NAME: INTERMEDIATE MICROECONOMIC THEORY SPRING 2008 ECONOMICS 300/010 & 011 Midterm II April 30, 2008


 Osborne Weaver
 1 years ago
 Views:
Transcription
1 NAME: INTERMEDIATE MICROECONOMIC THEORY SPRING 2008 ECONOMICS 300/010 & 011 Section I: Multiple Choice (4 points each) Identify the choice that best completes the statement or answers the question. 1. For a linear demand curve a. the price elasticity of demand is constant for all values of P and Q. b. the price elasticity of demand decreases (becomes more negative) as Q increases and P decreases. c. the price elasticity of demand increases (becomes less negative) as Q increases and P decreases. 2. If goods X and Y are substitutes, then the cross price elasticity of demand between them will be a. positive. c. zero. b. negative. d. infinity. 3. A firm s marginal rate of technical substitution (MRTS) is represented graphically by a. the slope of the line connecting the origin with the relevant point on the isoquant. b. the negative of the slope of the line connecting the origin with the relevant point on the isoquant. c. the slope of the isoquant at the relevant point. d. the negative of the slope of the isoquant at the relevant point. 4. The production function q = a. exhibits constant returns to scale and constant marginal productivities for K and L. b. exhibits diminishing returns to scale and diminishing marginal productivities for K and L. c. exhibits constant returns to scale and diminishing marginal productivities for K and L. d. exhibits diminishing returns to scale and constant marginal productivities for K and L. 5. On an isoquantisocost twoinput model you can tell that a nonoptimal shortrun production decision is being made because a. all decisions in the short run are nonoptimal b. the rate of technical substitution is equal to the ratio of the input prices c. the rate of technical substitution is not equal to the ratio of the input prices 6. Suppose pigs (G) can be fed cornbased feed (C) or soybeanbased feed (S) such that the production function is G = 2C + S. If the price of corn feed is $4 and the price of soybean feed is $5, what is the cost minimizing combination of producing G = 200? a. C = 100 c. C = 50, S = 100 b. S = 200 d. C = 75, S = 50
2 7. The opportunity cost of producing a bicycle refers to a. the outofpocket payments made to produce the bicycle. b. the value of the goods that were given up to produce the bicycle. c. the bicycle s retail price. d. the marginal cost of the last bicycle produced. 8. The firm s expansion path records a. profitmaximizing output choices for every possible price. b. costminimizing input choices for all possible output levels for when input rental rates expand along with production. c. costminimizing input choices for all possible output levels for a fixed set of input prices. d. costminimizing input choices for profitmaximizing output levels. 9. Suppose that a futon manufacturer is currently producing 5,000 futons. At this level of output, the MP L = 100 and MP K = 250. The rental rate on capital is $25, and the wage rate is $5. The manufacturer a. is currently minimizing the cost of producing 5,000 futons per month. b. can reduce the cost of producing 5,000 futons by using more labor and less capital. c. can reduce the cost of producing 5,000 futons by using less labor and more capital. 10. In the long run a. all inputs are fixed. c. some inputs are fixed. b. all inputs are variable. d. production levels never change. 11. For a constant returns to scale production function a. marginal costs are constant but the average cost curve has a Ushape. b. both average and marginal costs are constant. c. marginal cost has a Ushape; average costs are constant. d. both average and marginal cost curves are Ushaped. 12. Technical progress will a. shift a firm s production function and its related cost curves. b. not affect the production function, but may shift cost curves. c. shift a firm s production function and alter its marginal revenue curve. d. shift a firm s production function and cause more capital (and less labor) to be hired. 13. A firm s marginal revenue is defined as a. the ratio of total revenue to total quantity produced. b. the additional output produced by lowering price. c. the additional revenue received due to technical innovation. d. the additional revenue received when selling one more unit of output. Page 2 of 6
