK AT CHART the opportunity cost of producing 1 metric ton of beef in peru is

answer

3 tons of fruit

question

joe is a tax accountant. He receives 100 per hour doing tax returns. He can type 10,000 charactres per hour into spreadsheets. he can hire an assistant who can type 2500 words per hour into spread sheets. which of the following statements is true? chap 3

answer

joe should hire the assistant as long as he pays the assistant less than 25 an hour

question

market

answer

a group of buyers and sellers of a particular good or sercice

question

competitive market

answer

a market in which there are many buyers and sellers so that each has a negligible impact on the market price

question

quantity demanded

answer

the amount of good that buyers are willing and able to purchase

question

law of demand

answer

the claim that, other things equal, the quantity demanded of a good falls when the price of a good rises

question

demand schedule

answer

a table that shows the relationship between a price of a food and the quantity demanded

question

demand curve

answer

a graph of the relationship between the price of a good and a the quantity demanded

question

normal good

answer

a good for which, other things equal, an increase in income leads to an increase in demand

question

inferior good

answer

a good for which, other things equal, an increase in income leads to a decrease in demand

question

substitutes

answer

2 goods for which an increase in the price of one leads to an increase in the demand for the other

question

complements

answer

2 goods for which an increase in the price of one leads to the decrease in the demand for the other

question

quantity supplied

answer

the amount of a good that sellers are willing nd able to sell

question

law of supply

answer

the claim that, other things equal, the quantity supplied of a good rises when the price of the good risess

question

supply schedule

answer

a table that shoes the relationship between the price of a good and the quantity demanded

question

supply curve

answer

a graph of the relationship between the price of a good and the quantity supplied

question

equilibrium

answer

a situation in which the rice has reached the level where quantity supplied equals quantity

question

equilibrium price

answer

the price that balances quantity supplied and quantity demanded

question

equilibrium quantity

answer

the quantity supplied and the quantity demanded at the equilibrium price

question

surplus

answer

a situation in which the quantity supplied is greater than quantity supplied

question

shortage

answer

a situation in which quantity demanded is greater than quantity supplied

question

law of supply and demand

answer

the claim that price of any good adjusts to bring the quantity supplied and the quantity demanded for that food into balance

question

a perfectly competitive market has

answer

many buyers and sellers

question

if an increase in the price of blue jean leafs to an increase in demand of tennis shoes, then blue jeans and tennis shoes are

answer

substitutes

question

the law of demand states that an increase in the price of a good

answer

decreases the quantity demanded for that good

question

if an increase in consumer incomes leads to a decrease in the demand for camping equipment, then equipment is

answer

an inferior good

question

a monopolistic market

answer

only one seller

question

which of the following shifts the demand for watches to the right? Chap 4

answer

a decrease in the price of watch batteries if watch batteries and watches are complements

question

all of the following shift the supply of watches to the right except: chap 4

answer

an increase in the price of watches

question

if the price of a good is above the equilibrium price

answer

there is a surplus and the price will fall

question

if the price of a good is below the equilibrium price

answer

there is a shortage and the price will rise

question

if the price of a good is equal to the equilibrium price

answer

the quantity demanded is equal to the quantity supplied and the price remains unchanged

question

an increase (rightward shift) in the demand for a good will tend to cause

answer

a increase in the equilibrium price and quantity

question

a decrease (leftward shift) un the supply for a good will tend to cause

answer

an increase in the equilibrium price and a decrease in the equilibrium quantity

question

suppose there is an increase in both the supply and demand for personal computers. in the market for personal computers, we would expect

answer

equilibrium quantity to rise and change in the equilibrium price to be ambiguous

question

suppose there is an increase in both the supply and demand for personal computers. furthermore, suppose the supply of personal computers increases more than demand for personal computers, in the market for personal computers, we would expect the

answer

equilibrium quantity to rise and equilibrium price to fall

question

which of the following statements is true about the impact of an increase in the price of lettuce? chap 4

answer

the equilibrium price and quantity of salad dressing will fall

question

suppose a frost destroys much of the florida orange crop. at the same time, suppose consumer tastes shift toward orange juice. what would we expect to happen to the equilibrium price and quantity in the market for orange juice? chap 4

answer

price will increase; quantity is ambiguous

question

suppose consumers tasts shift toward the consumption of apples. which of the following statements os am am accurate description of the impact of this event on the market for apples? chap 4

answer

there is an increase in the demand for apples and an increase in the quantity supplied for apples

question

suppose both buyers and sellers of wheat expect the price of wheat to rise in the near future. what would we expect to happen to the equilibrium price and quantity in the market for wheat today? chap 4

answer

price will increase; quantity is ambiguous

question

an inferior good is one for which an increase in incomes an

answer

decease in demand

question

elasticity

answer

a measure of the responsiveness of the quantity demanded or quantity supplied to a change in one of its determinants

