microecon 2

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Angele1990
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123101
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microecon 2
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2011-12-12 14:48:48
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microecon
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  1. Under perfect competition in the short run

    A. None of these conditions prevail.
    B. all firms are making a profit.
    C. all firms are losing money.
    D. firms can enter or leave the industry.
    E. most firms make zero economic profits.
    A. None of these conditions prevail.
    (this multiple choice question has been scrambled)
  2. Under perfect competition, if some firms are taking losses in the short run, in the long run

    A. equilibrium price will rise until all firms are earning zero economic profits.
    B. those firms will earn losses until demand increases
    C. those firms will cut back their output until they get to the level at which marginal cost equals price.
    D. firms will leave the industry until all firms are making a profit.
    A. equilibrium price will rise until all firms are earning zero economic profits
    (this multiple choice question has been scrambled)

  3. Total profit

    A. cannot be found on this graph.
    B. is the rectangle bounded by GHMO.
    C. is the rectangle bounded by EFIJ.
    D. is the rectangle bounded by FGHI.
    C. is the rectangle bounded by EFIJ
    (this multiple choice question has been scrambled)
  4. If a perfectly competitive firm were to raise its price above the market price, it would

    A. sell nothing.
    B. sell slightly less than at the market price.
    C. sell significantly less than at the market price.
    D. sell slightly more than at the market price.
    A. sell nothing.
    (this multiple choice question has been scrambled)
  5. If the perfect competitor is taking a loss, its output will be _______ it's most efficient output.

    A. greater than
    B. equal to
    C. less than
    C. less than
    (this multiple choice question has been scrambled)
  6. Which of the following is NOT a basic characteristic of perfect competition?

    A. No barriers to the entry or exit of firms
    B. A large number of buyers and sellers
    C. Considerable non-price competition
    D. A standardized or identical product
    C. Considerable non-price competition
    (this multiple choice question has been scrambled)
  7. If the market price is below the break-even point, in the long run we should expect

    A. firms to leave the industry, market supply to fall, and product price to rise.
    B. firms to enter the industry, market supply to rise, and product price to fall.
    C. firms to leave the industry, market supply to rise, and product price to fall.
    D. no change in the number of firms in this industry.
    A. firms to leave the industry, market supply to fall, and product price to rise
    (this multiple choice question has been scrambled)
  8. If marginal cost is greater than marginal revenue

    A. there is no way to determine if the firm should expand output, contract output, or hold output constant.
    B. the firm should hold output constant.
    C. the firm should expand output.
    D. the firm should contract output.
    D. the firm should contract output.
    (this multiple choice question has been scrambled)

  9. Marginal revenue at the profit-maximizing/loss-minimizing amount is

    A. $6.
    B. $5.
    C. $8.
    D. $7.
    A. $6.
    (this multiple choice question has been scrambled)

  10. When operating at the profit-maximizing/loss-minimizing level of output, total revenue minus total cost
    is a little under

    A. $200.
    B. $45.
    C. $100.
    D. -$45.
    E. -$100.
    A. $200.
    (this multiple choice question has been scrambled)
  11. The average total cost at the profit-maximizing/loss-minimizing amount is a little over

    A. $9 per unit.
    B. $11 per unit.
    C. $8 per unit.
    D. $10 per unit.
    A. $9 per unit.
    (this multiple choice question has been scrambled)

  12. Which statement is true?

    A. The firm is breaking even in the long run.
    B. The firm is making a profit in the long run.
    C. The firm is making a profit in the short run.
    D. The firm is taking a loss in the long run.
    E. The firm is taking a loss in the short run.
    A. The firm is breaking even in the long run.
    (this multiple choice question has been scrambled)
  13. At an output of 55, AVC is $41 and MC is $38. At an output of 56, AVC is $42 and MC is $43. We may
    conclude that at the shutdown point AVC is

    A. greater than $43.
    B. less than $42.
    C. less than $41.
    D. less than $43.
    C. less than $41
    (this multiple choice question has been scrambled)
  14. At an output of 19, MC = $39 and AVC = $44. At an output of 20, MC = $50 and AVC = $45. At the
    shutdown point, AVC is

    A. between $44 and $45.
    B. $45.
    C. more than $45.
    D. $44.
    E. less than $44.
    E. less than $44
    (this multiple choice question has been scrambled)
  15. A firm with explicit costs of $3,000,000, no implicit costs, and total revenue of $3,000,000 would
    have

    A. All of the choices are true of this firm.
    B. zero accounting profit.
    C. accounting profits equal to economic profits, in this case both zero.
    D. zero economic profit.
    A. All of the choices are true of this firm
    (this multiple choice question has been scrambled)
  16. Which statement is false?