3 14. In order to maximize profits, a firm should produce at the output level for which a. average cost is minimized. b. marginal revenue equals marginal cost. c. marginal cost is minimized. d. price minus average cost is as large as possible. 15. If a 1.0 percent increase in price leads to a 0.7 percent increase in quantity supplied, the shortrun supply curve is a. elastic. c. unit elastic. b. inelastic. d. perfectly inelastic. Page 3 of 6
4 Section II: Essay Problems Give clear, wellwritten answers to the questions below. Use graphs if appropriate. Please make sure your graphs are legible and label all parts of the graph (e.g., axes, lines, etc.). You will not receive full credit if the graphs are illegible. 1. (15 points) Assume that a pricetaking firm in the corn industry has typical Ushaped average total cost and average variable cost curves in the shortrun. Assume that the minimum of the average total cost curve is $35 at 50 bushels of corn, and assume that the minimum of the average variable cost curve is $20 at 30 bushels of corn. a. Draw a diagram including the shortrun marginal cost, average total cost, and average variable cost curve for this firm. b. Assume that the market price is $28. Will the firm produce positive output? If so, will the shortrun profits of this firm be positive, negative, or zero? Explain your answer. c. Graph the shortrun supply curve for your firm. Page 4 of 6
5 2. (25 points) Assume that a firm has the following production function: q = f(k,l). Suppose that the marginal cost of producing output, q, in the shortrun for this competitive firm is MC(q) = 0.4q + 2. The market price of the firm s product is $10. a. What level of output will the firm produce? b. Assume that the firm s fixed costs are $30, and the firm s average variable cost is given by AVC(q) = 0.2q + 2. What is the shortrun total cost equation for this firm? c. Below what price will the firm shut down in the short run? d. What are the shortrun profits for the firm? e. Show the level of profits in a graph, including the relevant revenue and cost curves. Page 5 of 6
6 Page 6 of 6
CHAPTER 7 THE COST OF PRODUCTION
CHAPTER 7 THE COST OF PRODUCTION EXERCISES 1. Assume a computer firm s marginal costs of production are constant at $1,000 per computer. However, the fixed costs of production are equal to $10,000. a.
More informationLabor Demand. Labor Economics VSE Praha March 2009
Labor Demand Labor Economics VSE Praha March 2009 Labor Economics: Outline Labor Supply Labor Demand Equilibrium in Labor Market et cetera Labor Demand Model: Firms Firm s role in: Labor Market consumes
More informationMULTIPLE 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) Perfect competition occurs in a market where there are A) a few firms producing goods which differ
More informationA. 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
More informationor, put slightly differently, the profit maximizing condition is for marginal revenue to equal marginal cost:
Chapter 9 Lecture Notes 1 Economics 35: Intermediate Microeconomics Notes and Sample Questions Chapter 9: Profit Maximization Profit Maximization The basic assumption here is that firms are profit maximizing.
More informationA firm in a competitive market has fixed costs of 20 and the following marginal costs for item #N: Item #
Microeconom ics m odule 11: m arginal costs, value, and revenue (practice problem s) ** Exercise 11.1: Shutdown Price A firm in a competitive market has fixed costs of 0 and e following marginal costs
More informationOnline Review Copy. AP Micro Chapter 8 Test. Multiple Choice Identify the choice that best completes the statement or answers the question.
AP Micro Chapter 8 Test Multiple Choice Identify the choice that best completes the statement or answers the question. 1. There would be some control over price within rather narrow limits in which market
More informationMicroeconomics Instructor Miller Perfect Competition Practice Problems
Microeconomics Instructor Miller Perfect Competition Practice Problems 1. Perfect competition is characterized by all of the following except A) heavy advertising by individual sellers. B) homogeneous
More informationNumber of Workers Number of Chairs 1 10 2 18 3 24 4 28 5 30 6 28 7 25
Intermediate Microeconomics Economics 435/735 Fall 0 Answers for Practice Problem Set, Chapters 68 Chapter 6. Suppose a chair manufacturer is producing in the short run (with its existing plant and euipment).
More informationMULTIPLE 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
More informationAn 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.
