ECO/365T UOP Tutorials

TUTORIALS

ECO/365T Principles of Microeconomics



ECO/365T Wk 1 ECO/365T WEEK 1 SUMMATIVE QUIZ Camille is at the candy store with Grandma Mary, who offers to buy her $10 worth of candy. If lollipops are $2 each and candy bars are $3 each, what combination of candy can Camille’s Grandma Mary buy her? Answer the question based on the following information: Suppose 30 units of product A can be produced by employing just labor and capital in the four ways shown below. Assume the prices of labor and capital are $2 and $3, respectively. Which technique is economically most efficient in producing A? Which technique is economically most efficient in producing A? Economic systems differ from one another based on who owns the factors of production and: The market system is an economic system that: The market system is also known as: Which of the following statements about self-interest in a market system is false? Which of the following statements about self-interest in a market system is false? Suppose that Julia receives a $20 gift card for the local coffee shop, where she only buys lattes and muffins. If the price of a latte is $2 and the price of a muffin is $1, then we can conclude that Julia A nation can produce two products: tanks and autos. The table below is the nation’s production possibilities schedule. The marginal opportunity cost of the fourth unit of tanks is Assume that a consumer has a given budget or income of $12 and that she can buy only two goods, apples or bananas. The price of an apple is $1.50 and the price of a banana is $0.75. What is the slope of the budget line if the quantity of apples were measured on the horizontal axis and bananas on the vertical axis? A nation can produce two products: tanks and autos. The table below is the nation’s production possibilities schedule. The total opportunity cost of three unit(s) of tanks is Assume that a consumer has a given budget or income of $10 and that she can buy only two goods, apples or bananas. The price of an apple is $1.00 and the price of a banana is $0.50. If the consumer decides to buy 4 apples, how many bananas can she also buy with the remainder of her budget, assuming she exhausts her income? Refer to the diagram. If society is currently producing the combination of bicycles and computers shown by point D, the production of 2 more units of bicycles The following graph is the production possibilities curve of a nation. Which of the following combinations would be unattainable? Which of the following is a characteristic of a sole proprietorship? The following graph is the production possibilities curve of a nation. The total opportunity cost of 4 drill presses is Refer to the diagram. An improvement in technology will Assume the price of product Y (the quantity of which is on the vertical axis) is $10 and the price of product X (the quantity of which is on the horizontal axis) is $5. Also assume that money income is $30. The absolute value of the slope of the resulting budget line is Which of the following is one of the Five Fundamental Questions? A nation can produce two products: steel and wheat. The table below is the nation’s production possibilities schedule. The opportunity cost of producing the 1st unit of wheat is approximately Refer to the diagram. The concept of opportunity cost is best represented by the If the total costs of producing 1,500 units of output is $15,000 and this output sold to consumers for a total of $16,500, then the firm would earn economic profits of The following graph is the production possibilities curve of a nation. Which of the following combinations would be unattainable? Which of the following is one of the Five Fundamental Questions? Which of the following is not a typical characteristic of a market system? Refer to the diagram. If society is currently producing 9 units of bicycles and 4 units of computers and it now decides to increase computer output to 5, the cost Refer to the diagram. An improvement in technology will Private property Refer to the budget line shown in the diagram. If the consumer's money income is $50, the Laissez-faire capitalism limits the government's economic functions to the following, except: One major element of the command system is: The government may impose industrial safety regulations and occupational licensing requirements in which of the following economic systems? In a command system: Which of the following would not be emphasized in a capitalist economy? The government may not implement policies intended to redistribute income in which of the following economic systems? The economies of North Korea and Cuba are: Laissez-faire capitalism is characterized by: By freedom of enterprise, we mean that individual: Capitalism gets its name from the fact that capital resources are mostly: Which of the following statements is correct? In a market system, self-interest is the motivating force that: Which of the following statements about self-interest in a market system is false? Consumers express self-interest when they: Private ownership and property rights in a market system have the following implications, except: Which of the following statements about the right to private ownership is false? Competition is more likely to exist when: Competition in a market system denotes a condition where: Which of the following statements about markets and prices is correct? In a capitalist system, the decisions and actions of millions of consumers and firms are highly coordinated by: All of the following statements describe a market economy except: A characteristic of the market system is: Which of the following does not foster innovation and technological advance? The Heritage Foundation in 2012 ranked which of the following economies to have among the highest economic freedom? A production system where various workers concentrate on different specialized tasks to contribute towards a whole product is referred to as: How does human specialization contribute towards increasing an economy's output? With specialization in a market economy, individual: Which of the following is not a reason why specialization and trade are beneficial to society? A required element for specialization to lead to an increase in the satisfaction of society's wants is: Specialization is beneficial: Which is an example of barter? An economic system in which money is not used is a: Answer the question on the basis of the following production possibilities tables for two countries, North Cantina and South Cantina. Refer to the tables. If North Cantina is producing at production alternative B, the opportunity cost of the eleventh unit of consumer goods will be Refer to the diagram. Flow 3 represents If the total costs of producing 1,500 units of output is $12,000 and this output sold to consumers for a total of $15,000, then the firm would earn economic profits of Assume the price of product Y (the quantity of which is on the vertical axis) is $15 and the price of product X (the quantity of which is on the horizontal axis) is $3. Also assume that money income is $60. The absolute value of the slope of the resulting budget line is Refer to the diagram. The concept of opportunity cost is best represented by the Assume that a consumer has a given budget or income of $24 and that she can buy only two goods, apples or bananas. The price of an apple is $3.00 and the price of a banana is $2.00. For this consumer, the opportunity cost of buying one more apple is The following graph is the production possibilities curve of a nation. The marginal opportunity cost of the fourth unit of bread is Which of the following is a characteristic of a partnership? Apply: The Fundamentals of Economics (Quiz) Includes 30 Quiz Questions and Answers! A+ Work! The opportunity cost of an action is always equal