    A. The monopolist produces at the minimum point of its ATC curve.
    B. None of these statements are false.
    C. The monopolist's demand and marginal revenue curves are two separate curves.
    D. The monopolist can sell more output only by lowering price.
    A. The monopolist produces at the minimum point of its ATC curve
    (this multiple choice question has been scrambled)
  17. Which statement is true?

    A. Monopolies are always large firms.
    B. Price is always read off the demand curve.
    C. Once a monopoly is set up, it is impossible to dislodge it.
    D. The monopolist operates at the minimum point of its average total cost curve.
    B. Price is always read off the demand curve.
    (this multiple choice question has been scrambled)
  18. Which statement is true?

    A. The monopolist charges a higher price than the perfect competitor in the long run.
    B. None of these statements are true
    C. The monopolist's most efficient output is its most profitable output as well.
    D. All monopolists have control over an essential resource.
    A. The monopolist charges a higher price than the perfect competitor in the long run.
    (this multiple choice question has been scrambled)
  19. Which statement is false?

    A. Economies of scale and high capital requirements are significant barriers to entry.
    B. Natural monopolies can provide cheaper service as monopolies than could several competing firms.
    C. None of these statements are false.
    D. The two main justifications for monopoly are economies of scale and natural monopoly.
    C. None of these statements are false.
    (this multiple choice question has been scrambled)
  20. When more substitutes become available, a monopolist has __________ power to raise price.

    A. more
    B. infinite
    C. less
    C. less
    (this multiple choice question has been scrambled)

  21. If the marginal cost were $14, output would be

    A. 2.
    B. 3.
    C. 4.
    D. 5.
    E. 1.
    D. 5
    (this multiple choice question has been scrambled)
  22. If a monopolist's price were $8, it is likely that in equilibrium

    A. None of the choices are correct
    B. MC = MR, and both are equal to $8.
    C. MC = MR, and both are less than $8.
    D. MC = MR, and both are more than $8.
    C. MC = MR, and both are less than $8.
    (this multiple choice question has been scrambled)
  23. A natural monopoly

    A. occurs when a single firm can supply the entire market demand for a product at a lower average cost
    B. has a marginal cost curve that is steeply upward sloping.
    C. has an average cost curve that reaches minimum possible average cost at a low level of output.
    D. is usually allowed to choose its price so as to maximize profits in the United States.
    E. is usually subject to antitrust suits.
    than would be possible if two or more firms supplied the market.
    A. occurs when a single firm can supply the entire market demand for a product at a lower average cost than would be possible if two or more firms supplied the market.
    (this multiple choice question has been scrambled)

  24. If the marginal cost were $13, how many units of output would this firm produce?

    A. 1
    B. 2
    C. 3
    D. 4
    E. 5
    D. 4
    (this multiple choice question has been scrambled)

  25. If the marginal cost were $21, output would be

    A. 2.
    B. 4.
    C. 1.
    D. 5.
    E. 3.
    A. 2.
    (this multiple choice question has been scrambled)

  26. The profit-maximizing firm will be earning total revenue of

    A. OFJM.
    B. NIKL.
    C. OFIN.
    D. OFKL.
    E. OGHM.
    D. OFKL.
    (this multiple choice question has been scrambled)
  27. If the government attempts to break up a natural monopoly to enforce competition in an industry

    A. the smallest firm will have a significant cost advantage over the larger, less efficient firms.
    B. the average cost of producing the good will decrease.
    C. the average cost of producing the good will increase.
    D. the price paid by consumers will be expected to remain the same.
    C. the average cost of producing the good will increase.
    (this multiple choice question has been scrambled)

  28. If this firm were a perfect competitor, at what output would it produce in the long run?

    A. OL
    B. None of the choices are correct.
    C. OM
    D. OP
    A. OL
    (this multiple choice question has been scrambled)

  29. The profit-maximizing firm's output will be about

    A. 500.
    B. 625.
    C. 550.
    D. 450.
    E. 750.
    D. 450.
    (this multiple choice question has been scrambled)

  30. Assuming the monopolist shown in the graph adjusts output to maximize profits, it is

    A. earning profits and could be in the short-run or long-run.
    B. earning profits in the short-run.
    C. having losses in the short-run.
    D. earning profits in the long-run.
    A. earning profits and could be in the short-run or long-run.
    (this multiple choice question has been scrambled)

  31. The profit-maximizing firm will operate at an output of

    A. 0K.
    B. 0J.
    C. 0L.
    D. 0M.
    B. 0J.
    (this multiple choice question has been scrambled)
  32. Which statement is the most accurate?