More informationMICROECONOMICS AND POLICY ANALYSIS  U8213 Professor Rajeev H. Dehejia Class Notes  Spring 2001
MICROECONOMICS AND POLICY ANALYSIS  U8213 Professor Rajeev H. Dehejia Class Notes  Spring 2001 General Equilibrium and welfare with production Wednesday, January 24 th and Monday, January 29 th Reading:
More informationChapter 13 Perfect Competition and the Supply Curve
Goldwasser AP Microeconomics Chapter 13 Perfect Competition and the Supply Curve BEFORE YOU READ THE CHAPTER Summary This chapter develops the model of perfect competition and then uses this model to discuss
More information1 st Exam. 7. Cindy's crossprice elasticity of magazine demand with respect to the price of books is
1 st Exam 1. Marginal utility measures: A) the total utility of all your consumption B) the total utility divided by the price of the good C) the increase in utility from consuming one additional unit
More informationMERSİN UNIVERSITY FACULTY OF ECONOMICS AND ADMINISTRATIVE SCİENCES DEPARTMENT OF ECONOMICS MICROECONOMICS MIDTERM EXAM DATE 18.11.
MERSİN UNIVERSITY FACULTY OF ECONOMICS AND ADMINISTRATIVE SCİENCES DEPARTMENT OF ECONOMICS MICROECONOMICS MIDTERM EXAM DATE 18.11.2011 TİIE 12:30 STUDENT NAME AND NUMBER MULTIPLE CHOICE. Choose the one
More informationSample Exam According to Figure 6.1, A. Soup is a normal good C. Soup is a Giffen good B. Soup is an inferior good D. Bread is an inferior good
Sample Exam 2 1. Suppose the base year for a Lespeyres index is 2001. The value of the index is 1.3 in 2004 and 1.6 in 2006. By how much did the cost of the bundle increase between 2004 and 2006? A..3%
More informationChapter 9: Perfect Competition
Chapter 9: Perfect Competition Perfect Competition Law of One Price ShortRun Equilibrium LongRun Equilibrium Maximize Profit Market Equilibrium Constant Cost Industry Increasing Cost Industry Decreasing
More informationProfit Maximization. PowerPoint Slides prepared by: Andreea CHIRITESCU Eastern Illinois University
Profit Maximization PowerPoint Slides prepared by: Andreea CHIRITESCU Eastern Illinois University 1 The Nature and Behavior of Firms A firm An association of individuals Firms Who have organized themselves
More informationChapter 7 Production Costs
Chapter 7 Production s MULTIPLE CHOICE Exhibit 1 Production of pizza data Workers Pizzas 1 4 2 1 3 15 4 18 5 19 Exhibit 1 shows the change in the production of pizzas as more workers are hired. The marginal
More informationRutgers University Economics 102: Introductory Microeconomics Professor Altshuler Fall 2003
Rutgers University Economics 102: Introductory Microeconomics Professor Altshuler Fall 2003 Answers to Problem Set 10 Chapter 15 1. The following table shows revenue, costs, and profits, where quantities
More informationPreTest Chapter 25 ed17
PreTest 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
More informationUnit 3 Practice Exam Answer the questions on a separate sheet of paperplease do not write on this practice test.
Unit 3 Practice Exam Answer the questions on a separate sheet of paperplease do not write on this practice test. 1. Which of the following items is most likely to be an implicit cost of production? a.
More informationChapter 5 The Production Process and Costs
Managerial Economics & Business Strategy Chapter 5 The Production Process and Costs McGrawHill/Irwin Copyright 2010 by the McGrawHill Companies, Inc. All rights reserved. Overview I. Production Analysis
More information8. Average product reaches a maximum when labor equals A) 100 B) 200 C) 300 D) 400
Ch. 6 1. The production function represents A) the quantity of inputs necessary to produce a given level of output. B) the various recipes for producing a given level of output. C) the minimum amounts
More informationMicroeconomics Instructor Miller Practice Problems Monopolistic Competition
Microeconomics Instructor Miller Practice Problems Monopolistic Competition 1. A monopolistically competitive market is described as one in which there are A) a few firms producing an identical product.
More informationMicroeconomics 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.
More informationRecitation #5 Week 02/08/2009 to 02/14/2009. Chapter 6  Elasticity
Recitation #5 Week 02/08/2009 to 02/14/2009 Chapter 6  Elasticity 1. This problem explores the midpoint method of calculating percentages and why this method is the preferred method when calculating price
More informationMULTIPLE 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) Firms that survive in the long run are usually those that A) remain small. B) strive for the largest
More informationProblem Set Chapter 6 Solutions
Problem Set Chapter 6 Solutions. Ch 6, Problem 6. A firm uses the inputs of fertilizer, labor, and hothouses to produce roses. Suppose that when the quantity of labor and hothouses is fixed, the relationship
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
MPP 801 Perfect Competition K. Wainwright Study Questions MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Refer to Figure 91. If the price a perfectly
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question on the accompanying scantron.