to: Which of the following best describes the opportunity cost of attending a free concert at the local coffee shop? Which of the following most closely relates to the idea of opportunity costs? Economic reasoning is based on the premise that: In the circular flow model, household provide inputs to firms in the ____ and receive __ _____ from firms. In the circular flow model, firms receive ________ from household when households purchase goods and services in the _ ___ Which of the following transactions would take place in the resource market? The fish in the ocean are what type of market resource Which of the following scenarios most accurately reflects the concept of scarcity Bob, the owner of a local deli in town, needs to purchase something that economists would label as “capital” to help him produce sandwiches. Which of the following is an example of capital In the circular flow model of the market system, households Pam sees that the price of bananas has risen in the grocery store. All else equal, she decides to buy more tangerines than she normally purchases. From the information given, you might conclude that: Managers at a local home improvement store see that new home sales in their area have increased. They order more refrigerators for their store. They likely do this because they assume that: At a quantity of 290, marginal benefit equals ______ and marginal cost equals _____. Which of the following examples was used by the authors to explain economics? Mutually beneficial trade is possible when the terms of trade are Gains from specialization and mutually beneficial trade _________ wealth or well-being.\ When studying human behavior, economists assume rational self-interest. This means that people The problems of inflation and unemployment are Which of the following pairs of people was used in describing entrepreneurial ability? Macroeconomics approaches the study of economics from the viewpoint of Which of the following is a labor resource The economizing problem is essentially one of deciding how to make the best use of In analyzing human decision and action, economists assume that The basic truth that underlies the study of economics is the fact that we all face Markets can: Which of the following is something that markets cannot do? True or False. Everyone’s individual demand for a particular good or service can be represented by the same demand curve. True or False. People do not always purchase all of the things they want. Consider each of the following scenarios and determine whether it is an example of the income effect, the substitution effect, or diminishing marginal utility. Which of the following best explains why people eventually stop eating when they dine at an "All You Can Eat" buffet? Use the table below to answer the following question. The marginal cost of producing 3 units of output is Which of the following is the best synonym for “marginal” in economics Which of the following is not a main function of the entrepreneur? The four factors of production (or types of resources) are Which of the following is a land resource The tools and machines used to produce a good or service are what type of market resource? The main function of the entrepreneur is to Marcus budgets $120 a week for groceries. When the price of all food goes up by 10% he buys less salmon. This can best be explained by: Which of the following scenarios is an example of a person interacting outside of a market? Juan likes both hot dogs and burritos. All else equal, when the price of hot dogs rises, he buys more burritos. This can best be explained by: On average, about 3,500 new mobile homes are sold every month at an average price of $40,000. In 2013 average income in the United States rose and, all else equal, mobile home sales decreased. From the information given, it is reasonable to conclude that mobile homes: True or False. Tastes and preferences generally do not change for goods or services in markets. For each situation below, state whether it is an example of the income effect changing quantity demanded or an example of a change in income shifting demand. Identify which of the following scenarios is likely to shift the demand for wheat bread to the right. Executives at an advertising agency want to increase the demand for the energy drink it promotes. What advice should they give the producer? In understanding and analyzing “demand,” we focus on how much of a product the buyers are Which of the following is most likely to decrease the demand for Mango Jarritos, a popular Mexican soft drink? Which example was used to explain scarcity? Prices usually allocate resources efficiently because they allocate If the price of Pepsi decreases, all else held constant, then we’d expect to see a consequent shift of the demand curve for In a market, buyers want to pay the _____ possible price and sellers want to charge the _____ possible price. The horizontal axis of a graph that shows a market demand curve indicates the For most products, purchases tend to fall with decreases in consumers’ incomes. Such products are known as Imagine that the market supply of peaches comes from Georgia (GA) and South Carolina (SC). The supply schedule below shows the quantity of peaches supplied in each state at each price. How many pounds of peaches will be supplied to the market when the price is $6 per pound ______ pounds A market price: Samantha needs to purchase something that economists would label as “labor” to help her produce court documents for her law firm. Which of the following is an example of labor? Maurice needs to purchase something that economists would label as “land” to help him produce cloth to sell to the fashion industry. Which of the following is an example of land? The ability to see a market need and to organize inputs to meet that need is what type of market resource? Which of the following can best be characterized as a subject of macroeconomics? _________ examines economies on a large scale, while __________ examines economic activity on a relatively small scale. Which of the following best explains why people eventually stop eating when they dine at an "All You Can Eat" buffet? Use the table below to answer the following question. The marginal cost of producing 3 units of output is Which of the following is the best synonym for “marginal” in economics Which of the following is not a main function of the entrepreneur? The tools and machines used to produce a good or service are what type of market resource? Marcus budgets $120 a week for groceries. When the price of all food goes up by 10% he buys less salmon. This can best be explained by: Which of the following scenarios is an example of a person interacting outside of a market? Juan likes both hot dogs and burritos. All else equal, when the price of hot dogs rises, he buys more burritos. This can best be explained by: Tastes and preferences generally do not change for goods or services in markets. Executives at an advertising agency want to increase the demand for the energy drink it promotes. What advice should they give the producer? Which of the following is most likely to decrease the demand for Mango Jarritos, a popular Mexican soft drink? Which example was used to explain scarcity? In a market, buyers want to pay the _____ possible price and sellers want to charge the _____ possible price. Imagine that the market supply of peaches comes from Georgia (GA) and South Carolina (SC). The supply schedule below shows the quantity of peaches supplied in each state at each price. In the table, complete the column labeled “Market.” How many pounds of peaches will be supplied to the market when the price is $6 per pound? A market price: Maurice needs to purchase something that economists would label as “land” to help him produce cloth to sell to the fashion