    A. The monopolist breaks even in the long run.
    B. The monopolist produces at the minimum point of its average total cost curve.
    C. Nearly all monopolists are very large firms.
    D. The monopolist faces the entire industry demand curve.
    D. The monopolist faces the entire industry demand curve
    (this multiple choice question has been scrambled)

  33. If the firm is maximizing profits or minimizing losses, it is producing _____ units of output and charging
    a price of _____.

    A. 50; $10
    B. 50; $18.40
    C. 60; $12
    D. 60; $16.80
    B. 50; $18.40
  34. Which of the following is false?

    A. If a monopolist is losing money, it is in the long run.
    B. Price is read off the demand curve for the monopolist
    C. The monopolist and perfect competitor both produce where MC equals MR.
    D. A monopoly is a firm that produces all the output in an industry.
    A. If a monopolist is losing money, it is in the long run.
    (this multiple choice question has been scrambled)
  35. Which of the following is true?

    A. Monopolies can be overcome by market forces or by government action.
    B. The most efficient output is found where MC and MR cross.
    C. Legal barriers are the basis for monopoly in the automobile industry.
    D. Monopolists never lose money regardless of short-run or long-run.
    A. Monopolies can be overcome by market forces or by government action.
    (this multiple choice question has been scrambled)
  36. Which is the most accurate statement about Wal-Mart?

    A. It has used its monopoly power to force price increases.
    B. It proves the case that bigness is always bad.
    C. Directly and indirectly it saves American consumers up to $100 billion a year.
    D. It proves the case that bigness is always good.
    C. Directly and indirectly it saves American consumers up to $100 billion a year.
    (this multiple choice question has been scrambled)

  37. If this firm were a perfect competitor, at what output would it produce in the long run?

    A. 70 units
    B. 40 units
    C. 60 units
    D. 50 units
    D. 50 units
    (this multiple choice question has been scrambled)

  38. The marginal revenue that would be derived from production of the second unit would be

    A. $21
    B. $27
    C. $24
    D. $30
    E. $18
    C. $24
    (this multiple choice question has been scrambled)
  39. Which of the following is true?

    A. Monopolies can only be overcome by government action.
    B. Having a recognizable brand name is a barrier to entry that can preserve monopoly power.
    C. Monopolists never lose money in the short-run or long-run.
    D. Patents are granted to investors who have control over an essential resource.
    B. Having a recognizable brand name is a barrier to entry that can preserve monopoly power.
    (this multiple choice question has been scrambled)
  40. Statement I. Patents are granted to investors so that they have a chance to get rich before someone else
    uses their ideas.
    Statement II. Patents are essential to pharmaceutical companies, which may spend hundreds of millions
    of dollars developing a drug.

    A. Both statements are true.
    B. Statement II is true and statement I is false.
    C. Statement I is true and statement II is false.
    D. Both statements are false.
    A. Both statements are true
    (this multiple choice question has been scrambled)
  41. Price discrimination means

    A. charging different prices for identical goods that have identical production costs.
    B. eliminating all costs so that only profits are realized.
    C. exploiting the working masses by charging the highest single price possible.
    D. paying wages according to race or sex rather than productivity.
    A. charging different prices for identical goods that have identical production costs.
    (this multiple choice question has been scrambled)
  42. Which statement is true?
    A. In order for product differentiation to take place, there must be clear physical differences among the
    B. Monopolistic competitors produce an identical product.
    C. There are many firms in a monopolistically competitive industry.
    products sold.
    D. None of these statements are true.
    C. There are many firms in a monopolistically competitive industry.
    (this multiple choice question has been scrambled)
  43. Which statement is true?

    A. None of these statements are true.
    B. The monopolistic competitor is often a large firm.
    C. Price discrimination is impossible under monopolistic competition.
    D. Most firms in the U.S. are not monopolistic competitors.
    A. None of these statements are true.
    (this multiple choice question has been scrambled)
  44. Long-run equilibrium for firms in monopolistically competitive industries is similar to that for firms in
    perfect competition in that

    A. price equals marginal cost.
    B. price equals minimum possible average total cost.
    C. price equals average total cost.
    D. marginal revenue equals average total cost.
    C. price equals average total cost.
    (this multiple choice question has been scrambled)

  45. If the firm is maximizing profits, this firm charges a price of

    A. $25.
    B. $13.
    C. $16.
    D. $12.
    A. $25.
    (this multiple choice question has been scrambled)

  46. This firm maximizes profits (or minimizes losses) by producing a quantity of about _____ units.

    A. 200
    B. 250
    C. 300
    D. 150
    B. 250
    (this multiple choice question has been scrambled)
  47. An important result in long-run equilibrium in monopolistic competition is that the equilibrium point
    results in

    A. price is greater than ATC.
    B. price = ATC.
    C. ATC = MR.
    D. ATC = MC.
    E. price = MR.
    B. price = ATC.
    (this multiple choice question has been scrambled)
  48. Which would be an example of perfect price discrimination?