Principles of Microeconomics, Quiz #5 Fall 2007 Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question on the accompanying scantron. 1) Perfect competition
More informationI. Output Decisions by Firms
University of PacificEconomics 53 Lecture Notes #8B I. Output Decisions by Firms Now that we have examined firm costs in great detail, we can now turn to the question of how firms decide how much output
More informationChapter 8: Theory of Cost
Chapter 8: Theory of Input s Classification Minimization Shifts in Curves Explicit and Implicit s Fixed and Variable s Profit Long Run Short Run Input Price Change New Technologies Positive Feedback Normal
More informationChapter. 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.
More informationCHAPTER 8 PROFIT MAXIMIZATION AND COMPETITIVE SUPPLY
CHAPTER 8 PROFIT MAXIMIZATION AND COMPETITIVE SUPPLY REVIEW QUESTIONS 1. Why would a firm that incurs losses choose to produce rather than shut down? Losses occur when revenues do not cover total costs.
More informationAgenda. Productivity, Output, and Employment, Part 1. The Production Function. The Production Function. The Production Function. The Demand for Labor
Agenda Productivity, Output, and Employment, Part 1 31 32 A production function shows how businesses transform factors of production into output of goods and services through the applications of technology.
More informationProblem Set 5 Answers. A grocery shop is owned by Mr. Moore and has the following statement of revenues and costs:
Problem Set 5 Ansers 1. Ch 7, Problem 7. A grocery shop is oned by Mr. Moore and has the folloing statement of revenues and costs: Revenues $5, Supplies $5, Electricity $6, Employee salaries $75, Mr. Moore
More informationManagerial 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
More informationEconS 301 Review Session #8 Chapter 11: Monopoly and Monopsony
EconS 301 Review Session #8 Chapter 11: Monopoly and Monopsony 1. Which of the following describes a correct relation between price elasticity of demand and a monopolist s marginal revenue when inverse
More informationMARKETS WITHOUT POWER Microeconomics in Context (Goodwin, et al.), 3 rd Edition
Chapter 16 MARKETS WITHOUT POWER Microeconomics in Context (Goodwin, et al.), 3 rd Edition Chapter Summary This chapter presents the traditional, idealized model of perfect competition. In it, you will
More informationSpring 2008. Please write your name below, but do not open exam until told to do so! Name:
Intermediate Microeconomics Spring 2008 Prof. David Bjerk Midterm 2 Make sure your answers are legible. If you need more room, use back of page. For questions that ask for explanations, both a correct
More informationExam 1. Corn (bushels)
ECONOMICS 10008 Dr. John Stewart Feb. 13, 2001 Exam 1 Instructions: Mark the letter for your chosen answer for each question on the computer readable answer sheet using a No.2 pencil. Please note that
More informationMonopoly. Problem 1 (APT 93, P3) Sample answer:
Monopoly Problem 1 (APT 93, P3) A single airline provides service from City A to City B. a) Explain how the airline will determine the number of passengers it will carry and the price it will charge. b)
More informationAP Microeconomics. Practice Exam. Advanced Placement Program
Advanced Placement Program AP Microeconomics Practice Exam The questions contained in this AP Microeconomics Practice Exam are written to the content specifications of AP Exams for this subject. Taking
More informationEcon 100B: Macroeconomic Analysis Fall Problem Set #3 ANSWERS (Due September 1516, 2008)
Econ 100B: Macroeconomic Analysis Fall 2008 Problem Set #3 ANSWERS (Due September 1516, 2008) A. On one side of a single sheet of paper: 1. Clearly and accurately draw and label a diagram of the Production
More information14.01 Principles of Microeconomics, Fall 2007 ChiaHui Chen October 15, 2007. Lecture 13. Cost Function
ShortRun Cost Function. Principles of Microeconomics, Fall ChiaHui Chen October, ecture Cost Functions Outline. Chap : ShortRun Cost Function. Chap : ongrun Cost Function Cost Function et w be the
More informationMicroeconomics Required Graphs and Terms
Microeconomics Required Graphs and Terms Understanding and explaining the economic concepts required by the AP and IB exams rests on a solid knowledge of fundamental economic graphs and terms. In order
More informationA) In this situation, the production function exhibits both diminishing returns to labor and constant returns to scale. Explain why.