industry. Which of the following is an example of land? The ability to see a market need and to organize inputs to meet that need is what type of market resource? _________ examines economies on a large scale, while __________ examines economic activity on a relatively small scale. Consider the circular flow model to answer the questions that follow. In a circular flow model, households provide inputs to firms through the _______ and in exchange receive _______ from firms. In the circular flow model, firms receive _______ from households when households purchase goods and services in the ____________. In the market shown in the table, the marginal cost of 600th unit is _________ The two basic markets shown by the simple circular flow model are ____________. According to the circular flow model, product markets are where __________________. In the circular flow model, households earn their income in the __________. In the resource market __________. Which of the following is a labor resource? Which of the following do economists consider to be capital? The price where marginal benefit equals marginal cost is ________ Marginal cost can be defined as the change in __________. Which of the following scenarios is an example of a person interacting outside of a market? Marcus budgets $120 a week for groceries. When the price of all food goes up by 10% he buys less salmon. This can be explained by ___________. Tastes and preferences generally do not change for goods or services in markets. All else held constant, the law of demand suggests that as _______________ The most important purpose of a market is to _______________. For most products, purchases tend to fall with decreases in consumers’ incomes. Such products are known as ____________ If the price of Pepsi decreases, all else held constant, then we’d expect to see a consequent shift of the demand curve for ________________. When economists say that the demand for a product has decreased, they mean that ___________ In order to derive a market demand curve from individuals’ demand curves, we add up the ____________ If product Y is an inferior good, a decrease in consumer incomes will _________ The concept of a market is a __________ When economist speak of “demand” in a particular market, they refer to ______________. An "increase in the quantity supplied" suggests a: ____________ When the price of a product increases, consumers shift their purchases to other products whose prices are now relatively lower. The statement describes _________ Economists use the term “demand” to refer to _______________ Which of the following scenarios would likely shift the supply of cars to the left (decrease in supply)? Imagine that the market supply of peaches comes from Georgia (GA) and South Carolina (SC). The supply schedule below shows the quantity of peaches supplied in each state at each price. In the table, complete the column labeled “Market.” How many pounds of peaches will be supplied to the market when the price is $6 per pound? Use the figure below to answer the following question. The figure above shows three supply curves for wheat. Which of the following would cause the supply of wheat to shift from S1 to S2? Use the figure below to answer the following question. The figure above shows three supply curves for wheat. Which of the following would cause the supply of wheat to shift from S1 to S3? Use the figure below to answer the following question. The diagram above shows three supply curves for apples. A movement from point a to point b is caused by a change in the ________________. Use the figure below to answer the following question. The figure above shows three supply curves for wheat. Which of the following would cause the supply of wheat to shift from S1 to S2? Use the figure below to answer the following question. The figure above shows three supply curves for wheat. Which of the following would cause the quantity of wheat supplied to increase from point a to point b? When economists say that the supply for a product has decreased, they mean that the ___________ Use the figure below to answer the following question. The diagram shows three supply curves for apples. Which of the following would cause the supply of apples to shift from S1 to S3? All else being equal, if the price of a product decreases, we would expect ______________ Use the figure below to answer the following question. The diagram shows three supply curves for cars today. Which of the following would cause the supply of cars to shift from S1 to S2? An increase in price, all held constant, would cause a change from Suppose that a more efficient way to produce a good is discovered, thus lowering production costs for the good. This will cause The diagram shows three supply curves for apples today. Which of the following would cause the current supply of apples to shift from S1 to S3? A market demand schedule for a product would indicate that: As a result of a decrease in the price of MP3 music, consumers download more songs and buy fewer CDs. This is an illustration of: Which of the following is a determinant of demand? For most products, purchases tend to fall with decreases in buyers' incomes. Such products are known as: Law of Demand Law of Supply How do you tell if there is an increase in demand? A decrease? A change in price will do what to quantity demanded? How do you tell if there is a change in quantity demanded on a graph? Equilibrium price Equilibrium quantity How to tell if there is an increase in supply? A decrease? How do you tell if there is a change in quantity supplied? Shortage Surplus Substitute goods Complimentary goods Price ceilings Price floor Refer to the figure above, which shows three supply curves for corn. Which of the following would cause the supply of corn to shift from S1 to S2? When economists describe "a market," they mean: The horizontal axis of a graph that shows a market demand curve indicates the: There is a shortage in a market for a product when: In order to derive a market demand curve from individuals' demand curves, we add up the: When economists speak of "demand" in a particular market, they refer to: Which of the following is an example of a price ceiling? Refer to the diagram above, which shows three supply curves for corn. A movement from point a to point b is caused by a change in the: Which of the following scenarios is an example of a person interacting outside of a market? A market price: is a price at which buyers and sellers agree to exchange money Use the table below to complete the question. This table represents the demand for peaches in Hoboken, a town in New Jersey. a. Graph the information presented in the table. Instructions: Use the tool provided 'Demand' to plot the line point by point (4 points total). b. If the market price for peaches is $8 per pound, what is the quantity of peaches demanded in Hoboken? The table below represents the demand for bottles of sunscreen at Daytona Beach on a sunny June day. If the price of a bottle of sunscreen is $8, what will be the quantity demanded? Everyone's individual demand for a particular good or service can be represented by the same demand curve. a. Sasha likes to treat herself to a small latte each afternoon. On Wednesdays, when the coffee shop decreases the price of lattes, Sasha buys a large latte instead. b. The price of chicken nuggets rises from $3 to $3.50 for a box of six. The price of hamburgers stays the same. Mateo used to eat chicken nuggets three times a week. All else equal, he now eats them twice a week. c. Jack offers Victoria a plate of a dozen chicken wings. Victoria enjoys the first wing the best, the second wing a little bit less, and by the seventh wing, she has had enough and chooses not to eat the remaining five wings. Which of the following best explains why