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Microeconomics Final Exam

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study guide for Microeconomics final
Jess Todd
Quiz by Jess Todd, updated more than 1 year ago
Jess Todd
Created by Jess Todd about 9 years ago
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Resource summary

Question 1

Question
Marginal product is?
Answer
  • the change in total product divided by the change in quantity of labor
  • total product divided by the quantity of labor
  • always positive
  • unrelated to total product

Question 2

Question
the marginal cost curve first declines and then increases because of...?
Answer
  • increasing, then diminishing, marginal utility
  • the decline in the gap between ATC and AVC as output expands
  • increasing, then diminishing, marginal returns
  • constant marginal revenue

Question 3

Question
The vertical distance between ATC and AVC measures:
Answer
  • marginal cost
  • total fixed cost
  • average fixed cost
  • economic profit per unit

Question 4

Question
ATC is:
Answer
  • AVC-AFC
  • MC+AVC
  • AFC+AVC
  • (AFC+AVC)+Q

Question 5

Question
when the marginal cost curve lies:
Answer
  • above the ATC curve, ATC rises
  • above the AVC curve, ATC rises
  • below AVC curve, total fixed cost increases
  • below the ATC curve, total fixed cost falls

Question 6

Question
the long run ATC curve is often called the firm's....?
Answer
  • planning curve
  • capital-expansion path
  • total product curve
  • production possibilities curve

Question 7

Question
Curve MR is horizontal because:
Answer
  • product price falls as output increases
  • the law of diminishing marginal utility is at work
  • the market demand for this product is perfectly elastic
  • the firm is a price taker

Question 8

Question
at a price of $131 and 7 unites of output:
Answer
  • MR exceeds MC, and the firm should expand its output
  • total revenue is less than total cost
  • AVC exceeds ATC
  • the firm would earn only a normal profit

Question 9

Question
in maximizing profits at 9 units of output, this firm is adhering to which of the following decision rules?
Answer
  • produce where MR exceeds MC by the greatest amount
  • produce where P exceeds ATC by the greatest amount
  • Produce where total revenue exceeds total cost by the greatest amount
  • produce where average fixed costs are zero

Question 10

Question
suppose price declined from $131 to $100. this firm's...?
Answer
  • Marginal-cost curve would shift downward
  • economic profit would fall to zero
  • profit-maximizing output would decline
  • total cost would fall by more than its total revenue

Question 11

Question
we know the firm is a price taker because:
Answer
  • its MC curve slopes upward
  • its ATC curve is U shaped
  • its MR curve is horizontal
  • MC and ATC are equal at the profit-maximizing output

Question 12

Question
the equality that Price (P), Marginal Cost (MC), and minimum Average Total Cost (ATC):
Answer
  • occurs only in constant-cost industries
  • encourages entry of new firms
  • means the "right goods" are being produced in the "right ways"
  • results in a zero accounting profit

Question 13

Question
when P=MC=lowest ATC for individual firms, in the market:
Answer
  • consumer surplus necessarily exceeds producer surplus
  • consumer surplus plus producer surplus is at a maximum
  • producer surplus necessarily exceeds consumer surplus
  • supply and demand are identical

Question 14

Question
which of the following pairs are both "competition-like elements" in monopolistic competition?
Answer
  • price exceeds MR; standardized product
  • entry is relatively easy; only a normal profit in the long run
  • price equals MC at the profit maximizing output; economic profits are likely in the long run
  • the firms' demand curve is downsloping; differentiated products

Question 15

Question
check all that apply to Pure monopoly
Answer
  • sole supplier of a product
  • one of many suppliers of the same product
  • easy entry
  • difficult entry
  • Unique product
  • product has many close substitutes
  • price maker
  • price taker
  • a pure monopoly will be less efficient than pure competition
  • a pure monopoly will be more efficient than a pure competition

Question 16

Question
check all that apply to Monopolistic competion
Answer
  • the only firm or sole supplier of a product
  • one of many firms or suppliers of a product
  • easy entry and exit
  • difficult entry and exit
  • standardized product
  • differentiated product
  • Price maker
  • Price taker
  • efficient
  • not efficient

Question 17

Question
check all that apply to oligopoly
Answer
  • one of many suppliers or firms
  • one of few suppliers or firms
  • easy entry
  • difficult entry
  • price maker
  • price taker
  • efficient
  • inefficient

Question 18

Question
check all that apply to Pure competition
Answer
  • one of many firms or suppliers
  • one of few suppliers or firms
  • standardized product
  • differentiated product
  • price maker
  • price taker
  • easy entry
  • difficult entry
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