Answered: 39) Exhibit 8-19 Long-run perfectly…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 1SCQ: Firms ill a perfectly competitive market are said to be price takers that is, once the market...

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1. For a perfectly competitive firm, marginal revenue product is equal to:

price minus marginal cost

price times marginal revenue.

price times marginal product.

none of these.

2. An argument in favor of price discrimination is that this pricing strategy permits some consumers who otherwise would be excluded from a market to buy a good or service. (T/F)

3. Since World War II, the percentage of U.S. workers who are unionized has declined from about 86 percent to its current level of 60 percent. (T/F)

4. Which of the following statements is true?

A monopsony is the only employer of a factor of production.

A monopsony will pay workers a higher wage and employ fewer workers than a competitive labor market.

A monopsony has a marginal factor cost curve which lies below its supply curve of labor.

Unions are becoming a greater influence in American labor markets.

All of these.

5. The profit maximizing or loss minimizing quantity of output for any firm to produce exists at that output level in which:

total revenue is maximized

total cost is minimized.

marginal cost is minimized.

marginal revenue equals marginal cost.

6. In the short run, the profit maximizing (or minimizing) quantity of output for any firm to produce exists at that output level at which marginal revenue equals marginal cost. (T/F)

7. A monopsony owner believes that hiring an additional worker would increase the company's revenue by $150 per day. We can conclude that the monopsony pays its workers:

more than $150 per day.

exactly $150 per day.

less than $150 per day.

exactly $75 per day.

39) Exhibit 8-19 Long-run perfectly competitive industry
25
's
20
Price
per unit
(dollars)
15
10
D,
10 15 20
25 30 35
Quantity of output
(thousands of units per week)
As shown in Exhibit 8-19, assume that a perfectly competitive industry is in long-run equilibrium at
point A and the demand curve shifts from Dị to D2. Which of the following is a part of the industry
adjustment process?
O The price will temporarily rise at point B.
New firms will enter the industry.
Firms will temporarily make positive economic
profits.
All of these.

33) Exhibit 8-7 A firm's cost and MR curves
мс
ATC
25
22
MR
Cost,
revenues
(dollars)
Quantity
In Exhibit 8-7, if this firm is currently producing 20 units of output, this
firm:
O is at its profit-maximizing point.
is earning a $3 profit on each item
sold.
is losing $3 on each item sold.
should shut down.
is earning a total profit of $3.

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