people eventually stop eating when they dine at an "All You Can Eat" buffet? Marcus budgets $120 a week for groceries. When the price of all food goes up by 10% he buys less salmon. This can best be explained by: Juan likes both hot dogs and burritos. All else equal, when the price of hot dogs rises, he buys more burritos. This can best be explained by: The table below represents the quantity of rice demanded for selected countries Fill in the market quantity of rice demanded (column "Market") for each given price. b. What is the quantity of rice demanded in the market (in metric tons) if the market price is $400 per metric ton? The table below describes the demand for bathing suits on a warm, summer day in the resort town of Wisconsin Dells: b. Due to an influx of tourists, the quantity of bathing suits demanded increases by 15 bathing suits at every price. Complete the column in the table below. c. Graph the new demand curve for bathing suits. Instructions: Use the tool provided 'New Demand' to plot the line point by point (7 points total) on the graph above. The table below shows the quantity of funnel cakes demanded at the West Virginia State Fair. a. Graph the demand curve for funnel cakes. b. On rainy days the demand for funnel cakes at the West Virginia State Fair decreases by 1000 cakes at every price. Complete the table below by filling in the quantity of funnel cakes demanded on a rainy day. c. Graph the new demand curve for funnel cakes. The quantity demanded for cars monthly is shown in the table below. An increase in income increases the quantity demanded by 10% at every price. Which of the following columns represents the new monthly quantity emanded for cars (in thousands of cars)? On average, about 3,500 new mobile homes are sold every month at an average price of $40,000. In 2013 average income in the United States rose nd, all else equal, mobile home sales decreased. From the information given, it is reasonable to conclude that mobile homes: The mean income in Detroit rises and people purchase more homes. b. The price of frozen pizza decreases, making frozen pizza more popular among college students. c. A recession forces many people out of work and more people purchase ramen noodles than before. d. An increase in the price of game consoles decreases sales, as fewer people can afford them. Practice: The Fundamentals of Economics Includes Quiz Questions and Answers! A+ Work! 1. The opportunity cost of an action is always equal to: 2. Which of the following best describes the opportunity cost of attending a free concert at the local coffee shop? 3. Which of the following most closely relates to the idea of opportunity costs? 4. Which of the following transactions would take place in the resource market? 5. The fish in the ocean are what type of market resource 6. Which of the following scenarios most accurately reflects the concept of scarcity? ... and many more Quiz Questions and Answers! Practice: Supply Includes Quiz Questions and Answers! A+ Work! 1. A tax on producers _________ (increases/decreases) the cost of producing. 2. The knowledge, inventions, and innovations that can potentially increase resource productivity are known as __________ (Use one word for the blank) 3. Seller expectations are: 4. The law that states that as the price of a good, service, or resources rises, the quantity supplied will increase, all else held constant, is the law of: 5. A __________ to producers lowers the cost of producing. 6. An increase in supply occurs when: 7. A payment made by the government that does not necessarily require an exchange of economic activity in return is called a ... and many more Quiz Questions and Answers! Practice: Demand Includes Quiz Questions and Answers! A+ Work! In a market: A _______ is an intangible product or action that consumer, firms or governments wish to purchase. Which of the following can increase demand? ______ markets are highly structures, whereas _________ markets are less structures with fewer rules. The demand schedule represents the relationship between the prices of a good, service, or resource: The relationship between the price of a good, service, or resource and the quantity that individuals and firms are willing and able to buy, all else held constant, is graphically represented by a: A demand curve can be drawn as: In most markets, _____ are determined by the interactions of numerous buyers and sellers. For normal goods, Market __________ is based on the overall performances of everyone in the market. The interaction of buyers and sellers in a market is fundamental for the determination of Taste preferences, the number of buyers and buyer expectations are all non-price determinants of ________. When a non-price determinant of demand changes, a change in: _____ are similar goods, services or resources that can take place of another good. The horizontal summation of individual demand curves: The _____________ _______ is the effect that a change in the price of one good, service or resource has on the demand for another. Demand will increase if: Suppose you have $30 to spend on tacos each week. When the price of tacos decrease from $3 to $2, the purchasing power increases from 10 tacos per week to 15 tacos per week. This increase in the quantity of tacos demanded illustrates the _________ ___________. The law of demand states The demand curve shifts when: Products such as generic, store brand dried noodles are considered: The income effect, the substitution effect and diminishing marginal utility explain An increase in consumer income __________ demand for normal goods and ___________ demand for inferior goods. Without individuals and households that are willing and able to buy a good, the ______ side of the market cannot exist. Two different ways in which we usually express information about the demand for a good, service or resource are: When there is an increase in demand The demand curve focuses entirely on the: When eating pizza, you value the 1st, 2nd, 3rd and 4th slices of pizza at $10, $7, $5 and $3 respectively. This decrease in the value you place on each additional slice is called: As the price of a good, service or resource rises: The income effect: The overall or total demand for a good, service or resource is called: The income effect, the substitution effect, and diminishing marginal utility explain: When we talk about the demand for sunglasses, we are referring to the: The demand curve for a normal good is downward sloping because When you plot the data from the demand schedule on a graph, the result is called the demand . An intangible product or action that consumers, firms, or governments wish to purchase is a: The demand curve for a normal good is downward sloping because: When the price of a good rises, we can expect that: Prices and quantities traded are determine by the interaction of buyers and sellers in a _______. Any place where, or mechanism by which, buyers and sellers interact to trade goods, services, or resources is a called a Determine which reason for downward – sloping demand best explains of the examples below. Drag the reason to the example to complete the problem. When a new cupcake store in your town sells giant cupcakes for $5 each, you buy one. When the store puts cupcake on sale for $2.50, you buy two. Your favorite cereal is Frootie – Os. When it is on sale for $2 a box, you buy one. When a box of Frootie – Os is seeling at its regular price of $3.50, you buy the generic store brand instead. Every Friday, you order a pizza for dinner. The first two slices are delicious, and you devour them. The third and fourth slices take you a bit longer to eat, and you do not enjoy them as much. You do not eat a fifth slice In economics, a market describes: A tubular representaiton of the relationship between the price of a