Econ 101, section 3, F06 Schroeter Exam #4, Red. Choose the single best answer for each question.

Size: px
Start display at page:

Download "Econ 101, section 3, F06 Schroeter Exam #4, Red. Choose the single best answer for each question."

Transcription

1 Econ 101, section 3, F06 Schroeter Exam #4, Red Choose the single best answer for each question. 1. Profit is defined as a. net revenue minus depreciation. *. total revenue minus total cost. c. average revenue minus average total cost. d. marginal revenue minus marginal cost. 2. Jessica used to work as a high school teacher for \$45,000 per year but quit in order to start her own catering business. To buy the necessary equipment, she withdrew \$20,000 from her savings (which paid 3 percent interest). Last year she paid \$25,000 for ingredients and had revenue of \$60,000. For the year, her accounting profit was a. \$15,000 and her economic profit was \$25,000. b. \$14,400 and her economic profit was -\$10,000. c. \$59,400 and her economic profit was \$34,400. *. \$35,000 and her economic profit was -\$10, The marginal product of any input is the a. increase in expenditure on the input associated with a one-unit increase in production. b. change in total output resulting from a \$1.00 increase in expenditure on the input. c. change in total cost that occurs when employment of the input is increased by one unit. *. increase in total output obtained from a one unit increase in the input. 4. Holding fixed the employment levels of other inputs, a certain firm is able to produce 165 units of output per day when 15 workers are employed. When employment is 16 workers, the firm is able to produce 176 units of output per day. If the marginal product of labor is positive but diminishing, output with 14 workers would be *. fewer than 154 units of output per day. b. more than 154 but fewer than 165 units of output per day. c. more than 165 but fewer than 176 units of output per day. d. ny one of the above could be consistent with positive but diminishing marginal product of labor. 5. For a coffee shop owner, the cost of coffee beans is a cost and the cost of the shop's display ad in the Yellow Pages is a cost. a. fixed; fixed. b. fixed; variable. *. variable; fixed. d. variable; variable.

2 2 6. verage total cost is increasing with output whenever a. total cost is increasing with output. b. marginal cost is increasing with output. c. marginal cost is less than average total cost. *. none of the above. The following table provides some information on a short-run production function for a firm employing one fixed factor, "factory," and one variable factor, "labor." In particular, the table shows how output increases with labor employment for a given size of the factory. Suppose that the wage paid to workers is \$100/day. Use this information to answer questions 7, 8, and 9. Labor Output (workers/day) (widgets/day) t output of 140 widgets/day, the firm's average variable cost (to the nearest penny) is a. \$0.70/widget. *. \$1.43/widget. c. \$3.33/widget. d. impossible to determine without more information. 8. t output of 180 widgets/day, the firm's average total cost (to the nearest penny) is a. \$0.60/widget. b. \$1.67/widget. c. \$2.33/widget. *. impossible to determine without more information. 9. Over the output range from 140 to 180 widgets/day, the firm's marginal cost is approximately a. \$0.90/widget. b. \$1.67/widget. *. \$2.50/widget. d. \$3.60/widget. 10. If a firm in a perfectly competitive market increases the number of units sold by 50%, then its total revenue will a. increase by more than 50%. *. increase by 50%. c. increase by less than 50%. d. decrease.