    A. When doctors charge rich and poor patients different prices for the same medical services
    B. When movies charge different prices at different times
    C. When airlines charge different prices for seats on the same flight
    D. None of the choices are examples of price discrimination.
    D. None of the choices are examples of price discrimination.
    (this multiple choice question has been scrambled)

  49. If demand curve D2 represents a monopolistic competitor and demand curve D3 represents a monopoly,
    then

    A. the monopolistic competitor has a more elastic demand curve than the monopolist.
    B. the monopolist and the monopolistic competitor have identical elasticity in their demand curves.
    C. None of these choices are true.
    D. the monopolist has a more elastic demand curve than the monopolistic competitor.
    A. the monopolistic competitor has a more elastic demand curve than the monopolist.
    (this multiple choice question has been scrambled)
  50. In the long run the monopolistic competitor ________ at peak efficiency and the perfect competitor
    ________ at peak efficiency.

    A. operates; operates
    B. does not operate; does not operate
    C. does not operate; operates
    D. operates; does not operate
    C. does not operate; operates
    (this multiple choice question has been scrambled)
  51. Monopolistically competitive firms prevent the efficient use of resources because in long-run
    equilibrium

    A. marginal cost is less than average total cost.
    B. price is less than marginal cost.
    C. price equals marginal cost.
    D. price is greater than marginal cost.
    D. price is greater than marginal cost.
    (this multiple choice question has been scrambled)
  52. Product differentiation

    A. is based solely on deceiving the buyer.
    B. takes place in the minds of the sellers.
    C. is rare under monopolistic competition.
    D. takes place in the minds of the buyers.
    D. takes place in the minds of the buyers
    (this multiple choice question has been scrambled)
  53. Each of the following is an example of price discrimination except

    A. student rates for subscriptions to Business Week.
    B. senior citizen discounts at restaurants.
    C. high-priced tickets just behind the bench of the NBA championship team.
    D. lower-priced movie tickets at "rush hour" to attract customers at dinner time.
    C. high-priced tickets just behind the bench of the NBA championship team
    (this multiple choice question has been scrambled)

  54. This profit-maximizing (loss-minimizing) firm produces a quantity of about _______ units.

    A. 50
    B. 30
    C. 80
    D. 100
    C. 80
    (this multiple choice question has been scrambled)
  55. Statement I: The trend toward customization is taking product differentiation one step further.

    Statement II: Americans are provided with about the same amount of product differentiation as people in
    most other countries.

    A. Both statements are true.
    B. Both statements are false.
    C. Statement II is true and statement I is false.
    D. Statement I is true and statement II is false.
    D. Statement I is true and statement II is false.
    (this multiple choice question has been scrambled)

  56. This profit-maximizing firm produces a quantity of about ________ units.

    A. 45
    B. 55
    C. 50
    D. 40
    C. 50
    (this multiple choice question has been scrambled)

  57. This monopolistic competitor is in the

    A. long run making a profit.
    B. short run taking a loss.
    C. long run breaking even
    D. long run taking a loss.
    E. short run making a profit.
    C. long run breaking even
    (this multiple choice question has been scrambled)

  58. This profit-maximizing (loss-minimizing) firm produces a quantity of about ________ units.

    A. 100
    B. 90
    C. 80
    D. 70
    D. 70
    (this multiple choice question has been scrambled)
  59. You could conclude that

    A. new firms will enter the industry.
    B. existing firms will leave the industry.
    C. the industry is in the long run.
    C. the industry is in the long run.
    (this multiple choice question has been scrambled)
  60. Providing better service, ambience, or a convenient location are all forms of

    A. product differentiation
    B. price discrimination
    C. consumer surplus
    D. economies of scale
    A. product differentiation
    (this multiple choice question has been scrambled)
  61. Which of the following statements are true?