question

price elasticity of demand

answer

a measure of how much the quantity demanded of a good responds to a change in the price of that good

question

elastic

answer

when the quantity demanded or supplied responds substantially to a change in one of its determinants

question

inelastic

answer

when the quantity demanded or supplied responds only slightly to a change in one of its determinants

question

total revenue

answer

the amount paid by buyers and received by sellers of a good computed as Q*P

question

income elasticity of demand

answer

a measure of how much the quantity demanded for a good responds to a change in consumers' income

question

cross price elasticity of demand

answer

a measure of how much the quantity demanded of one good responds to a change in the price of another good

question

price of elasticity of supply

answer

a measure of how much the quantity supplied of a good responds to a change in the price of that good

question

if a small percentage increase in the price of a good greatly reduces the quantity demanded for that good

answer

price elastic

question

the price elasticity of demand is defined as

answer

the percentage change in the quantity demanded of a good divided by the percentage change in the price of that good

question

in general, a flatter demand curve is more likely to be

answer

price elastic

question

in general a steeper supply curve is more likely to be

answer

price inelastic

question

which of the following would cause a demand curve for a goo to be inelastic? -there is a great number of substitutes for the good -the good is inferior -the good is a luxury - the good is a necessity

answer

the good is a necessity

question

the demand for which of the following is likely to be the most price in elastic? -airline tickets -bus tickets - taxi rides -transportation

answer

transportation

question

if the cross price elasticty between 2 goods is negative, the 2 goods are likely to be

answer

complements

question

if a supply curve for a good is price elastic, then

answer

the quantity supplied is sensitive to changes in the price of that good

question

if a fisherman must sell all of his daily catch before it spoils for whatever price he is offered, once the fish are caught, the fishermen's price elasticity of supply for fish is

answer

zero

question

a decrease in supply (shift to the left) will increase in that market if

answer

demand is inelastic

question

if an increase in the price of a good has no impact on the total revenue i that market, demand must be

answer

unit price elastic

question

if consumers always spend 15% of their income on food, then the income elasticity of demand for food is

answer

1.00

question

technological improvements in agriculture that shift the supply of agricultural commodities to the right tend to

answer

reduce total revenue to farmers as a whole because the demand for food is inelastic

question

if supply is price inelastic, the value of the price elasticity of supply must be

answer

less than 1

question

if there is excess captivity in a production facility, it is likely that the firm's supply curve is

answer

price elastic

question

IN TEXT chap 5 using the midpoint method for calculating the elasticity, what is the price elasticity of demand for cable television

answer

1.4

question

IN TEXT chap 5 at which of the following prices does does Small Town Cablevision earn the greatest total revenue?

answer

$30 per month

question

if a demand is linear (a straight line), then price elasticity of demand is

answer

elastic in the upper portion and inelastic in the lower portion

question

if the income elasticity of demand for a good is negative, it must be

answer

an inferior good

question

if consumers thing that there are very few substitutes for a good, then

answer

demand would tend to be price inelastic

question

price ceiling

answer

a legal maximum on the price at which a good can be sold

question

price floor

answer

a legal minimum on the price at which a good can be sold

question

tax incidence

answer

the manner in which the burden of a tax is shared among participants in a market

question

tax wedge

answer

the difference between what the buyer pays and the seller receives after tax has been imposed

question

for a price ceiling to be a binding constraint on the market, the government must set it

answer

below the equilibrium price

question

a binding price ceiling creates

answer

a shortage

question

suppose the equilibrium price for apartments is $500 per month and the government imposes rent controls of $250, which if the following is unlikely to occur as a result of the rent controls? chap 6

answer

the quality of the apartment will improve

question

a price floor

answer

sets a legal minimum on the proce at which a good can be sold

question

which of following statements about a binding price ceiling is true? chap 6

answer

the shortage created by the price ceiling is greater in the long run than in the short run

question

which side of the market is more likely to lobby government for a price floor? chap 6

answer

the sellers

question

the surplus caused by a binding price floor will be greatest if

answer

both supply and demand are elastic

question

which of the following is an example of price floor? chap 6

answer

the minimum wage

question

which of the following statements is trues if the government places a price ceiling on gas at $1.50 per gallon and the equilibrium price $1.00 per gallon? chap 6

answer

a significant increase in the demand for gasoline could cause the price ceiling to become a binding constraint

question

studies show that 10% increase in the minimum wage

answer

decrease teenage employment about 1 to 3 percent

question

within the supply and demand model, a tax collected form the buyers of a good shifts the

answer

demand curve downward by the size of the tax per unit

question

within the supply and demand model, a tax collected form the sellers of a good shifts the

answer

supply curve upward by the size of the tax per unit

question

which of the following takes place when a tax is placed on a good? chap 6

answer

an increase in the price buyers pay, a decrease in the price sellers receive, and a decrease in the quantity sold