3 3 11. competitive firm faces a price of \$10/unit for its product. It is currently operating where marginal cost is \$8/unit and average total cost is \$6/unit. To maximize profit (or minimize loss) in the short-run, the firm should *. increase output. b. shut down. c. decrease output but not shut down. d. impossible to determine without more information. 12. When price falls below the minimum of average variable cost, a profit-maximizing firm in a competitive market will a. continue to produce in order to pay off as much of fixed cost as possible. *. immediately stop production to minimize its losses. c. continue to produce in the short-run but will exit the market in the long run if conditions do not improve. d. stop production as soon as it is able to pay its sunk costs. 13. competitive firm faces a price of \$2.50/unit and produces 8000 units of output per day. t this output level, the firm's average total cost is \$2.15/unit. The firm's profit is *. \$2800/day. b. \$3500/day. c. \$3750/day. d. impossible to determine without more information. 14. When price is greater than marginal cost for a firm in a competitive market, a. marginal cost must be decreasing. b. the firm must be making positive economic profit. *. there is an opportunity to increase profit (or decrease loss) by increasing output. d. the firm would have to reduce its price in order to sell more output. 15. competitive industry is in long-run equilibrium. Then demand decreases. Which of the following is the most accurate description of the market's response to the demand shift? *. Price will fall in the short-run. Price will then rise to its original level in the long-run as some firms exit the industry. b. Price will fall in the short-run and remain at the new permanently lower level throughout the long-run. Some firms will exit the industry. c. Price will rise in the short-run. Entry of additional firms in the long-run will cause price to gradually return to its original level. d. Price will rise in the short-run. The number of firms will remain unchanged in the long-run but profits will increase. 16. When new firms have an incentive to enter a competitive market, their entry will a. drive up the price of the product. *. drive down profits of firms already in the market. c. shift the market supply curve to the left. d. increase demand for the product.

4 4 17. The benefit to society of patent and copyright laws is that they a. keep down the prices that can be charged for new products and copyrighted works. b. prevent a single firm or individual from acquiring ownership of a key resource. *. encourage creative activity. d. encourage the production of cheaper "generic" alternatives to brand-name products. 18. monopolist can sell 30 widgets/day when it charges a price of \$4.50/widget. In order to sell 31 widgets/day, the monopolist would have to reduce its price to \$4.45/widget. For this monopolist, the marginal revenue of the 31st widget is a. -\$2.95/widget. b. -\$0.05/widget. *. \$2.95/widget. d. \$4.45/widget. 19. t its current output level, a monopolist's price is \$4/unit, average total cost and marginal cost are both \$3/unit, and marginal revenue is \$2/unit. To maximize profit (or minimize loss) in the short-run, the monopolist should a. increase its output level. b. maintain its current output level. *. decrease its output level, but not shut down. d. not enough information given to determine the answer. 20. monopoly faces a downward-sloping demand for its product and an upward sloping marginal cost curve. If it were to produce and sell 100 units/day, its price and marginal cost would both equal \$2/unit and its average total cost would equal \$1/unit. Which of the following is true? a. 100 units per day is the profit-maximizing output level for this monopoly. b. To maximize profit, this monopoly should produce more than 100 units/day. *. This monopoly's maximum profit is greater than \$100/day. d. This monopoly could make more profit by charging a lower price. 21. profit maximizing monopoly charges a price of \$10/unit and sells 80 units/day with marginal cost equal to \$6/unit. The socially efficient output level would be 100 units/day. ssuming that the demand and marginal cost curves are straight lines, the deadweight loss associated with this monopoly is *. \$40/day. b. \$80/day. c. \$120/day. d. \$200/day.

6 6 27. There are only two firms, firm "" and firm "," producing widgets, a homogeneous product. Market demand is given by the formula: P = Q, where Q is total market quantity in widgets/day and P is price in \$/widget. Each firm has zero fixed cost and marginal cost that is constant at \$10/widget. If firm produces 60 widgets/day and firm produces 50 widgets/day, profit for firm ( π ) and profit for firm ( π ) will be: a. π = \$1680/day; b. π = \$980/day; π = \$1500/day. π = \$1000/day *. π = \$1080/day; π = \$900/day. d. π = \$1200/day; π = \$800/day. 28. In a homogeneous product oligopoly, two of the possible market outcomes are Nash equilibrium and the joint-profit-maximizing cartel outcome. The price in the Nash equilibrium will be than the cartel price and the quantity in the Nash equilibrium will be than the cartel quantity. a. higher; higher. b. higher; lower. *. lower; higher. d. lower; lower. 29. n agreement among firms regarding price and/or production levels is called a. an antitrust contract. b. a free-trade arrangement. *. collusion. d. a Nash bargaining solution. 30. In markets characterized by oligopoly, a. pursuit of self-interest by individual firms maximizes collective profits. *. collective profits are highest when the firms cooperate and behave like a monopoly. *. competition drives each firm's profit to zero. d. cartel arrangements, once in place, have a tendency to remain stable. (Credit given for either b or c.)

