Final Exam Flashcards
A monopolist maximizes profits at the output at which
a) total revenue is at its greatest, assuming that the firm has both fixed and variable costs.
b) price equals marginal cost.
c) price exceeds marginal cost by the greatest amount.
d) none of the other answers
d) none of the other answers
Compared to a competitive market with similar demand and costs, a profit-maximizing monopoly will sell a _____ quantity of the product at a _____ price.
a) higher, lower
b) higher, higher
c) lower, lower
d) lower, higher
lower, higher
Which of the following is NOT true regarding monopoly?
A monopolist can charge as high a price as it likes to maximize its profit.
A firm experiencing economic losses will still continue to produce output in the short run as long as:
Price is above average variable cost.
If, for a perfectly competitive firm, price is greater than average variable cost, then it follows that
total revenue is greater than total variable cost.
For a perfectly competitive firm, MR = MC at 250 units of output. At 250 units, P is greater than AVC. It follows that
the firm should continue to produce.
Marginal revenue is
the change in total revenue brought about by selling an additional unit of the good.
The difference between the accountant’s and the economist’s measurement of costs equals:
The opportunity cost of unpaid resources.
Profit is defined as
total revenue minus total cost.
Which of the following is a characteristic of perfect competition?
buyers and sellers having all relevant information
Which of the following statements is true?
Accounting costs are always less than or equal to economic costs.
Accounting costs must equal economic costs (by definition).
Accounting costs are always greater than economic costs.
Accounting costs are equal to or greater than economic costs.
Accounting costs are always less than or equal to economic costs.
Which of the following statements is true?
Costs are always explicit, never implicit.
Costs are always implicit, never explicit.
George runs a stationery shop; he paid Frank $5,000 for the carpet he installed in the shop. The $5,000 for carpet is an implicit cost.
An implicit cost is a cost that represents the value of resources used in production for which no actual monetary payment is made.
An implicit cost is a cost that represents the value of resources used in production for which no actual monetary payment is made.
Greater labor productivity means:
Higher output per worker.
The law of diminishing marginal returns
holds only in the short run.
Suppose the amount of an input is on the horizontal axis. The slope of the total product curve is the
marginal product of the input.