question

when a tax is collected from the buyers in the market

answer

the tax burden on the buyers and sellers is the same as an equivalent tax collected from the sellers

question

a tax of $1.00 per gallon on gas

answer

places a tax wedge of $1.00 between the price the buyers pay and the price sellers receive

question

the burden of a tax falls more heavily on the sellers in a market when

answer

demand is elastic and supply is inelastic

question

a tax placed on a good that is a necessity for consumers will likely generate a tax burden that

answer

falls more heavily on buyers

question

the burden of a tax falls more heavily on the buyers in a market when

answer

demand is inelastic and supply is elastic

question

which of the following statements about the burden o f a tax is correct? chap 6

answer

the distribution of the burden of a tax is determined by the relative elasticities of supply and demand and is not determined by legislation

question

for which of the following products would the burden of a tax is likely fall more heavily on the sellers? -food -entertainment -clothing -housing

answer

entertainment

question

total cost

answer

the market value of the inputs a firm uses in production

question

profit

answer

total revenue minus total cost

question

explicit cost

answer

input costs that require on outlay of money by the firm

question

implicit costs

answer

input costs that do not require an outlay of money by the firm

question

economic profit

answer

total revenue minus total cost, including both explicit and implicit costs

question

accounting profit

answer

total revenue minus total cost

question

production function

answer

the relationship between quantity of inputs used to make a good and the quantity of output of that good

question

marginal product

answer

the increase in output that arises from an additional unit of input

question

diminisihing marginal product

answer

the property whereby the marginal product of an input declines as the quantity of input increases

question

fixed costs

answer

costs that do not vary with the quantity of output produced

question

variable costs

answer

costs that vary with the quantity of out put produced

question

average total cost

answer

total cost divided by the quantity of output

question

average fixed cost

answer

fixed costs divided by the quantity of output

question

average variable cost

answer

variable costs divided by the quantity of output

question

marginal cost

answer

the increase in total cost that arises from an extra unit of production

question

efficient scale

answer

the quantity of output that minimizes average total cost

question

economies of scale

answer

the property whereby long run average total cost falls as the quantity of out put increases

question

diseconomies of scale

answer

the property whereby long run average total cost rises as the quantity of output increases

question

constant returns to scale

answer

the property whereby long run average total cost stays the same as the quantity of out put changes

question

accounting profit is equal to total revenue minus

answer

explicit costs

question

economic profit is equal to total revenue minus

answer

the sum of implicit and explicit costs

question

IN TEXT BOOK the accounting profit at madelyns pottery factory is chap 13

answer

$75,000

question

IN TEXT BOOK the canonic profit at madelyns pottery factory is

answer

$30,000

question

if there are implicit costs of production

answer

accounting profit will exceed economic profit

question

if a production function exhibits diminishing marginal product its slope

answer

becomes flatter as the quantity of input increases

question

if a production function exhibits diminishing marginal product its slope of the corresponding total-cost curve

answer

becomes steeper as the quantity of out put increases

question

UES TABLE IN TEXT BOOK chap 13 the marginal product of labor as production moves from employing one worker to employing 2 workers is

answer

17

question

the production process described above exhibits

answer

diminishing marginal product of labor

question

which of the following is a variable cost in the short run? chap 13

answer

wages paid to factory labor

question

USE TABLE IN TEXT chap 13. the average fixed cost of producing 4 units is

answer

$2.50

question

USE TABLE IN TEXT chap 13 the average total cost of producing 3 units is

answer

$9.33

question

USE TABLE IN TEXT chap 13 the marginal cost of changing production from 3 units to 4 units is

answer

$8

question

USE TABLE IN TEXT chap 13

answer

4 units

question

when marginal costs are below average total costs

answer

average tottal costs are falling

question

if marginal costs equal average total costs

answer

average total costs are minimized

question

if as the quantity produced increases, production function first exhibits increasing marginal prodcut and later diminishing marginal product, the corresponding marginal-cost curve willl

answer

be U-shaped

question

in the long run, if a very small factory were to expand its scale of operations, it is likely that it would initially experience

answer

economies of scale

question

the efficient scale of production is the quantity of output that minimizes

answer

average total cost

question

which of the following statements is true? -all costs are fixed in the long run -all costs are variable in the long run -all costs are fixed in the short run -all costs are variable in the short run

answer

all costs are variable in the long run

question

price takers

answer

buyers and sellers in a competitive market that must accept the price that the market determine

question

average revenue

answer

total revenue divided by the quantity sold

question

marginal revenue

answer

the change in total revenue from an additional unit sold

question

shut down

answer

a short run decision to temporarlily cease production during a specific period of time due to current market conditions