Learning Objectives. Chapter 6. Market Structures. Market Structures (cont.) The Two Extremes: Perfect Competition and Pure Monopoly

Chapter 6 The Two Extremes: Perfect Competition and Pure Monopoly Learning Objectives List the four characteristics of a perfectly competitive market. Describe how a perfect competitor makes the decision

Econ 201 Final Exam. Douglas, Fall 2007 Version A Special Codes 00000. PLEDGE: I have neither given nor received unauthorized help on this exam.

, Fall 2007 Version A Special Codes 00000 PLEDGE: I have neither given nor received unauthorized help on this exam. SIGNED: PRINT NAME: Econ 201 Final Exam 1. For a profit-maximizing monopolist, a. MR

Practice Questions Week 8 Day 1

Practice Questions Week 8 Day 1 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. The characteristics of a market that influence the behavior of market participants

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

Chap 13 Monopolistic Competition and Oligopoly These questions may include topics that were not covered in class and may not be on the exam. MULTIPLE CHOICE. Choose the one alternative that best completes

Econ 202 Exam 3 Practice Problems

Econ 202 Exam 3 Practice Problems Principles of Microeconomics Dr. Phillip Miller Multiple Choice Identify the choice that best completes the statement or answers the question. Chapter 13 Production and

Chapter 7 Monopoly, Oligopoly and Strategy

Chapter 7 Monopoly, Oligopoly and Strategy After reading Chapter 7, MONOPOLY, OLIGOPOLY AND STRATEGY, you should be able to: Define the characteristics of Monopoly and Oligopoly, and explain why the are

Chapter 6 Competitive Markets

Chapter 6 Competitive Markets After reading Chapter 6, COMPETITIVE MARKETS, you should be able to: List and explain the characteristics of Perfect Competition and Monopolistic Competition Explain why a

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

Economics 103 Spring 2012: Multiple choice review questions for final exam. Exam will cover chapters on perfect competition, monopoly, monopolistic competition and oligopoly up to the Nash equilibrium

Figure: Computing Monopoly Profit

Name: Date: 1. Most electric, gas, and water companies are examples of: A) unregulated monopolies. B) natural monopolies. C) restricted-input monopolies. D) sunk-cost monopolies. Use the following to answer

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

Test 2 Review Econ 201, V. Tremblay MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Barbara left a \$25,000 job as an architect to run a catering

LABOR UNIONS. Appendix. Key Concepts

Appendix LABOR UNION Key Concepts Market Power in the Labor Market A labor union is an organized group of workers that aims to increase wages and influence other job conditions. Craft union a group of

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. 1) The four-firm concentration ratio equals the percentage of the value of accounted for by the four

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

Chapter 11 Perfect Competition - Sample Questions MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Perfect competition is an industry with A) a

4. Market Structures. Learning Objectives 4-63. Market Structures

1. Supply and Demand: Introduction 3 2. Supply and Demand: Consumer Demand 33 3. Supply and Demand: Company Analysis 43 4. Market Structures 63 5. Key Formulas 81 2014 Allen Resources, Inc. All rights

Market Structure: Perfect Competition and Monopoly

WSG8 7/7/03 4:34 PM Page 113 8 Market Structure: Perfect Competition and Monopoly OVERVIEW One of the most important decisions made by a manager is how to price the firm s product. If the firm is a profit

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

MBA 640 Survey of Microeconomics Fall 2006, Quiz 6 Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A monopoly is best defined as a firm that

Chapter. Perfect Competition CHAPTER IN PERSPECTIVE

Perfect Competition Chapter 10 CHAPTER IN PERSPECTIVE In Chapter 10 we study perfect competition, the market that arises when the demand for a product is large relative to the output of a single producer.