good, service, or resource and the quantity that individuals and firms are willing and able to buy, all else held constant, describes the: A demand curve can be drawn as: The _______ effect is the effect that a change in the price of one good, service, or resource has on the demand for another. Suppose that the North American Free Trade Agreement (NAFTA) resulted in a sinble large market for wheat instead of three separate markets in Canada, the Untited States, and Mexico. The demand scheudle below shows the number, in billions, of bushels of wheat demanded per year by each country at four different prices per bushel. Complete the demand schedule for wheat by solving for the quantity of wheat demanded in the new North American market. In a market: Jack like burritos. He values the first burrito at $10.00, the second burrito at $8.00, and the third burrito at $6.00. If the price of burritos is $6.50, Jack will buy _______ burritos. A market cannot exist: When you plot the data from the demand schedule on a graph, the result is called the demand ________ The income effect is the effect that a change in the: When graphing a demand curve, we always place quantity demanded on the ________ axis. The claim that, other things being equal, the quantity demanded of a good falls when the price of that good rises. A table showing the relationship between the price of a good and the amount that buyers are willing and able to purchase at various prices. The amount of a good that buyers are willing and able to purchase at a given price. Apply your understanding of the previous key terms by completing the following scenario with the appropriate terminology. Your friend Becky really struggles with understanding graphs. She shows you the following illustration and asks for your help interpreting it: Fortunately, you recognize that the line on this graph is __________ . When your friend asks you which value represents the quantity of toothbrushes demanded at a price of $5 per toothbrush, you tell her the value represented by the letter ____. Individual and market demand. Suppose that Hubert and Kate are the only consumers of pizza slices in a particular market. The following table shows their annual demand schedules: On the following graph, plot Hubert's demand for pizza slices using the green points (triangle symbol). Next, plot Kate's demand for pizza slices using the purple points (diamond symbol). Finally, plot the market demand for pizza slices using the blue points (circle symbol). Now, suppose that Kate moves away, leaving Hubert as the only consumer in the market. As a result, there will be a ________ the market demand curve because there will be a change in quantity demanded __________. Determinants of demand. The following graph shows the demand curve for sedans (for example, Toyota Camrys or Honda Accords) in New York City. For simplicity, assume that all sedans are identical and sell for the same price. Initially, the graph shows market demand under the following circumstances: Average household income is $50,000 per year, the price of a gallon of regular unleaded gas is $4 per gallon, and the price of a subway ride is $2.00. Use the graph input tool to help you answer the following questions. Demand for Sedans, price of a sedan, quantity demanded. Demand Shifters. Average Income, Price of Gas, Price of a subway ride. Consider the graph. Suppose that the price of a sedan increased from $15,000 to $20,000. This would cause a ___________ of the demand curve. A decrease in average income causes a _______ shift of the demand curve; therefore, you may conclude that sedans are ______ good. Suppose that the price of a gallon of gas falls from $4.00 to $3.00. Because sedans and gasoline are _______, a decrease in the price of a gallon of gas shifts the demand curve for sedans to the _______. Suppose the workers' union negotiates a pay raise. This causes a __________ the supply curve because the pay raise makes cars ___________ . Supply: Basic concepts. Complete the following table by selecting the term that matches each definition. The claim that, all things being equal, the quantity supplied of a good increases when the price of that good rises. A table showing the relationship between the price of a good and the amount of it that sellers are willing and able to supply at various prices. A graphical object showing the relationship between the price of a good and the amount that sellers are willing and able to supply at various prices. The amount of a good that sellers are willing and able to supply at a given price Your boss would like your help on a marketing research project he is conducting on the relationship between the price of juice and the quantity of juice supplied. He hands you the following document: Price of Juice, Quantity of Juice Supplied. Your task is to take this _________ and construct a graphical representation of the data. In doing so, you determine that as the price of juice rises, the quantity of juice supplied increases. This confirms the _________. Individual and market supply. Suppose that Alex and Becky are the only suppliers of ice cream cones in a particular market. The following table shows their monthly supply schedules. On the following graph, plot Alex's supply of ice cream cones using the green points (triangle symbol). Next, plot Becky's supply of ice cream cones using the purple points (diamond symbol). Finally, plot the market supply of ice cream cones using the orange points (square symbol). Now, suppose that Becky's twin brother, who has an identical cost structure and ice cream cones supply curve as Becky, moves to the area, adding another producer to this market. As a result, there will be a ________ the market supply curve because there will be a change in quantity supplied ________. When the price of a good in a market is above equilibrium: If a shortage exists in a market then: Felix pays $20 for a watch from the local department store. Latasha pays $2,000 for one Rolex watch. This ____________ the law of demand. Consider the graph. Suppose that the price of a card increases from $300 to $350. This would cause a ________ the demand curve. A decrease in average income causes a leftward _________ the demand curve. An increase in average taxes causes a leftward _________ the demand curve. Suppose that the price of business parks changes from $1,000,000 to $2,000,000. Because builders could build business parks instead of condos, an increase in the price of business parks shifts the supply curve for condos to the _________. Every year more and more people use word processing software on their various devices. This drives _______ to the ________. When this shift happens, the quantity of word processing software exchanged _________ from one year to the next. Assume that your favorite band is coming to play in your hometown and you want to get tickets. The tickets are priced at $10, and when they go on sale, they sell out almost instantly. The market price in this situation is _________ . Because of the quick sellout, you know that the equilibrium price is __________ the market price. According to the , price and quantity demanded are inversely related. Due to the inverse relationship between the price of a good and the quantity demanded for the good, we expect that the demand curve is: The demand schedule represents the relationship between the price of a good, service, or resource and the quantity that individuals and firms are willing and able to buy, all else held constant, in a According to the law of demand, there is an inverse relationship between____ and quantity demanded. Consider the market for chicken. An increase in the price of beef will: A price floor (support): Which of the following is not a market failure? True or False: A minimum wage below $10 per hour is not a binding