Micro. Final exam review. Ch.14.15.16.plus assorted

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Gwinnett Technical College *

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MICROECONO

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Economics

Date

Feb 20, 2024

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ppt

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27

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A. wages paid to employees B. interest paid to a bank on a building loan C. the cost of the firm using capital that is owned by the entrepreneur of the firm D. dollars paid to a supplier for materials used in production Which of the following is an example of an implicit cost?
A. the implicit costs of the business B. all of the firm's costs including its normal profit and its economic profit C. the cost of all the factors of production the firm employs D. the firm’s explicit costs For a business, opportunity cost equals ____________.
A. returns from labor increase regardless of the number of workers employed B. returns from labor eventually decrease as more workers are employed C. the average fixed cost increases as more output is produced. D. the variable cost decreases as more output is produced One reason the ATC curve is U-shaped is that _____.
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A. average product of a worker is less than the average product of the previous worker B. marginal product of a worker exceeds the marginal product of the previous worker C. average product of labor is at a maximum D. marginal product of labor exceeds the average product of labor. Increasing marginal returns occur when the _________.
A. marginal cost decreases as output increases B. marginal product increases as labor increases with capital unchanged C. a firm increases its plant size and labor by the same percentage, but its output increases by a larger percentage D. marginal product increases as the firm increases its plant size Economies of scale occur whenever ________.
A. ATC 1 B. ATC 2 C. ATC 3 D. ATC 4 The figure shows four ATC curves of a firm. If the firm produces 3,000 units per day, in the long run, it will use the plant size that corresponds to _______.
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A. the AFC curve shifts upward B. the AVC curve doesn’t change but ATC shifts upward C. the MC curve remains the same, but the AVC curve shift upward D. both the MC curve and the AVC curve shift upward If the wage rate paid to workers increases, then _____.
A. many other firms produce the same product B. only one firm produces the product C. many firms produce a slightly differentiated product D. a there are no barriers to entry A perfectly competitive firm is a price taker because _____.
A. total revenue equals total cost B. marginal revenue is equal to marginal cost C. total cost is at its minimum D. total revenue is at its maximum A perfectly competitive firm maximizes its profit by producing at the output at which _______.
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A. 0 B. between 1 and 49 C. 50 D. 60 The figure shows cost curves for a perfectly competitive dry cleaner. If the price of dry cleaning a shirt is $10 per shirt, the firm will dry clean ____ shirts an hour.
A. immediately shut down B. continue to produce if the price exceeds the average fixed cost C. continue to produce if the price exceeds the average variable cost D. shut down if the price exceeds the average fixed cost If the market price is below the perfectly competitive firm’s average total cost, the firm will _________.
A. equals to marginal cost B. equal to average total cost C. greater than average total cost D. greater than average variable cost A perfectly competitive firm makes a positive economic profit in the short run if market price of the good produced is _____ of producing it.
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A. $5,000 B. $25,000 C. $45,000 D. $75,000 Juan’s Software Service Company is a perfectly competitive firm. Juan’s total fixed cost is $25,000, its average variable cost for 1,000 service calls is $45, and its marginal revenue is $75. Juan’s makes 1,000 service calls a month. Juan’s makes an economic profit of ______ a month.
A. is maximizing its profit B. will increase its profit if it produces a larger output C. will increase its profit if it raises its price to $12 a unit D. will increase its profit if it produces a smaller output A perfectly competitive firm is producing the output at which marginal cost is $12 a unit and its average total cost is $8 a unit. If the market price is $10 a unit, the firm ________.
A. 30 cars a day B. 33 cars a day C. 5.5 cars a day D. 3 cars a day If 5 workers can wash 30 cars a day and 6 workers can wash 33 cars a day, then the marginal product of the 6th worker equals ________.
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A. making zero economic profit B. increasing output in order to maximize profit C. incurring economic losses D. making positive economic profits In the long run, new firms will enter a perfectly competitive market when firms in the market are _______.
A. increase because the market demand for the good decreases B. decrease until the remaining firms earn a normal profit C. decrease until the remaining firms make economic profits D. do not change Firms in a competitive market are incurring economic losses. In the long run, firms exit the market and as they do, the economic losses of the remaining firms ______.
A. annual insurance for the hot dog stand B. cost of buying the hot dog stand C. cost of the hot dogs and condiments D. interest he pays on the funds he borrowed to pay for advertising Jay set up his hot dog stand near the business district. His total variable cost includes the _______,
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A. the consumer surplus is larger B. the total surplus is larger C. there is no consumer surplus D. the total surplus is smaller Comparing single-price monopoly to perfect competition, with monopoly ______.
A. marginal revenue exceeds marginal cost by the largest possible amount B. marginal revenue is equal to marginal cost C. average total cost is at its minimum D. the marginal cost equal the market price To maximize profit, a single-price monopoly produces the quantity at which ________.
A. patent law B. a firm buying up all of a natural resource C. economies of scale D. ownership of a natural resource A natural monopoly is one that arises from _______,
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A. $17.50 B. $8.50 C. $8.00 D. $9.00 A single-price monopoly can sell 1 unit for $9.00, but to sell 2 units, the price must be cut to $8.50 per unit. The marginal revenue from selling the second unit is ____.
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A. monopoly B. a barrier to entry C. behavior that is not profit-maximizing D. price discrimination A local pizza producer charges one price for a single pizza and almost give away a second one. This is an example of _____.
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A. is greater than B. is less than C. is equal to D. is not comparable to With perfect price discrimination, the quantity of output produced by the monopoly ____ the quantity produced by a perfectly competitive industry.
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A. increases; complements B. decreases; complements C. remains unchanged; complements D. decreases; substitutes If two goods have a cross elasticity of demand of 2, then when the price of one good increases, the demand for the other good _________ and the two goods are ______.
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A. costs more than any combination on a lower indifference curve B. is preferred to those on any lower indifference curve C. is less preferred to those on lower indifference curves D. might be more, less, or equally preferred to any combination on a lower indifference curve Any combination on a higher indifference curve ____.
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A. Insured people to adopt less healthy life styles B. to a separating equilibrium C. everyone to buy health insurance D. healthy people not to bother buying health insurance Moral hazard in the market for health-care services leads ______.
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