Final Exam Economics 101 Fall 2003 Wallace Final Exam (Version 1) Answers 1. The marginal revenue product equals A) total revenue divided by total product (output). B) marginal revenue divided by marginal

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

Chapter 11 Monopoly practice Davidson spring2007 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A monopoly industry is characterized by 1) A)

Economics Chapter 7 Review

Name: Class: Date: ID: A Economics Chapter 7 Review Matching a. perfect competition e. imperfect competition b. efficiency f. price and output c. start-up costs g. technological barrier d. commodity h.

11 PERFECT COMPETITION. Chapter. Competition

Chapter 11 PERFECT COMPETITION Competition Topic: Perfect Competition 1) Perfect competition is an industry with A) a few firms producing identical goods B) a few firms producing goods that differ somewhat

Variable Cost. Marginal Cost. Average Variable Cost 0 \$50 \$50 \$0 -- -- -- -- 1 \$150 A B C D E F 2 G H I \$120 J K L 3 M N O P Q \$120 R

Class: Date: ID: A Principles Fall 2013 Midterm 3 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. Trevor s Tire Company produced and sold 500 tires. The

5. Suppose demand is perfectly elastic, and the supply of the good in question

ECON 1620 Basic Economics Principles 2010 2011 2 nd Semester Mid term test (1) : 40 multiple choice questions Time allowed : 60 minutes 1. When demand is inelastic the price elasticity of demand is (A)

Economics Chapter 7 Market Structures. Perfect competition is a in which a large number of all produce.

Economics Chapter 7 Market Structures Perfect competition is a in which a large number of all produce. There are Four Conditions for Perfect Competition: 1. 2. 3. 4. Barriers to Entry Factors that make

Chapter 7: Market Structures Section 1

Chapter 7: Market Structures Section 1 Key Terms perfect competition: a market structure in which a large number of firms all produce the same product and no single seller controls supply or prices commodity:

CHAPTER 10 MARKET POWER: MONOPOLY AND MONOPSONY

CHAPTER 10 MARKET POWER: MONOPOLY AND MONOPSONY EXERCISES 3. A monopolist firm faces a demand with constant elasticity of -.0. It has a constant marginal cost of \$0 per unit and sets a price to maximize

Managerial Economics & Business Strategy Chapter 8. Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Managerial Economics & Business Strategy Chapter 8 Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets I. Perfect Competition Overview Characteristics and profit outlook. Effect

Pre-Test Chapter 23 ed17

Pre-Test Chapter 23 ed17 Multiple Choice Questions 1. The kinked-demand curve model of oligopoly: A. assumes a firm's rivals will ignore a price cut but match a price increase. B. embodies the possibility

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

Econ 101, Section 1, F09, Schroeter Final Exam, Red Choose the single best answer for each question. Do all of your scratch work in the margins or in the blank space on the last page. 1. Pete receives

Chapter 8 Production Technology and Costs 8.1 Economic Costs and Economic Profit

Chapter 8 Production Technology and Costs 8.1 Economic Costs and Economic Profit 1) Accountants include costs as part of a firm's costs, while economists include costs. A) explicit; no explicit B) implicit;

Econ 101: Principles of Microeconomics

Econ 101: Principles of Microeconomics Chapter 16 - Monopolistic Competition and Product Differentiation Fall 2010 Herriges (ISU) Ch. 16 Monopolistic Competition Fall 2010 1 / 18 Outline 1 What is Monopolistic

Price competition with homogenous products: The Bertrand duopoly model [Simultaneous move price setting duopoly]

ECON9 (Spring 0) & 350 (Tutorial ) Chapter Monopolistic Competition and Oligopoly (Part ) Price competition with homogenous products: The Bertrand duopoly model [Simultaneous move price setting duopoly]

Oligopoly: How do firms behave when there are only a few competitors? These firms produce all or most of their industry s output.