Problems for Unit 1, ECON 3357, Fall 2012, Darren Grant. Brief answers are provided below. The tutors await your visit to work on these problems, and I will discuss one or two in class before they are
More informationProfit 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
More informationLecture 6 Part I. Markets without market power: Perfect competition
Lecture 6 Part I Markets without market power: Perfect competition Market power Market power: Ability to control, or at least affect, the terms and conditions of the exchanges in which one participates
More information11 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
More informationMarket for cream: P 1 P 2 D 1 D 2 Q 2 Q 1. Individual firm: W Market for labor: W, S MRP w 1 w 2 D 1 D 1 D 2 D 2
Factor Markets Problem 1 (APT 93, P2) Two goods, coffee and cream, are complements. Due to a natural disaster in Brazil that drastically reduces the supply of coffee in the world market the price of coffee
More informationChapter 14. Markets for Factor Inputs
Chapter 14 Markets for Factor Inputs Competitive Factor Markets Characteristics 1. Large number of sellers of the factor of production 2. Large number of buyers of the factor of production 3. The buyers
More informationSHORTRUN PRODUCTION
TRUE OR FALSE STATEMENTS SHORTRUN PRODUCTION 1. According to the law of diminishing returns, additional units of the labour input increase the total output at a constantly slower rate. 2. In the shortrun
More informationChapter 13 Perfect Competition
Chapter 13 Perfect Competition 13.1 A Firm's ProfitMaximizing Choices 1) What is the difference between perfect competition and monopolistic competition? A) Perfect competition has a large number of small
More informationChapter 4: Elasticity. Monday, June 28 Tuesday, June 29
Chapter 4: Elasticity Monday, June 28 Tuesday, June 29 price PERFECTLY INELASTIC SUPPLY 100 90 80 70 60 50 40 30 10 0 0 10 30 40 50 60 70 80 90 100 quantity S=60 =1602P Quantity supplied doesn t depend
More informationEcon 170: Contemporary Economics Spring 2008 Exam 1 / Section F: SOLUTIONS. 1. Production possibilities and opportunity costs of missiles and houses
Econ 170: Contemporary Economics Spring 2008 Exam 1 / Section F: SOLUTIONS 1. Production possibilities and opportunity costs of missiles and houses The table below shows the tradeoff between different
More information19 : Theory of Production
19 : Theory of Production 1 Recap from last session Long Run Production Analysis Return to Scale Isoquants, Isocost Choice of input combination Expansion path Economic Region of Production Session Outline
More informationPART 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
More informationSAMPLE FINAL. Part I  Multiple Choice Questions:
Part I  Multiple Choice Questions: SAMPLE FINAL 1. Which of the following is not a characteristic of a perfectly competitive market? a. Firms are price takers. b. Firms have difficulty entering the market.
More informationLecture 2. Marginal Functions, Average Functions, Elasticity, the Marginal Principle, and Constrained Optimization
Lecture 2. Marginal Functions, Average Functions, Elasticity, the Marginal Principle, and Constrained Optimization 2.1. Introduction Suppose that an economic relationship can be described by a realvalued
More informationHow Wages Are Determined in Labor Markets
ACTIVITY 45 How Wages Are Determined in Labor Markets This activity examines how wages and employment are determined in two types of labor s. A perfectly competitive labor is one in which all buyers and
More informationProfit and Revenue Maximization
WSG7 7/7/03 4:36 PM Page 95 7 Profit and Revenue Maximization OVERVIEW The purpose of this chapter is to develop a general framework for finding optimal solutions to managerial decisionmaking problems.
More informationMULTIPLE 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
More informationDEMAND AND SUPPLY IN FACTOR MARKETS
Chapter 14 DEMAND AND SUPPLY IN FACTOR MARKETS Key Concepts Prices and Incomes in Competitive Factor Markets Factors of production (labor, capital, land, and entrepreneurship) are used to produce output.
More informationc. Given your answer in part (b), what do you anticipate will happen in this market in the longrun?