minimum wage in this market. An externality arises when a firm or person engages in an activity that affects the well-being of a third party, yet neither pays nor receives any compensation for that effect. If the impact on the third party is _________, it is called a ________ externality. Public goods are sometimes funded voluntarily, but in other cases, they must be provisioned through alternative means. For example, the government approach to providing public goods is usually to: Market failure associated with public goods A group of university students buys coconuts from a farmers' market. The students consume the meat of the coconuts for food and use the shells to make sculptures. These sculptures are placed in a public park that any student can visit. The park sustains itself through students' donations. Some individuals have no incentive to donate to the park and will, instead, depend on those who do donate. This is an example of which of the following? Jonas was willing to contribute $50 this year to his local college radio station. However, after learning that the radio station already had met its goal of raising $400,000, he decided not to contribute, because he knew he could listen to it without contributing. This is an example of: The government copayment plan might lead to an efficient outcome if visits to the doctor's office generate external __________. Which of the following are reasons for the demand curve sloping downward? Multiple select question. The market demand represents: What is a graphical representation of the relationship between the price of a good, service, or resource and the quantity that individuals and firms are willing and able to buy, all else held constant, called? The demand curve shifts when: The income effect is the effect that a change in the: A normal good, as opposed to an inferior good, is a good for which: A demand curve is graphed by plotting: For which type of good is there an inverse relationship between the demand for the good and income? The overall or total demand for a good, service, or resource is called ________ (one word) demand. Market is based on the overall preferences of consumers in the market. The _____________ demand represents the horizontal summation of individual demand curves. Tastes and preferences, the number of buyers, and buyer expectations are: Other things held constant, the demand curve will shift when: The perceived desirability of consuming a good, service, or resource refers to the_____ of buyers. A good for which there is a direct relationship between the demand for the good and income is a(n) _________ good. For which type of goods does an increase in income decrease demand and a decrease in income increase demand? Market demand is based on the: Tastes and preferences, the number of buyers, and buyer expectations are all ____. The perceived desirability of consuming a good, service, or resource refers to the ______ and preferences of buyers. Practice: Fundamentals Includes Quiz Questions and Answers! A+ Work! 1. Capital is sometimes divided into two categories __________ capital and _____________ capital. 2. A Society's ability to produce needed goods and services is permanently reduced if it 3. ______Capital refers to the knowledge and skills that people acquire to increase productivity. 4. The value of the opportunity that you give up when you choose one activity instead of another. 5. Rational decision making is based on three assumptions. 6. the marginal cost of an activity can be found by calculating the change in: ... and many more Quiz Questions and Answers! Discussion Questions (Includes Answers for all DQ's listed below) Discussion Question: The Law of Supply and The Law of Demand Define the law of supply and the law of demand. Discuss how market supply differs from individual supply and explain the difference between individual demand and market demand. Discussion Question: Ten Principles of Economics Includes 3 Full Answers! A+ work! Discuss the Ten Principles of Economics. Discussion Question: Law of Supply Includes 3 Full Answers! A+ work! Describe the Law of Supply. What is the difference between a movement along the supply curve and a shift in the supply curve? Discussion Question: Law of Demand Includes 3 Full Answers! A+ work! Describe the Law of Supply. What is the difference between a movement along the curve and a shift in the curve? Discussion Question: Externalities Includes 3 Full Answers! A+ work! What does the saying, " Theres no such this as a free lunch" mean?


ECO/365T Week 2 Get the Full Week 2 of UOP Tutorials Including: Apply: Market Dynamics and Efficiency Includes Quiz Questions and Answers! A+ Work! The demand and supply schedules for sunscreen at a small beach are shown below. a. If the price is $15 per bottle, how many bottles of sunscreen are demanded and supplied? Qd = _____ bottles. Qs = ______bottles. In this case, there would be _______ pressure on the price. What is the equilibrium price and quantity in the market for sunscreen? P = $ ______ Q = _____ bottles If the output level is Q1, then the sum of the consumer and producer surplus is Graphically producer surplus is measured as the area The monthly demand and supply schedules for new cars at a large California dealership are shown in the table below. If the dealership is currently charging $25,000 for a new car, at the end of the month there will be: Use the following graph for the milk market to answer the question below. There would be excess production of milk whenever the price is ______________ In competitive markets, surpluses or shortages will Use the following table to answer the question below. There will be a shortage whenever the price is In this competitive market, the price and quantity will settle at There is a surplus in a market for a product when There is an excess demand in a market for a product when Which of the following is an example of a price ceiling? A decrease in demand and an increase in supply will There is a shortage in a market for a product when Assume that the graphs show a competitive market for the product stated in the question. Select the graph above that best show the change in the market for leather coats when leather coats become more fashionable among young consumers. The marginal benefit of an additional beach towel is $12. The marginal cost of producing an additional beach towel is $8. If producers are minimizing the average costs of production, then we can conclude: The additional benefit of producing one more roast beef sandwich at a local deli is $2. The additional cost of producing one more roast beef sandwich is $3. To improve allocative efficiency: Charlie is willing to pay $10 for a T-shirt that is priced at $9. If Charlie buys the T-shirt, then his consumer surplus is Productive efficiency occurs at the point where If the equilibrium wage for fast-food restaurants is $8 and the government enforces a minimum wage of $15 Producer surplus is Consumer surplus is The value that consumers get (from consuming a product) over and above what they actually paid for the product is called A producer’s minimum acceptable price for a particular unit of a good The market supply curve indicates the The minimum acceptable price for a product that producer Sam is willing to receive is $15. The price he could get for the product in the market is $18. How much is Sam’s producer surplus? In the market for a particular pair of shoes, Jena is willing to pay $75 for a pair while Jane is willing to pay $85 for a pair. The actual price that each has to pay for a pair of shoes is $65. What is the combined amount of consumer surplus for Jena and Jane? The difference between the maximum price a consumer is willing to pay for a product and the actual price the consumer pays is called The production of paper often creates a waste product that pollutes waterways. Assume the producer of paper does not directly pay to dispose of the waste in the water. In this case, the price of paper will be _______ the socially efficient price and the amount of paper produced will be _______ the socially efficient amount. Which of the following goods is nonrival? Amanda keeps bees to produce honey. Each hive produces $300 worth of honey each month. The table below shows Amanda’s marginal cost of tending each bee hive and her private marginal benefit, which is equal to the market value of the honey each hive produces. What is the optimal number of hives for Amanda to tend?