Economics 2

Economics 2 Chapters 5chapters 6chapters 7chapters 8
  
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for a monopolist the maximizing rate of output occurs where
 
P=MC
rising marginal cost result from
 
falling marginal physical product
which of the following is equivalent to ATC
 
(FC+VC
which of the following are factors of production
 
land labor, capital, entrepreneurship
a firms total variable cost will depend on
 
the prices of variable resourcesthe production techniques usedthe level of output
the change in total output associated with one additional unit of input is
 
the marginal physical product
marginal cost
 
is the change in total cost from producing one additional unit of output
the only cost which do not change with the rate of output are
 
fixed cost
cost of production that change with the rate of outputare
 
variable costs
a u shaped average total cost curve implies
 
first marginal cost below average total cost and then marginal cost above
to the economist total cost includes
 
explicit and implicit costs including a normal profit
economies of scale
 
explain why the average total costs decline as output increases in the long run
the price charged by a profit maximizing monopolist in the long run occurs
 
at a price on the demand curve above the intersection where mr=mc
under perfect competition in the long run
 
both allocative and productive efficiency are achieved
which of the following is consistent with a competitive market
 
zero economic profit in the long run
if economic profits are used in a competitve market in the long run
 
additional firms will enter the marketthe market supply curve will shift to the rightequilibrium price will fall as more firms enter
examples of barriers to entry include
 
patents
in the long run competitive equilibrium prices tend to fall tot he minimum of the firms long run
 
average total cost curve
the demand curve confronting a competitive firm is
 
horizontal while the market demand is downward sloping
the essential characteristic of a perfectly competitive firm is that
 
it is a price taker
for competitive firms
 
price is equal to marginal revenue
the law of diminishing returns states that beyond some point ceteris paribus
 
the marginal physical product of a factor of production diminishes as more of that factor is used
diminishing returns are the result of
 
a rising ratio of variable input to fixed input
short runs profits are maximized at the rate of output where
 
marginal revenue is equal to marginal cost
at the profit maximizing output for a competitive firm
 
marginal cost=price
the marginal cost curve
 
will be affected by changes in the price of factor inputs
slopes upward to the right as output increases
is the short run supply curve for a competitive firm
a competitive firm should expand output when
 
P>MC
WHICH OF THE FOLLOWING IS A CHARACTERISTIC OF A PERFECTLY COMPETITIVE MARKET
 
ZERO ECONOMIC PROFIT IN THE LONG RUN
IN THE LONG RUN COMPETITIVE EQUILIBRIUM MARGINAL COST
 
EQUALS THE MINIMUM OF THE ATC
THE COMPETITIVE FIRM SHOWN IN THE ADJACENT GRAPH
 
SHORT RUN TAKING A LOSS
P=MC FOR FIRMS ONLY IN
 
PERFECTLY COMPETITIVE MARKETS
IF A FIRM DECIDES TO PRODUCE NO OUTPUT IN THE SHORT RUN ITS COST WILL BE
 
ITS FIXED COSTS
WHICH OF THE FOLLOWING IS CORRECT
 
A PURELY COMPETITIVE FIRM IS A PRICE TAKER WHILE A MONOPOLIST IS A PRICE MAKER
THIS FIRM IN THE THE THE GRAPH IS AN
 
PERFECTLY COMPETITIVE MARKET JUST BREAKING EVEN
ALL NATURAL MONOPOLY OCCURS WHEN
 
LONG RUN AVERAGE COSTS DECLINE CONTINUOUSLY THROUGH THE RANGE OF DEMAND
WITH RESPECT TO THE PURE MONOPOLIST S DEMAND CURVE IT CAN BE SAID THAT
 
PRICE EXCEEDS REVENUE AT ALL OUTPUTS GREATER THAN 1
A MARKET WITH ONLY THREE OR FOUR DOMINANT FIRMS IS CALLED AN
 
OLIGOPOLY
A MARKET MADE UP OF MANY FIRMS EACH OF WHICH HAS SOME DISTINCT BRAND IMAGE IS CALLED
 
MONOPOLISTIC COMPETITION
TH OPPORTUNITY COST OF WORKING IS THE
 
VALUE OF LEISURE TIME THAT MUST BE GIVEN UP
THE MARGINAL REVENUE PRODUCT OF LABOR IS 3 UNITS PER HOUR PRODUCT PRICE IS CONSTANT AT $12 PER UNIT AND THE WAGE RATE IS $30 PER HOUR THEN
 
AN ADDITIONAL UNIT OF LABOR SHOULD BE EMPLOYED
WHICH OF THE FOLLOWING AFFECTS THE DEMAND OF LABOR
 
THE PRODUCTIVITY OF WORKERS
A FIRM SHOULD HIRE WORKERS UNTIL THE
 
MRP IS EQUAL TO THE WAGE RATE
marginal revenue product
AN UPWARD SLOPING SUPPLY CURVE OF LABOR INDICATES
 
SUPPLY OF LABOR AND THE WAGE RATES ARE DIRECTLY RELATED
DEFINE THE TERM DERIVED DEMAND
 
THE DEMAND FOR LABOR AND OTHER FACTORS OF PRODUCTION RESULTS FROM (DEPENDS ON) THE DEMAND FOR FINAL GOODS AND SERVICES PRODUCED BY THESE FACTORS

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