Perfect Competition Questions Question 1 Suppose there is a perfectly competitive industry where all the firms are identical with identical cost curves. Furthermore, suppose that a representative firm
More informationDawg Tags quantity TVC MC TFC TC ATC 1 $5 $
Exam 2 ECNS 204 Microeconomics Spring 2013 Instructor: Eric Belasco Name Belasco KEY 1. (35 points, 5 points each) You run a company called Dawg Tags, which prints dog tags and resides in a perfectly competitive
More informationModule 2 Lecture 5 Topics
Module 2 Lecture 5 Topics 2.13 Recap of Relevant Concepts 2.13.1 Social Welfare 2.13.2 Demand Curves 2.14 Elasticity of Demand 2.14.1 Perfectly Inelastic 2.14.2 Perfectly Elastic 2.15 Production & Cost
More informationProductioin OVERVIEW. WSG5 7/7/03 4:35 PM Page 63. Copyright 2003 by Academic Press. All rights of reproduction in any form reserved.
WSG5 7/7/03 4:35 PM Page 63 5 Productioin OVERVIEW This chapter reviews the general problem of transforming productive resources in goods and services for sale in the market. A production function is the
More informationAP Microeconomics Chapter 12 Outline
I. Learning Objectives In this chapter students will learn: A. The significance of resource pricing. B. How the marginal revenue productivity of a resource relates to a firm s demand for that resource.
More informationChapter 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
More informationMICROECONOMICS  EXAM III
MICROECONOMICS  EXAM III Spring 2004 G. Garesché 1. a. On the axes below, graph a production function. Indicate the three stages of the production function and label each with the returns expected. b.
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Chapter 10  Output and Costs  Sample Questions MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The short run is a period of time in which A)
More informationTable of Contents MICRO ECONOMICS
economicsentrance.weebly.com Basic Exercises Micro Economics AKG 09 Table of Contents MICRO ECONOMICS Budget Constraint... 4 Practice problems... 4 Answers... 4 Supply and Demand... 7 Practice Problems...
More informationMODULE 70: THE MARKETS FOR
MODULE 70: THE MARKETS FOR LAND & CAPITAL SCHMIDTY SCHOOL OF ECONOMICS THE PURPOSE OF THIS MODULE IS TO SHOW HOW WE CAN USE SUPPLY AND DEMAND TO MODEL THE MARKETS FOR THE LAND AND CAPITAL INPUTS. Learning
More informationFalse_ If there are no fixed costs, then average cost cannot be higher than marginal cost for all output levels.
LECTURE 10: SINGLE INPUT COST FUNCTIONS ANSWERS AND SOLUTIONS True/False Questions False_ When a firm is using only one input, the cost function is simply the price of that input times how many units of
More informationPreTest Chapter 21 ed17
PreTest Chapter 21 ed17 Multiple Choice Questions 1. Which of the following is not a basic characteristic of pure competition? A. considerable nonprice competition B. no barriers to the entry or exodus
More informationExam 3 Student Name: Microeconomics Exam Dates: Week 15, late Aprilearly May, 2007
Exam 3 Student Name: Microeconomics Exam Dates: Week 15, late Aprilearly May, 2007 Instructions: I) On your Scantron card you must print three things: 1) Print your full name clearly; 2) Print the day
More informationOutline of model. Factors of production 1/23/2013. The production function: Y = F(K,L) ECON 3010 Intermediate Macroeconomics
ECON 3010 Intermediate Macroeconomics Chapter 3 National Income: Where It Comes From and Where It Goes Outline of model A closed economy, marketclearing model Supply side factors of production determination
More informationCASE FAIR OSTER PEARSON
CASE FAIR OSTER PEARSON Publishing as Prentice Hall PRINCIPLES OF MICROECONOMICS E L E V E N T H E D I T I O N Prepared by: Fernando Quijano w/shelly Tefft 2of 35 Input Demand: The Labor and Land Markets
More information5. The supply curve of a monopolist is A) upward sloping. B) nonexistent. C) perfectly inelastic. D) horizontal.
Chapter 12 monopoly 1. A monopoly firm is different from a competitive firm in that A) there are many substitutes for a monopolist's product but there are no substitutes for a competitive firm's product.