question

exit

answer

a long run decision to permanently cease production and leave the market

question

sunk cost

answer

a cost to which one is already committed and is not recoverable

question

which of the following is not a characteristic of a competitive market? chap 14

answer

firms gernerate small but positive economic profits in the long run

question

which of the following markets would most closely satisfy the requirements for a competitve market? -gold bullion -electricity -cable television -soda -all of them

answer

gold bullion

question

if a competitive firm doubles its out put its total rev

answer

doubles

question

for a competitive firm, marginal rev is

answer

equal to the price of the good sold

question

the competitive firm maximizes profit when it prices out put up to the point whre

answer

marginal cost equals marginal rev

question

if a competitive firm is producing a level of output where marginal rev exceeds marginal cost the firm could increase its profits if it

answer

increase production

question

USE CHART IN BOOK chap 14 if the price is P4, a competitve firm will maximize profits if it produces

answer

Q3

question

USE CHART IN BOOK chap 14 if the price is P4 the firm will earn profits equal to the area

answer

(P4-P3) *Q3

question

USE CHART IN BOOK in the short run, competitive firms will temporarily shut down production if the price falls bellow

answer

P1

question

in the long run firms some competitive firms will exit the market if the price is below

answer

P2

question

in the long run the competitive equilibrium is

answer

P2,Q2

question

in the short run, the comptitive firm's supply curve is the

answer

portion of the marginal cost curve that lies above the average variable cost curve

question

in the long run, the competitive firm's supply curve is the

answer

portion of the marginal cost curve that lies above the average total cost curve

question

a grocery store should close at night if the

answer

variable costs of staying open are greater than the total revenue due to staying open

question

the long run market supply curve

answer

is always more elastic that the short run market supply curve

question

in the long run some firms will exit the market if the price of the good offered for sale is less than

answer

average total cost

question

if all firms in a market have identical cost structures and if inputs used in the production of the good in that market are readily avaliable, then the long run market supply curve for that good should be

answer

perfectly elastic

question

if the long run market supply curve for a good is perfectly elastic an increase in the demand for that good will in the long run cause

answer

an increase in the number of firms in the market but no increase in the price of that good

question

in long run equilibrium in a competitive market firms are operating at

answer

-the minimum of there average total cost curve -the intersection of marginal cost and marginal revenue -their efficient scale -zero economic profit

question

natural monopoly

answer

a monopoly that arises because a single firm can supply a good or service to an entire market at a smaller cost than could 2 or more firms

question

price discrimination

answer

the business practice of selling the same good at different prices to different customers

question

arbitrage

answer

the process of buying a good in one market at a low price and selling in another market at a higher price

question

perfect price discrimination

answer

a situation in which the monopolist is able to charge each customer precisely his willingness to pay

question

which of the fowling is not a barrier to entry in a monopolized market? chap 15

answer

a single firm is very large

question

a firm whose average total cost continually declines at least to he quantity that could supply the entire market is known as

answer

a natural monopoly

question

when a monopolist produces an additional unit, the marginal revenue generated by that unit must be

answer

below the price because the price effect outweighs the output effect

question

a monopolist maximizes profit by producing the quantity at which

answer

marginal rev = marginal cost

question

which if the following statements about price and marginal cost in a competitive and monopolized market is true? chap 15

answer

in competitive markets, price equals marginal cost in monopolized markets price exceeds marginal cost

question

south western is a monpolist in the production of this text book bc

answer

the gove has granted south western exculsive rights to produce this text book

question

USE CHART IN BOOK the profit maximizing monopolist will choose the price and quantity represented by? chap 15

answer

A

question

USE CHART IN BOOK the profit earned by the profit maximizing monopolist is represented by the area chap 15

answer

P4ACP1

question

USE CHART IN BOOK the deadweight loss associated with monopoly pricing is represented by the area chap 15

answer

ABD

question

USE CHART IN BOOK the efficient price and quantity are represented by point chap 15

answer

D

question

the inefficiency associated with monopoly is due to

answer

underproduction of the good

question

compared to a perfectly competitive market, a monopoly market will usually generate

answer

higher prices and lower output

question

the monopoly supply curve

answer

DOES NOT EXIST

question

using gove regulations to force a natural monopoly to charge a price equal to its marginal cost will

answer

cause the monopolist to exit the market

question

the purpose of an anti trust law is to

answer

increase competition in an industry by preventing mergers and breaking up large firms

question

public ownership of natural monopolies

answer

tends to be inefficient

question

which of the following statements about price discrimination is not true? chap 15

answer

perfect price discrimination generates dead weight loss

question

if regulators break up a natural monopoly into many smaller firms, the cost of production will

answer

rise

question

a monopoly is able to continue to gernerate economic profits in the long run because

answer

there is some barrier to entry in that market

question

if marginal revenue exceeds marginal cost a monopolist should

answer

increase output

ECON – Flashcard Answers

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards