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Microeconomics Test #2

50 Questions  I  By W010lkg
Economics Quizzes & Trivia
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1.  The long run is a perdiod during which:
A.
B.
C.
D.
2.  How long is the short run?
A.
B.
C.
D.
3.  When an additional worker is hired, and all other inputs are unchanged, the increase in output due to that worker is called:
A.
B.
C.
D.
4.  A busniess produces 300 itemsand sells them for $15 each. The total cost of producing the items is $2000 explicit cost and $1000 implicit cost. Economic Profit is?
A.
B.
C.
D.
5.  Ann's furniture factory is experiencing rapid growth in sales. As sales have increased, Ann has found it necessary to hire more workers. However, she has observed that doubling the number of workers has less than doubled her output. What is the likely explanation?
A.
B.
C.
D.
6.  Daisy incurs $7200 per month in fixed costs operating her floral shop. She pays her employees $9.00 per hour and has three assistants each working 120 hours per month. Her other variable costs are $800 per month. What are Daisy's variable costs and total costs each month?
A.
B.
C.
D.
7.  A firm producing 200 units of output at a total cost of $84,000. The firm's fixed cost is $34,000. What is the average variable cost?
A.
B.
C.
D.
8.  Marginal Costs:
A.
B.
C.
D.
9.  When a firm's output is zero:
A.
B.
C.
D.
10.  Examining the four figures below : Pg. 3 Problem 10
A.
B.
C.
D.
11.  If a company  produces only shirts, each shirt would cost $10, if it produces only pants, each pant would cost $20, if it produces both shirts and pants, each shirt would cost $9 and each pant $19. Economists would say that:
A.
B.
C.
D.
12.  For a firm, its LRAC is $50/unit when output is 2000 units/day, but increases to $52/unit when output is 2500 units/day. This is an example of....
A.
B.
C.
D.
13.  The three main criteria used by economists to classify market structures are:
A.
B.
C.
D.
14.  Each firm in perfect competition:
A.
B.
C.
D.
15.  The price elasticity of demand for any particular perfectly competitive firm's output is?
A.
B.
C.
D.
16.  In a perfectly competitive market:
A.
B.
C.
D.
17.  To maximize profits, a perfectly competitive firm should produce:
A.
B.
C.
D.
18.  A profit-maximizing firm should not produce in the short run if:
A.
B.
C.
D.
19.  A perfectly competitive firm is charging in the market price of $18 to sell its product. The firm is producing and selling the proft-maximizing quantity of 50 units at this price. It's average total cost is $17 and its average variable cost is $15. Which of the following statements is then TRUE?
A.
B.
C.
D.
20.  For  a profit-maximizing firm , an additional unit of output should be produced only if:
A.
B.
C.
D.
21.  A competitive firm facing a price of $6 decides to produce 100 widgets. If its marginal cost of producing the last widget is $5, what would you advise the firm to do?
A.
B.
C.
D.
22.  Using graphs on page 5: This firm can make positive profits only in:
A.
B.
C.
D.
23.  Using graphs on page 5; This firm should produce only in:
A.
B.
C.
D.
24.  Using graphs on page 5: This firm should stop production in:
A.
B.
C.
D.
25.  The supply curve of a perfectly competitive firm is:
A.
B.
C.
D.
26.  New reports indicate that eacting spinach causes hairloss. This news shifts the demand curve for spinach leftward. In response, some farms exit the (perfectly competitive) spinach industry. During the period in which these exisiting farms are exiting , the price of spinach___ and the total profit of the remaining farm___.
A.
B.
C.
D.
27.  When economists say that an industry has entry barriers, they mean that:
A.
B.
C.
D.
28.  Which of these could constitute an entry barrier?
A.
B.
C.
D.
29.  The demand curve for a monopoly is
A.
B.
C.
D.
30.  A monopoly:
A.
B.
C.
D.
31.  For a monopolist, marginal revenue is:
A.
B.
C.
D.
32.  If a monopolitst increases output from 4 to 5 by lowering its price from $10 to $9, marginal revenue is :
A.
B.
C.
D.
33.  If MR < MC, the monopolist should:
A.
B.
C.
D.
34.  For the monopolist in the short run , if P > AVC, the output level produced is established at the point where
A.
B.
C.
D.
35.  Market Entry tends to  be restricted under
A.
B.
C.
D.
36.  Compared to the perfectly competitive industry, a monopolist:
A.
B.
C.
D.
37.  One of the major differences between a monopolist and a perfectly competitive firm is that the monopolist has a___ demans curve, while the perfectly competitive firm has a ___ demand curve.
A.
B.
C.
D.
38.  A major difference between profit-maximizing perfectly competitive firms and monopolies in the long run  is the following:
A.
B.
C.
D.
39.  Price discrimination is the practice of charging different prices to:
A.
B.
C.
D.
40.  Price discrimination is not possible unless:
A.
B.
C.
D.
41.  The fact that airlines charge business travelers more for the same airline seat than leisure travelers is an example od ____ discrimination where the carrier charges those with higher demand elasticity a _____fare.
A.
B.
C.
D.
42.  The downward-sloping demand curve for a monopolistically competitive firm:
A.
B.
C.
D.
43.  Under monopolistic competition:
A.
B.
C.
D.
44.  There are many restaurants in Cincinnati, each one offering food and services that differ from those of competitors. There is also free entry if sellers in the market and each seller serves a very small fraction of the total number of meals served each day. The restaurant industry in Cincinnati is best categorized as:
A.
B.
C.
D.
45.  In the short run, a firm in monopolistic competition produces where:
A.
B.
C.
D.
46.  In an oligopoly:
A.
B.
C.
D.
47.  The model that assumes that oligopolies act jointly as if they were monopolists is the:
A.
B.
C.
D.
48.  One difficulty of a cartel is:
A.
B.
C.
D.
49.  The "prisoners dilemma" is the difficulty
A.
B.
C.
D.
50.  The kinked demand curve model assumes that:
A.
B.
C.
D.
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