More informationCHAPTER 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
More informationLecture 8: Market Structure and Competitive Strategy. Managerial Economics September 11, 2014
Lecture 8: Market Structure and Competitive Strategy Managerial Economics September 11, 2014 Focus of This Lecture Examine optimal price and output decisions of managers operating in environments with
More informationEcon 101: Principles of Microeconomics
Econ 101: Principles of Microeconomics Chapter 13  Perfect Competition and the Supply Curve Fall 2010 Herriges (ISU) Ch. 13 Perfect Competition and Supply Fall 2010 1 / 27 Outline 1 Perfect Competition
More informationC H A P T E R 8. Profit Maximization and Competitive Supply CHAPTER OUTLINE
C H A P T E R 8 Profit Maximization and Competitive Supply CHAPTER OUTLINE 8.1 Perfectly Competitive Markets 8.2 Profit maximization 8.3 Marginal Revenue, Marginal Cost, and Profit Maximization 8.4 Choosing
More informationUNIT 6. Pricing under different market structures. Perfect Competition
UNIT 6 ricing under different market structures erfect Competition Market Structure erfect Competition ure Monopoly Monopolistic Competition Oligopoly Duopoly Monopoly The further right on the scale, the
More informationLabour is a factor of production, and labour, like other factors, such as capital (machinery, etc) are demanded by firms for production purposes.
Labour Demand Labour is a factor of production, and labour, like other factors, such as capital (machinery, etc) are demanded by firms for production purposes. The quantity of labour demanded depends on
More informationChapter 8 Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets
Managerial Economics & Business Strategy Chapter 8 Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets McGrawHill/Irwin Copyright 2010 by the McGrawHill Companies, Inc. All
More informationProblems: Table 1: Quilt Dress Quilts Dresses Helen 50 10 1.8 9 Carolyn 90 45 1 2
Problems: Table 1: Labor Hours needed to make one Amount produced in 90 hours: Quilt Dress Quilts Dresses Helen 50 10 1.8 9 Carolyn 90 45 1 2 1. Refer to Table 1. For Carolyn, the opportunity cost of 1
More informationAnswer: TRUE. The firm can increase profits by increasing production.
Solutions to 1.01 Makeup for Midterm Short uestions: 1. (TOTAL: 5 points) Explain whether each of the following statements is True or False. (Note: You will not get points for a correct answer without
More informationECMC02H Intermediate Microeconomics  Topics in Price Theory
1 ECMC02H Intermediate Microeconomics  Topics in Price Theory Term Test October 19, 2009 Professor Gordon Cleveland Time: 80 minutes ANSWERS TO THE TEST QUESTIONS ARE SHOWN BELOW EACH QUESTION. DIFFERENT
More informationChapter 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,
More information1. An economic institution that combines factors of production into outputs for consumers is a(n): A) industry. B) plant. C) firm. D) multinational.
Miami Dade College ECO 2023 Principles of Microeconomics Summer B 2014 Practice Test #3 1. An economic institution that combines factors of production into outputs for consumers is a(n): A) industry. B)
More informationMULTIPLE 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)
More informationEconomics 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
More informationLab #11. Chapter 11 Perfect Competition
University of Lethbridge Department of Economics ECON 1010 Introduction to Microeconomics Instructor: Michael G. Lanyi Lab #11 Chapter 11 Perfect Competition 1) Perfect competition occurs in a market where
More informationEcon 111 (04) 2nd Midterm A
Econ 111 (04) 2nd Midterm A MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which one of the following does not occur in perfect competition? A)
More informationMC 2 AC 2 P 1 P 2 D. q Q 1 Q 2 Q
Perfect Competition Problem 1 (APT 93, P1) A perfectly competitive manufacturing industry is in longrun equilibrium. Energy is an important variable input in the production process and therefore the price
More informationAP MICRO Week 4 Practice Quiz: M, 20
1 1. A marketing survey shows that gate receipts would increase if the price of tickets to a summer rock concert increased, even though the number of tickets sold would fall. What does this imply about
More informationEconomics 103h Fall 2012: Part 1 of review questions for final exam
Economics 103h Fall 2012: Part 1 of review questions for final exam This is the first set of review questions. The short answer/graphing go through to the end of monopolistic competition. The multiple
More information