Topic 8 Chapter 13 Oligopoly and Monopolistic Competition Econ 203 Topic 8 page 1 Oligopoly: How do firms behave when there are only a few competitors? These firms produce all or most of their industry

Profit Maximization. 2. product homogeneity

Perfectly Competitive Markets It is essentially a market in which there is enough competition that it doesn t make sense to identify your rivals. There are so many competitors that you cannot single out

Rutgers University Economics 102: Introductory Microeconomics Professor Altshuler Fall 2003

Rutgers University Economics 102: Introductory Microeconomics Professor Altshuler Fall 2003 Answers to Problem Set 11 Chapter 16 2. a. If there were many suppliers of diamonds, price would equal marginal

1 of 14 11/5/2013 4:33 PM

1 of 14 11/5/2013 4:33 PM Market power is A characteristic of all market structures. The ability to alter the market price of a product. Most common for competitive firms. Enjoyed by all firms at high

CHAPTER 12 MARKETS WITH MARKET POWER Microeconomics in Context (Goodwin, et al.), 2 nd Edition

CHAPTER 12 MARKETS WITH MARKET POWER Microeconomics in Context (Goodwin, et al.), 2 nd Edition Chapter Summary Now that you understand the model of a perfectly competitive market, this chapter complicates

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

Practice for Perfect Competition Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following is a defining characteristic of a

Economics 101 Final Exam. May 12, 2008. Instructions

Economics 101 Spring 2008 Professor Wallace Economics 101 Final Exam May 12, 2008 Instructions Do not open the exam until you are instructed to begin. You will need a #2 lead pencil. If you do not have

Chapter 6 MULTIPLE-CHOICE QUESTIONS

Chapter 6 MULTIPLE-CHOICE QUETION 1. Which one of the following is generally considered a characteristic of a perfectly competitive labor market? a. A few workers of varying skills and capabilities b.

ECON101 STUDY GUIDE 7 CHAPTER 14

ECON101 STUDY GUIDE 7 CHAPTER 14 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) An oligopoly firm is similar to a monopolistically competitive

BPE_MIC1 Microeconomics 1 Fall Semester 2011

Masaryk University - Brno Department of Economics Faculty of Economics and Administration BPE_MIC1 Microeconomics 1 Fall Semester 2011 Final Exam - 05.12.2011, 9:00-10:30 a.m. Test A Guidelines and Rules:

Practice Multiple Choice Questions Answers are bolded. Explanations to come soon!!

Practice Multiple Choice Questions Answers are bolded. Explanations to come soon!! For more, please visit: http://courses.missouristate.edu/reedolsen/courses/eco165/qeq.htm Market Equilibrium and Applications

Learning Objectives. After reading Chapter 11 and working the problems for Chapter 11 in the textbook and in this Workbook, you should be able to:

Learning Objectives After reading Chapter 11 and working the problems for Chapter 11 in the textbook and in this Workbook, you should be able to: Discuss three characteristics of perfectly competitive

12 Monopolistic Competition and Oligopoly

12 Monopolistic Competition and Oligopoly Read Pindyck and Rubinfeld (2012), Chapter 12 09/04/2015 CHAPTER 12 OUTLINE 12.1 Monopolistic Competition 12.2 Oligopoly 12.3 Price Competition 12.4 Competition

Monopoly WHY MONOPOLIES ARISE

In this chapter, look for the answers to these questions: Why do monopolies arise? Why is MR < P for a monopolist? How do monopolies choose their P and Q? How do monopolies affect society s well-being?

Thus MR(Q) = P (Q) Q P (Q 1) (Q 1) < P (Q) Q P (Q) (Q 1) = P (Q), since P (Q 1) > P (Q).

A monopolist s marginal revenue is always less than or equal to the price of the good. Marginal revenue is the amount of revenue the firm receives for each additional unit of output. It is the difference

CHAPTER 11: MONOPOLISTIC COMPETITION AND OLIGOPOLY

CHAPTER 11: MONOPOLISTIC COMPETITION AND OLIGOPOLY Introduction While perfect competition and monopoly represent the extremes of market structures, most American firms are found in the two market structures

MPP 801 Monopoly Kevin Wainwright Study Questions

MPP 801 Monopoly Kevin Wainwright Study Questions MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The marginal revenue facing a monopolist A) is

Monopolistic Competition

In this chapter, look for the answers to these questions: How is similar to perfect? How is it similar to monopoly? How do ally competitive firms choose price and? Do they earn economic profit? In what

Chapter 05 Perfect Competition, Monopoly, and Economic

Chapter 05 Perfect Competition, Monopoly, and Economic Multiple Choice Questions Use Figure 5.1 to answer questions 1-2: Figure 5.1 1. In Figure 5.1 above, what output would a perfect competitor produce?

Chapter 14 Monopoly. 14.1 Monopoly and How It Arises

Chapter 14 Monopoly 14.1 Monopoly and How It Arises 1) One of the requirements for a monopoly is that A) products are high priced. B) there are several close substitutes for the product. C) there is a

MONOPOLIES HOW ARE MONOPOLIES ACHIEVED?

Monopoly 18 The public, policy-makers, and economists are concerned with the power that monopoly industries have. In this chapter I discuss how monopolies behave and the case against monopolies. The case

A. a change in demand. B. a change in quantity demanded. C. a change in quantity supplied. D. unit elasticity. E. a change in average variable cost.

1. The supply of gasoline changes, causing the price of gasoline to change. The resulting movement from one point to another along the demand curve for gasoline is called A. a change in demand. B. a change

Chapter 13 Controlling Market Power: Antitrust and Regulation

Page 1 Chapter 13 Controlling Market Power: Antitrust and Regulation 1)Which of the following is an example of natural monopoly? A) a market for cable TV services B) a market for breakfast cereals C) a

At the end of Chapter 18, you should be able to answer the following:

1 How to Study for Chapter 18 Pure Monopoly Chapter 18 considers the opposite of perfect competition --- pure monopoly. 1. Begin by looking over the Objectives listed below. This will tell you the main

Chapter 8. Competitive Firms and Markets

Chapter 8. Competitive Firms and Markets We have learned the production function and cost function, the question now is: how much to produce such that firm can maximize his profit? To solve this question,

Microeconomics. Lecture Outline. Claudia Vogel. Winter Term 2009/2010. Part III Market Structure and Competitive Strategy

Microeconomics Claudia Vogel EUV Winter Term 2009/2010 Claudia Vogel (EUV) Microeconomics Winter Term 2009/2010 1 / 25 Lecture Outline Part III Market Structure and Competitive Strategy 12 Monopolistic

Oligopoly. Oligopoly is a market structure in which the number of sellers is small.

Oligopoly Oligopoly is a market structure in which the number of sellers is small. Oligopoly requires strategic thinking, unlike perfect competition, monopoly, and monopolistic competition. Under perfect

CHAPTER 9: PURE COMPETITION

CHAPTER 9: PURE COMPETITION Introduction In Chapters 9-11, we reach the heart of microeconomics, the concepts which comprise more than a quarter of the AP microeconomics exam. With a fuller understanding

Common in European countries government runs telephone, water, electric companies.

Public ownership Common in European countries government runs telephone, water, electric companies. US: Postal service. Because delivery of mail seems to be natural monopoly. Private ownership incentive

Oligopoly and Strategic Pricing

R.E.Marks 1998 Oligopoly 1 R.E.Marks 1998 Oligopoly Oligopoly and Strategic Pricing In this section we consider how firms compete when there are few sellers an oligopolistic market (from the Greek). Small

Understanding Economics 2nd edition by Mark Lovewell and Khoa Nguyen

Understanding Economics 2nd edition by Mark Lovewell and Khoa Nguyen Chapter 5 Perfect Competition Chapter Objectives! In this chapter you will: " Consider the four market structures, and the main differences

Chapter 14 Monopoly. 14.1 Monopoly and How It Arises

Chapter 14 Monopoly 14.1 Monopoly and How It Arises 1) A major characteristic of monopoly is A) a single seller of a product. B) multiple sellers of a product. C) two sellers of a product. D) a few sellers

1. Supply and demand are the most important concepts in economics.

Page 1 1. Supply and demand are the most important concepts in economics. 2. Markets and Competition a. Market is a group of buyers and sellers of a particular good or service. P. 66. b. These individuals

Pre-Test Chapter 25 ed17

Pre-Test Chapter 25 ed17 Multiple Choice Questions 1. Refer to the above graph. An increase in the quantity of labor demanded (as distinct from an increase in demand) is shown by the: A. shift from labor

Practice Questions Week 6 Day 1

Practice Questions Week 6 Day 1 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. Economists assume that the goal of the firm is to a. maximize total revenue

Economics II: Micro Fall 2009 Exercise session 5. Market with a sole supplier is Monopolistic.

Economics II: Micro Fall 009 Exercise session 5 VŠE 1 Review Optimal production: Independent of the level of market concentration, optimal level of production is where MR = MC. Monopoly: Market with a

CHAPTER 6 MARKET STRUCTURE

CHAPTER 6 MARKET STRUCTURE CHAPTER SUMMARY This chapter presents an economic analysis of market structure. It starts with perfect competition as a benchmark. Potential barriers to entry, that might limit

chapter Perfect Competition and the >> Supply Curve Section 3: The Industry Supply Curve

chapter 9 The industry supply curve shows the relationship between the price of a good and the total output of the industry as a whole. Perfect Competition and the >> Supply Curve Section 3: The Industry

ECON 103, 2008-2 ANSWERS TO HOME WORK ASSIGNMENTS

ECON 103, 2008-2 ANSWERS TO HOME WORK ASSIGNMENTS Due the Week of June 23 Chapter 8 WRITE [4] Use the demand schedule that follows to calculate total revenue and marginal revenue at each quantity. Plot

Chapter 04 Firm Production, Cost, and Revenue

Chapter 04 Firm Production, Cost, and Revenue Multiple Choice Questions 1. A key assumption about the way firms behave is that they a. Minimize costs B. Maximize profit c. Maximize market share d. Maximize

CHAPTER 11 PRICE AND OUTPUT IN MONOPOLY, MONOPOLISTIC COMPETITION, AND PERFECT COMPETITION

CHAPTER 11 PRICE AND OUTPUT IN MONOPOLY, MONOPOLISTIC COMPETITION, AND PERFECT COMPETITION Chapter in a Nutshell Now that we understand the characteristics of different market structures, we ask the question

Chapter 7: Market Structures Section 3

Chapter 7: Market Structures Section 3 Objectives 1. Describe characteristics and give examples of monopolistic competition. 2. Explain how firms compete without lowering prices. 3. Understand how firms

Final Exam 15 December 2006

Eco 301 Name Final Exam 15 December 2006 120 points. Please write all answers in ink. You may use pencil and a straight edge to draw graphs. Allocate your time efficiently. Part 1 (10 points each) 1. As

PART A: For each worker, determine that worker's marginal product of labor.

ECON 3310 Homework #4 - Solutions 1: Suppose the following indicates how many units of output y you can produce per hour with different levels of labor input (given your current factory capacity): PART

An increase in the number of students attending college. shifts to the left. An increase in the wage rate of refinery workers.

1. Which of the following would shift the demand curve for new textbooks to the right? a. A fall in the price of paper used in publishing texts. b. A fall in the price of equivalent used text books. c.

Business Ethics Concepts & Cases Manuel G. Velasquez Chapter Four Ethics in the Marketplace Definition of Market A forum in which people come together to exchange ownership of goods; a place where goods

Economics 100 Exam 2

Name: 1. During the long run: Economics 100 Exam 2 A. Output is limited because of the law of diminishing returns B. The scale of operations cannot be changed C. The firm must decide how to use the current

b. Cost of Any Action is measure in foregone opportunities c.,marginal costs and benefits in decision making

1 Economics 130-Windward Community College Review Sheet for the Final Exam This final exam is comprehensive in nature and in scope. The test will be divided into two parts: a multiple-choice section and

Chapter 12 Monopolistic Competition and Oligopoly

Chapter Monopolistic Competition and Oligopoly Review Questions. What are the characteristics of a monopolistically competitive market? What happens to the equilibrium price and quantity in such a market

D) Marginal revenue is the rate at which total revenue changes with respect to changes in output.

Ch. 9 1. Which of the following is not an assumption of a perfectly competitive market? A) Fragmented industry B) Differentiated product C) Perfect information D) Equal access to resources 2. Which of

Econ 201 Lecture 17. The marginal benefit of expanding output by one unit is the market price. Marginal cost of producing corn

Econ 201 Lecture 17 The Perfectly Competitive Firm Is a Taker (Recap) The perfectly competitive firm has no influence over the market price. It can sell as many units as it wishes at that price. Typically,

Economics Instructor Miller Oligopoly Practice Problems

Economics Instructor Miller Oligopoly Practice Problems 1. An oligopolistic industry is characterized by all of the following except A) existence of entry barriers. B) the possibility of reaping long run

13 MONOPOLISTIC COMPETITION AND OLIGOPOLY. Chapter. Key Concepts

Chapter 13 MONOPOLISTIC COMPETITION AND OLIGOPOLY Key Concepts Monopolistic Competition The market structure of most industries lies between the extremes of perfect competition and monopoly. Monopolistic

Chapter 9: Perfect Competition

Chapter 9: Perfect Competition Perfect Competition Law of One Price Short-Run Equilibrium Long-Run Equilibrium Maximize Profit Market Equilibrium Constant- Cost Industry Increasing- Cost Industry Decreasing-

AP Microeconomics 2003 Scoring Guidelines

AP Microeconomics 2003 Scoring Guidelines The materials included in these files are intended for use by AP teachers for course and exam preparation; permission for any other use must be sought from the

ANSWERS TO END-OF-CHAPTER QUESTIONS 23-1 Briefly indicate the basic characteristics of pure competition, pure monopoly, monopolistic competition, and oligopoly. Under which of these market classifications

Chapter 15: Monopoly WHY MONOPOLIES ARISE HOW MONOPOLIES MAKE PRODUCTION AND PRICING DECISIONS

Chapter 15: While a competitive firm is a taker, a monopoly firm is a maker. A firm is considered a monopoly if... it is the sole seller of its product. its product does not have close substitutes. The

Market Structure: Duopoly and Oligopoly

WSG10 7/7/03 4:24 PM Page 145 10 Market Structure: Duopoly and Oligopoly OVERVIEW An oligopoly is an industry comprising a few firms. A duopoly, which is a special case of oligopoly, is an industry consisting

CHAPTER 13 MARKETS FOR LABOR Microeconomics in Context (Goodwin, et al.), 2 nd Edition

CHAPTER 13 MARKETS FOR LABOR Microeconomics in Context (Goodwin, et al.), 2 nd Edition Chapter Summary This chapter deals with supply and demand for labor. You will learn about why the supply curve for

Principles of Economics: Micro: Exam #2: Chapters 1-10 Page 1 of 9

Principles of Economics: Micro: Exam #2: Chapters 1-10 Page 1 of 9 print name on the line above as your signature INSTRUCTIONS: 1. This Exam #2 must be completed within the allocated time (i.e., between

Equilibrium of a firm under perfect competition in the short-run. A firm is under equilibrium at that point where it maximizes its profits.

Equilibrium of a firm under perfect competition in the short-run. A firm is under equilibrium at that point where it maximizes its profits. Profit depends upon two factors Revenue Structure Cost Structure

Microeconomics Instructor Miller Practice Problems Labor Market

Microeconomics Instructor Miller Practice Problems Labor Market 1. What is a factor market? A) It is a market where financial instruments are traded. B) It is a market where stocks and bonds are traded.

Monopoly and Monopsony Labor Market Behavior

Monopoly and Monopsony abor Market Behavior 1 Introduction For the purposes of this handout, let s assume that firms operate in just two markets: the market for their product where they are a seller) and

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

MBA 640, Survey of Microeconomics, Quiz #4 Fall 2006 Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) In the short run, A) there are no variable

Chapter 13 Oligopoly 1

Chapter 13 Oligopoly 1 4. Oligopoly A market structure with a small number of firms (usually big) Oligopolists know each other: Strategic interaction: actions of one firm will trigger re-actions of others