_____ hive(s). Now suppose that each of Amanda’s bee hives also provides pollination services to surrounding farms and that these services are worth $100 per hive per month. Fill in the external marginal benefit (MBexternal) and the social marginal benefit (MBsocial) columns in the table above. What is the socially efficient number of hives for Amanda to tend if all costs and benefits are considered? ____ hive(s) Which of the following goods is both nonrival and nonexcludable? The two main characteristics of a public good are A public good If there are external benefits associated with the consumption of a good or service If the consumption of a product or service involves external benefits, then the government can improve efficiency in the market by A positive externality or spillover benefit (additional social benefit) occurs A negative externality or spillover cost (additional social cost) occurs when Which of the following situations exhibits a positive externality? When there is a positive externality associated with the market Governments may stimulate the economy to move toward the socially optimal output by External benefits in consumption refer to benefits accruing to those Which of the following is an example of a negative externality? The two main characteristics of a public good are Where there are spillover (or external) benefits from having a particular product in a society, the government can make the quantity of the product approach the socially optimal level by doing the following except If one person’s consumption of a good does not preclude another’s consumption, the good is said to be If supply decreases and demand decreases, equilibrium price will If supply decreases and demand increases, equilibrium quantity will Use the figure below to answer the following question. The equilibrium point in the market is the point at which the S and D curves intersect. Assuming equilibrium price P1, consumer surplus is represented by areas_______. The minimum acceptable price for a product that producer______ Sam is willing to receive is $15. The price he could get for the product in the market is $18. How much is Sam’s producer surplus? Evaluate the set of events below. Determine how the events will impact their respective markets In examining the market for personal computers, a technological improvement reduces the cost of production. The effect of the event will be an ______ , a decrease in ____ As a result, the equilibrium price will _____ and the equilibrium quantity will In examining the market for smart phones, there is a reduction in the number of sellers. The effect of the event will be ______ in ________. As a result, the equilibrium price will ________ and the equilibrium quantity will _______. In examining the market for apps for smart devices, there is a tax levied on the sellers of apps. The effect of the event will be ___________ in __________. As a result, the equilibrium price will _________ and the equilibrium quantity will ________ Select the graph that best shows the changes in demand and supply in the beef market if a new diet fad favoring beef consumption becomes hugely popular, while cattle producers see steeply rising costs of cattle feed. Practice: Market Dynamics and Efficiency Includes Quiz Questions and Answers! A+ Work! 1. The demand and supply schedules for sunscreen at a small beach are shown below. If the price is $15 per bottle, how many bottles of sunscreen are demanded and supplied? 2. The monthly demand and supply schedules for new cars at a large California dealership are show in the table below. If the dealership is currently charging $25,000 for a new car, at the end of the month there will be: 3. Use the following table to answer the question below. There will be a shortage whenever the price is 4. In this competitive market, the price and quantity will settle at 5. There is a shortage in the market for a product when ... and many more Quiz Questions and Answers! Practice: Market Equilibrium and Policy Includes Quiz Questions and Answers! A+ Work! 1. A nonprice determinant of demand is: 2. A minimum legal price at which a good, service, or resource can be sold is a price ______. (Enter one word) 3. All other factors held constant, when a non-price determinant of supply changes: 4. The primary determinant of the quantity demanded by consumers is the: 5. Other factors remaining constant, when the _______ of a good increases, the quantity supplies increases. ... and many more Quiz Questions and Answers! Practice: Market Efficiency Includes Quiz Questions and Answers! A+ Work! 1. All else held constant, at higher prices, producer surplus increases for two reasons: 2. Deadweight loss is the: 3. Producing output at the lowest possible total cost per unit of production is: The difference between the price producers receive for a good or a service and the minimum price they are willing and able to accept is __________ surplus. 4. a maximum legal price at which a good, as service, or a resource can be sold is a: 5. All else held constant, at lower prices, consumer surplus increases for two reasons: ... and many more Quiz Questions and Answers! Practice: Market Failures Includes Quiz Questions and Answers! A+ Work! 1. _______ supply is the supply of a good or service that considers only the private costs of its production. 2. Social supply is 3. For each of the following, determine whether the good is excludable or nonexcludable. 4. The market produces the right goods in the correct amounts, using the fewest resources possible when 5. Not all goods provided by the government are public goods. ... and many more Quiz Questions and Answers! ECO/365T Discussion Questions (Includes Answers for all DQ's listed below) Discussion Question: Discuss how the equilibrium price and quantity change when a change in demand occurs and the supply stays constant, and when a change in supply occurs and the demand stays constant. Discussion Question: Market Equilibrium Includes 3 Full Answers! A+ work! Why is market equilibrium most desirable? Discussion Question: Market Equilibrium As your text suggests, sellers alone do not set prices and buyers alone do not set prices. It is the interaction of buyers and sellers that sets prices. Explain where the market equilibrium occurs. How do we show equilibrium graphically? Share an example from your own experience when the market was not in equilibrium for a product or service. Explain why the market was out of equilibrium (what caused it to be out of equilibrium) and what needed to be done to bring the market back to equilibrium. Discussion Question: Surplus Includes 2 Full Answers! A+ work! Describe Consumer and producer surplus? What do they measure? Discussion Question: International Trade Includes 3 Full Answers! A+ work! Discuss the pros and cons of globalization and international trade. Discussion Question: Externalities Includes 3 Full Answers! A+ work! What are externalities? What are some of the policies against them? Discussion Question: Supply & Demand Includes 3 Full Answers! A+ work! How are the concepts and demand and supply relevant to your employer or a company that you are familiar with?


