Unit 3 test

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New York Institute of Technology, Westbury *

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MISC

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Economics

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Feb 20, 2024

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docx

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Uploaded by CorporalTeamSquirrel29

Question 1 1 / 1 pts Occasionally, _________________ may lead to pure monopoly; in other market conditions, they may limit competition _________________ . barriers to entry; to a few oligopoly firms barriers to entry; to a natural monopoly deregulation; requiring new patent law deregulation; requiring new copyright law Question 2 1 / 1 pts In the United States, a pharmaceutical company's exclusive patent rights last for 20 years. 25 years. 10 years. 70 years. Question 3 0 / 1 pts If a comparison between average cost and price reveals whether a firm is earning profits, then a comparison between average variable cost and price reveals that if the market price exceeds average cost, profits will be positive.

that if the market price is below average cost, then profits will be negative. total revenues are the quantity produced multiplied by the price. whether the firm is earning profit if fixed costs are left out of the calculation. Question 4 1 / 1 pts For a perfectly competitive firm, the marginal cost curve is identical to the firm’s ________________ . demand curve supply curve average total cost curve average variable cost curve Question 5 1 / 1 pts If accounting profits for a firm are 20% of output, and the opportunity cost of financial capital is 8% of output, then what do the firm’s economic profits equal? 6% of output 10% of output 12% of output 8% of output Question 6

1 / 1 pts A firm that holds a monopoly position in the market place is a price maker a price taker monopolistically competitive subject to infinite market forces Question 7 0 / 1 pts Kate's 24-Hour Breakfast Diner menu offers one item, a $5.00 breakfast special. Kate's costs for servers, cooks, electricity, food, etc. average out to $3.95 per meal. Her costs for rent, insurance cleaning supplies and business license average out to $1.25 per meal. Since the market is highly competitive, Kate should raise her prices above the perfectly competitive level set by the market. keep the business open in the short-run, but plan to go out of business in the long-run. keep the business open in the short-run, and plan to expand the business in the long-run. lay-off her staff, break her lease, and close the business down immediately. Question 8 1 / 1 pts The term _________________ refers to a firm operating in a perfectly competitive market that must take the prevailing market price for its product. price setter

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business entity price taker trend setter Question 9 1 / 1 pts Marcella operates a small, but very successful art gallery. All but one of the following can be classified as a variable cost arising from the physical inputs Marcella requires to operate her business. Which is it? physical space for the gallery costs of purchasing art work to sell in the gallery wages paid to three part-time employees accountant's fees for preparing tax returns Question 10 1 / 1 pts In the ________, the perfectly competitive firm will react to profits by __________________________ . short run; increasing quality of products long run; tailoring their quality controls short run; reducing its labor inputs long run; increasing its production

Question 11 1 / 1 pts If a firm's revenues do not cover its average variable costs, then that firm has reached its _________________ . price taking point shutdown point marginal point opportunity margin Question 12 1 / 1 pts When a firm uses retained profits to invest in more energy efficient equipment, an economist would calculate the _________________ of investing in physical capital. typical hurdle rate opportunity cost degree of risk hurdle rate premium Question 13 1 / 1 pts Fixed costs are important because, at least in the ___________, the firm _______________. long run; cannot alter them

short run; cannot alter them long run; can alter them short run; can alter them Question 14 1 / 1 pts In order to determine ____________, the firm's total costs must be divided by the quantity of its output. diminishing marginal returns fixed costs variable cost average cost Question 15 1 / 1 pts Economies of scale may arise from all but one of the following. Which one is it? doubling promotional expenses to expand sale more than proportionately having a larger retail space can expand sales more than proportionately spreading the fixed-costs of administration over more customers holds average costs down government economic subsidies protect firms from competition to avoid losses.

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Question 16 1 / 1 pts An _________________ is calculated by subtracting the firm's costs from its total revenues, _______________________________ . accounting profit; excluding opportunity cost accounting profit; including opportunity cost economic profit; excluding opportunity cost opportunity cost; including economic profit Question 17 1 / 1 pts _____________ is calculated by taking the quantity of everything that is sold and multiplying it by the sale price. Total revenue Total profits Average profit margin Total cost Question 18 1 / 1 pts A firm's ___________ consist of expenditures that must be made before production starts that typically, over the short run, _______________ regardless of the level of production. fixed costs; do not change,

variable costs; are constantly changing, fixed costs; are consistently changing, variable costs; do not change, Question 19 1 / 1 pts Firms operating in a market situation that creates ___________________, sell their product in a market with other firms who produce identical or extremely similar products. a perfect monopoly perfect competition an oligopoly a free-market Question 20 1 / 1 pts In a free market economy, firms operating in a perfectly competitive industry are said to have only one major choice to make. Which of the following correctly sets out that choice? what quantity to produce what price to charge what quantity of labor is needed what quality to produce

Question 21 1 / 1 pts The table below shows a monopolist’s demand curve and cost information for the production of its good. What quantity will it produce? 1,400 1,300 1,100 1,000 Question 22 1 / 1 pts Why would a profit-seeking firm need to tailor its decisions about the quantity of labor inputs that it purchases? to produce the highest profitable quantity of output at the lowest possible marginal cost deciding what quantity to produce is one of the major choices a profit- seeking firm makes the quantity of labor is the only variable cost choice a profit-seeking firm can make

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to produce the profit-maximizing quantity of output at the lowest possible average cost Question 23 1 / 1 pts According to the definition of profit, if a profit-maximizing firm will always attempt to produce its desired level of output at the lowest possible cost, then it will do so regardless of what type of competition exists in a market. take a long-run perspective on costs, when such costs cannot be adjusted. take a short-run perspective on labor costs which cannot be immediately changed. breakdown its cost structure according to short-run adjustments. Question 24 1 / 1 pts In the event that Only1Corp. obtains control of all the natural gas producers in the US, it would most likely have a patent giving it exclusive legal rights to make, use, and sell for a limited time. raise prices, cut production, and realize positive economic profits. have legal protection to prevent copying its methods of production for commercial use. acquire rights for its investors to produce and sell their product. Question 25 1 / 1 pts

A manufacturer would likely make an ___________ in a market following the long-run process of beginning and expanding production in response to ________________ . accounting profit; a strategy to grow profits accounting profit; an incentive for profit entry; a sustained pattern of profits entry; an incentive to add to profits Question 26 1 / 1 pts Intellectual property law is a body of law that includes the right of inventors to produce their inventions the right of inventors to sell their inventions trademark, patent and trade secret legislation copyright legislation, as well as all of the above Question 27 1 / 1 pts Approximately what percentage of the US labor force is employed by firms that have fewer than 100 employees? 63% 50% 45%

35% Question 28 1 / 1 pts Refer to the graph shown above. Based on the information illustrated in the graph, which of the following is correct? marginal cost line must intersect the average cost line at the middle point of the average cost curve marginal cost of production is below the average cost for producing previous units producing one more unit is reducing average costs overall producing a marginal unit is increasing average costs overall Question 29 1 / 1 pts The ______________ of all firms can be broken down into some common underlying patterns.

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total revenues diminishing short-run costs cost structure diminishing long-run costs Question 30 1 / 1 pts The marginal cost curve is generally ______________, because diminishing marginal returns implies that additional units are ________________________. downward-sloping; more costly to produce upward-sloping; more costly to produce downward-sloping; less costly to produce upward-sloping; less costly to produce

Unit 3 test

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