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Microeconomics > Practice Test 4 > Flashcards

Practice Test 4 Flashcards

1
Q

Revenue, costs, and profit for avocado producers. The market for avocados is perfectly competitive. The market price of a bushel of avocados is $18. At the profit, maximizing quantity of output in the figure, the farmers total revenue is.——-his total cost is——-and his economic profit is———

A

$90,70,20

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2
Q

Erica is price taking owner of a cherry orchard. The price of cherries high enough that Aric is earning positive economic profits. In the long run, Erica should expect.——-cherry prices due to the——— firms

A

Lower, entry of new

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3
Q

Adams perfectly competitive surfboard factories, making positive economic profits. If the price of a surfboard is $900, Adams output is 300 surfboards per month and its monthly average total cost is $700, what is his monthly profit?

A

$60,000

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4
Q

If Jimmy cell 300 pounds in a perfectly competitive market for one dollar each than his marginal revenue is

A

One dollar

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5
Q

A——-actions have no effect on the market price of the good or service that they buy.

A

Price taking Consumers

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6
Q

Imperfect competition

A

Price and average revenue are the same

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7
Q

Reception of the model of perfect competition is

A

Many buyers and sellers

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8
Q

The marginal decision rule for Apple farmers. Given the market price of P one,B is the—— curve? (B is horizontal straight.)

A

Demand

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9
Q

Profit maximization for fabulous fins, flower firm in the short run. The ATC curve is represented by.

A

 Curve in the top switched shaped curve

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10
Q

And a long run equilibrium, economic profits in a perfectly competitive industry are

A

Zero

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11
Q

Jennifer Sunglass hut operates in a perfectly competitive industry and has standard cost curves. The variable cost at Jennifer Sunglass hut increases, so all the cost curves except fixed cost shift upward. The demand for Jennifer sunglasses does not change and what is the firm shut down. To maximize profit after the variable cost increases Jennifer Sunglass hut will.——its price and—— it’s levels of production

A

Not change, decrease

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12
Q

In the short run, if P= ATC, a perfectly competitive firm

A

Produces the optimal quantity of output and earns zero economic profit

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13
Q

The perfectly competitive organic produce farm. The figure shows a perfectly competitive firm that faces demand curve D and maximizes profit. The farms economic profit in the long run will be.

A

Zero dollars

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14
Q

Prices, cost curves, and profits for Brianne’s best Bree. Brianne owns briannes best brie, a perfectly competitive firm that produces artisanal cheeses. If the price of Bree is P1 and the firm is profit, maximizing, then the firm.

A

Shut shut down because marginal cost is lower than average total cost and AVC

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15
Q

Computing. Monopoly profits for Exxon Mobil gas. Producing a Point and would.

A

Not the profit maximizing, sense at this output. MR is less than zero and MC is greater than zero.

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16
Q

Market in which there is one buyer is

A

A monopsony

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17
Q

The profit maximizing output in price and the monopoly diamond market. Assume that there is no fixed cost and that AC equals MC equals $200 if this were a perfect competitive industry, total surplus would be.

A

$6,400

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18
Q

Monopoly with a linear demand curve. If this market, perfectly competitive, instead of a monopoly, the deadweight loss would be given by the area.

A

There would be no deadweight loss

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19
Q

The profit, maximizing output and price in the monopoly diamond market. Assume that there is no fixed cost and that AC equals MC equals $200. At the profit, maximizing output, and price for a perfectly competitive industry, economic profits, for firms in the industry is.

A

Zero dollars

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20
Q

Critics of college, athletic organizations, such as the national college, athletic association, argue that these organizations monopolize college athletes, and prevent student athletes from earning money while in college. If this is true, what type of entry barrier exist under such a scenario?

A

Control of a scarce resource or input

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21
Q

In general economists are critical of monopoly when there is/are

A

No natural monopoly

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22
Q

Monopoly is an industry structure characterized by

A

Barriers to entry and exit

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23
Q

Electricity is an industry with sizable fixed costs and substantial economies of scale. That’s in the electric industry.

A

Large companies are more profitable than small companies

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24
Q

A—— gives an inventor a temporary monopoly on the use or sale of an invention

A

Patent

25
Q

A monopolist response to an increase in demand by——-price and——-output

A

Increasing, increasing

26
Q

Monopoly model in the market for electricity. When the firm is in equilibrium, maximizing, economic profits, its profit is represented by

A

SPDB, the rectangular area below the demand curve, but up bum of the average total cost and marginal cost curves

27
Q

Pay-per-view movies on Xfinity cable II. The figure shows the demand and marginal revenue curve for on-demand movie rentals on Xfinity cable. Assume that marginal cost an average cost are constant at $40. If the cable company practices, perfect price discrimination, deadweight loss will be.

A

Zero dollars

28
Q

Goods that are subject to net at work externalities tend to

A

Become more valuable to individuals as more people use them

29
Q

Assume that a monopoly firm is currently incurring economic losses. If a permanent change in fixed cost lowers average total cost below the demand curve:

A

The monopoly will earn economic profits.

30
Q

Apple sets prices for its new line of iPad, and Microsoft, Dell and HP follow. This practice is known as.