    A. The demand curve of a monopolistic competitor is identical to its marginal revenue curve.
    B. In the long run the monopolistic competitor is as efficient as the perfect competitor.
    C. The demand curve of a monopolistic competitor is more horizontal (flatter) than a monopolist's demand curve.
    D. In the long run the monopolistic competitor will definitely make a profit.
    C. The demand curve of a monopolistic competitor is more horizontal (flatter) than a monopolist's demand curve.
    (this multiple choice question has been scrambled)
  62. In the long run if some firms are losing money in monopolistic competition

    A. the industry supply curve cannot increase because of high barriers to entry.
    B. the industry supply curve will decrease and market price will rise.
    C. the industry supply curve cannot decease because of high barriers to entry.
    D. the industry supply curve will increase and market price will fall.
    B. the industry supply curve will decrease and market price will rise.
    (this multiple choice question has been scrambled)

  63. This profit-maximizing firm produces a quantity of a little over _______ units.

    A. 125
    B. 65
    C. 110
    D. 85
    D. 85
    (this multiple choice question has been scrambled)

  64. If this firm produced at its most efficient output level it would produce _______ units.

    A. 80
    B. 115
    C. 50
    D. 140
    A. 80
    (this multiple choice question has been scrambled)
  65. Statement I: The absence of significant barriers to entry ensures that long run profits will be competed
    away for the monopolistic competitor.

    Statement II: Providing better service, ambience, or a convenient location are all forms of price
    discrimination.

    A. Statement II is true and statement I is false.
    B. Both statements are true.
    C. Both statements are false.
    D. Statement I is true and statement II is false.
    D. Statement I is true and statement II is false
    (this multiple choice question has been scrambled)
  66. Which one of these firms would be an oligopolist?

    A. A McDonald's restaurant in Manhattan
    B. Proctor & Gamble
    C. A family farm
    D. The only dentist in Hendry County, Florida
    B. Proctor & Gamble
    (this multiple choice question has been scrambled)
  67. The demand curve facing an oligopoly will be less elastic

    A. the larger its share of the market and the more differentiated the product.
    B. the smaller its share of the market and the more differentiated the product.
    C. the smaller its share of the market and the less differentiated the product.
    D. the larger its share of the market and the less differentiated the product.
    A. the larger its share of the market and the more differentiated the product
    (this multiple choice question has been scrambled)

  68. The highest Herfindahl-Hirschman Index

    A. cannot be determined.
    B. is in Industry X.
    C. is in Industry Y.
    D. is in Industry Z.
    B. is in Industry X.
    (this multiple choice question has been scrambled)
  69. The strong interdependence of oligopolistic firms is shown by

    A. the vulnerability of their sales to the actions of their rivals.
    B. their inability to form a price conspiracy.
    C. their willingness to change prices frequently.
    D. their reluctance to advertise.
    A. the vulnerability of their sales to the actions of their rivals.
    (this multiple choice question has been scrambled)

  70. Which statement is true?

    A. Industry Y has an H-H-I of 2,738.
    B. Industry Y has an H-H-I of 100.
    C. Industry Y has an H-H-I of 1,000.
    D. Industry Y has a Herfindahl-Hirschman Index of 95.
    A. Industry Y has an H-H-I of 2,738.
    (this multiple choice question has been scrambled)
  71. Which is the most accurate statement?

    A. An oligopolistic industry cannot have more than five firms.
    B. There are a whole range of oligopolistic models, from a cartel to cutthroat competition.
    C. The most important aspect of oligopoly is product differentiation.
    D. There are virtually no oligopolies in the U.S.
    B. There are a whole range of oligopolistic models, from a cartel to cutthroat competition.
    (this multiple choice question has been scrambled)
  72. Statement I. Most cars sold in the United States were made in Japan or assembled in the United States by
    Japanese-owned companies.

    Statement II. Imports of fuel-efficient cars made in Japan reduced the concentration ratio in the United
    States that was dominated by G.M., Ford, and Chrysler.

    A. Statement I is true and statement II is false.
    B. Statement II is true and statement I is false.
    C. Both statements are true.
    D. Both statements are false.
    D. Both statements are false.
    (this multiple choice question has been scrambled)
  73. Which statement is true?

    A. The lower the concentration ratio, the higher the degree of oligopolization.
    B. There is no relationship between the concentration ratio and the degree of oligopolization.
    C. The concentration ratio remains constant as the degree of oligopolization rises.
    D. The higher the concentration ratio, the higher the degree of oligopolization.
    D. The higher the concentration ratio, the higher the degree of oligopolization.
    (this multiple choice question has been scrambled)
  74. The higher the degree of oligopolization

    A. the greater the likelihood of collusion. B. the smaller the likelihood of collusion. C. the greater the likelihood of product differentiation.
    D. the greater the likelihood of cut-throat competition.
    A. the greater the likelihood of collusion.

  75. The highest Herfindahl-Hirschman index

    A. is in Industry Y.
    B. is in Industry X.
    C. is in Industry Z.
    D. cannot be determined.
    C. is in Industry Z.
    (this multiple choice question has been scrambled)

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