A

Price leader ship

31
Q

Payoff matrix for Antojito and Carolina reaper. The combined profit for Carolina reaper an antiojito is maximized on Carolina reaper produces.——— and antojito produces—-.

A

Lower quantity, lower quantity

32
Q

Oligopoly pricing strategy, and wireless TV market 2. The Nash equilibrium in the cable TV market occurs when.

A

Both firms set a low price and each earns $90,000

33
Q

Prisoners dilemma for Thelma and Louise. Thelma and Louise are arrested and jailed for bank robbery. Given the payoff matrix in the figure of the dominant strategy for Bonnie is.

A

To confess

34
Q

Industry consists of five firms. Three of the firms each account for 20% of market sales. One from accounts for 25% of market sales and the remaining from accounts for 15% of Marcus’s house. What is the HHI for this industry?

A

2050

35
Q

A dominant strategy equilibrium exists in the game when

A

Every player has a Claire best action that does not depend on the actions of the other players

36
Q

Affirm in an oligopoly knows that it’s—— affects its——-and the reactions of its rivals will affect it.

A

Actions, rivals

37
Q

Monopoly, profits in duopoly markets for sugar. There are only two firms in the sugar industry. It’s from face is an identical demand curve, D1, and the market demand curve is D2. If the two firms collude to maximize their combined economic profits, they was at the market price at.——-and the combined economic profit of the firm would be——.

A

P2 given by the area of the rectangle, P1, P2, and BG.

38
Q

In an oligopoly

A

The actions of one firm depend on the actions of the other firms

39
Q

Payoff matrix for the United States and Canada. Suppose that the United States and Canada, both produce quinoa and each country can earn more profit affect output is limited and the price of king what is high. The dominant strategy for Canada is.

A

High output

40
Q

Are useful indicator in the market structure of an industry is the—— which is the sum of the squares market shares of each firm in an industry

A

Herfindahl Hirschmann index

41
Q

If a firms have an unspoken agreement where I buy firms limit—— they are engaging in——-

A

Competition among themselves, tacit collusion

42
Q

Oligopoly pricing strategy, and wireless TV market II. The noncooperative equilibrium in the cable TV market. Occurs when

A

Both firms set a low price and each are in $90,000

43
Q

Oligopoly pricing strategy, in wireless TV market II. The dominant strategy for next wireless.

A

Is to charge a low price

44
Q

A—— is an industry with only a small number of producers

A

Oligopoly

45
Q

Anthony operates the Halsted Street deli and bagel in downtown Chicago, serving delicious sandwiches and comfort food. The deli industry and monopolistically competitive. Anthony, along with every other deli in town is producing the quantity that maximizes average total cost. Assuming the delis are maximizing profits, the.

A

Number of delis will eventually increase

46
Q

The market for designer boots in monopolistic competition I. The profit maximizing quantity of output is determined by the intersection at point.

A

N

47
Q

Monopolistic competition in the market for specialty watches. I figure represents a monopolistically competitive firm in the long run. The firm will.

A

Exit this market until all remaining firms earn 0 economic profit

48
Q

A monopolistically, competitive firm maximize its profits by producing at a quantity where

A

MR equals MC

49
Q

Short run, and the long run profit in monopolistic competition. And penalty of the Figure The profit maximizing price is P2 and the ATC curve is tangent to the new demand curve. The portion of the ATC that lies to the right of the tangency and continues down to the intersection with MC and ATC indicates.

A

Excess capacity

50
Q

An industry characterized by many competitors, each producing an identical products, with free entry and exit is

A

Perfectly competitive

51
Q

Con sitter, a monopolistically competitive firm. As firms exit the industry, we can see this as.

A

A shift to the right of each individual firms demand curve

52
Q

Advertising is an economically productive activity, and not a waste of resources, because

A

It can convey information about a product(I said it can increase sales)

53
Q

Profit maximization for Domino’s Pizza in monopolistic competition. Suppose that Papa John’s produces a technical innovation that reduces individual franchise cost, so that ATC falls to ATC’ if the franchise produced the competitive up a fourth innovation, it’s optimal price would have been

A

I said $30 and I’m pretty sure it’s $30 but the correct answer is actually $23

54
Q

An industry with a Large The Birth relatively small firm, is producing differentiated products in a market with easy entry and exit affirms is

A

Monopolistically, competitive

55
Q

Profit maximization for Domino’s Pizza in monopolistic competition. Supposed to Papa John’s introduces a Technical innovation that reduces individual franchise cost of the ATC fast to ATC’. If the franchise produced the competitive output before the innovation, its optimal quantity would happen.

A

200 pizzas per day. Where marginal cost crosses demand.

56
Q

Monopolistic competition in the market for cell phones. The firm depicted in the Figure Produce is the output that maximizes profit, minimizes losses. In this case the firm is earning.

A

Economic losses

57
Q

Perfect competition and monopolistic competition in the long run. Which statement is true?

A

Both panels show markets that have many firms

58
Q

Fast food profit in monopolistic competitionII. The profit maximizing quantity of output is determined by the intersection point at

A

K

59
Q

Fast food, profits in monopolistic competition I. The profit maximizing quantity of output is determined by the intersection point at.

A

G

Microeconomics (12 decks)

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