ECO/365T Week 3 Get the Full Week 3 of UOP Tutorials Including: Practice: Elasticity, Consumer Choice, and Production Includes Quiz Questions and Answers! A+ Work! Which of the following statements is correct? a. Fill in the missing values for marginal utility. Coffee and Sam’s Utility. Tea and Sam’s Utility. b. What is Sam's total utility if he consumes 4 cups of coffee and 3 cups of tea? c. Suppose Sam consumes an additional cup of tea. By how much would Sam's utility increase? The table below shows the utility schedule for a consumer of candy bars. Marginal utility becomes negative with the consumption of the _________ Sean is spending the day at the water park. He paid to enter the park and can use any water ride an unlimited number of times throughout the day. His favorite ride is the Twisty River. Sean's marginal utility of riding the Twisty River the first time is 50 utils. Sean's arginal utility of riding the Twisty River the second time is likely If Sean's total utility begins to decrease after his fifth ride on the Twisty River, we can conclude Suppose instead of an entrance fee that Sean must pay each time he rides the Twisty River. Compared to the entrance fee, Sean will likely ride the Twisty River The decision-making process followed by consumers to maximize utility assumes that Suppose that a firm produces 200,000 units a year and sells them all for $10 each. The explicit costs of production are $1,500,000 and the implicit costs of production are $300,000. The firm earns an accounting profit of and an economic profit of . Use the following table to answer the next question. The total fixed cost of production is Marcel leases a garage. He must pay $800 every week for his lease regardless of how many cars he fixes. The number of cars he fixes each week depends on how many mechanics he hires. The table below summarizes his cost information. Fill in the missing values for total fixed cost, total variable cost, and total cost in the table below. The table below shows the monthly cost of producing vintage model cars for collectors for quantities 0, 100, 200, and 500.Complete the table by filling in the average fixed cost, average variable cost, and average total cost. If average variable cost is $74 and total fixed cost is $100 at 5 units of output, then average total cost at this output level is The table below shows Crystal’s total cost of producing different quantities of tie-dyed t-shirts for a local arts festival. Complete the marginal cost column in the table. Tie-Dyed T-Shirt Production Costs. What is the total cost of producing 5 tie-dyed t-shirts? What is the marginal cost of producing the 5th tie-dyed t-shirt? Use the following figure to answer the next question. At which point does marginal cost (MC) equal average variable cost (AVC)? Which of the following statements is correct? Barney decides to quit his job as a corporate accountant, which pays $14,000 a month, and goes into business for himself as a certified public accountant. He runs his business from his converted garage apartment, which he could rent out for $330 a month if he wasn’t using it as a home office. He must purchase office supplies worth $90 a month, and his monthly electricity bill has increased by $40 now that he is working out of his home office. After six months of working from home, Barney has earned an average of $16,000 per month. What are Barney’s average monthly accounting profits? What are Barney’s average monthly economic profits? Which of the following statements about the intersection of the average variable cost and marginal cost curves is true? Which of the following statements about the intersection of the average total cost and marginal cost curves is true? If the level of output is greater than the point at which the marginal cost curve and the average variable cost curves intersect, it must be the case that If the level of output is less than the point at which the marginal cost curve and the average total cost curves intersect, it must be the case that Suppose you are given the following demand data for a product. Using the regular percentage change formula, what is the price elasticity of demand when price decreases from $9 to $7? When the price of a product is increased 10 percent, the quantity demanded decreases 15 percent. The price elasticity of demand for this product is If the absolute value of the price elasticity of demand for a good is .75, the demand for that good is described as Use the following graph of demand curves to answer the next question. Which demand curve is relatively most elastic between P1 and P2? The absolute value of the price elasticity of demand for a downward-sloping linear demand curve You are the sales manager for a software company and have been informed that the absolute value of the price elasticity of demand for your most opular software is less than 1. To increase total revenues from that product, you should Use the following graph to answer the question below. Using the regular percentage change formula, what is the price elasticity of supply when moving from point A to point B? The supply of product X is elastic if The table below represents how Marco feels about chocolate candy bars. Fill in the missing values for total utility and marginal utility. Suppose Marco currently has two candy bars. You tell Marco you will give him either a soda, which gives him 28 utils of happiness, or two additional candy bars. Which is he likely to prefer? Which best expresses the law of diminishing marginal utility? The decision-making process followed by consumers to maximize utility assumes that Suppose that a firm produces 200,000 units a year and sells them all for $10 each. The explicit costs of production are $1,500,000 and the implicit costs of production are $300,000. The firm earns an accounting profit of and an economic profit of . Use the following table to answer the next question. The total fixed cost of production is The table below shows the monthly cost of producing vintage model cars for collectors for quantities 0, 100, 250, and 500. Complete the table by filling in the average fixed cost, average variable cost, and average total cost. Graph the average fixed cost, average variable cost, and average total cost curves from the data in the table. Practice: Elasticity and Consumer Choice Includes Quiz Questions and Answers! A+ Work! If an increase in the price of pineapple juice of 10% results in an increase in the demand for grape juice of 5%, the cross-price elasticity of demand between pineapple juice and graph juice is: Generic macaroni and cheese is an inferior good, Demand for generic macaroni and cheese is likely to increase when? If nicotine is cigarettes is highly addictive, why would it make economic sense for producers of cigarettes to offer free sample of their products to young adults For which of the following products is demand likely to be the most elastic? An economist recently estimated that for every 1% increase in the price of French fries at fast-food restaurants, 0.44% fewer French fries are sold. This indicates that the demand for fast-food French fries is: Elasticity differs from the slope as a measure of responsiveness to changes in prices because: Total revenue decreases as the price of a good increases, if the demand for the good is Which graph shows the immediate period for supply? To economists, the main differences between “the short run” and “the long run” are that Demand is said to be inelastic when Which product would be an inferior good? The demand schedules for such products as eggs, bread, and electricity tend to be The basic formula for the price elasticity of demand is Answer the next question based on information in the following table. Which product would be an inferior good? The demand schedules for such products as eggs, bread, and electricity tend to be The basic formula for the price elasticity of demand is Answer the next question based on information in the following table. Which product would be an inferior good? The demand schedules for such products as eggs, bread, and electricity tend to be The basic formula for the price elasticity of demand is The law of supply suggest that the price elasticity of supply is Economists distinguish among the immediate period, the short run, and the long run by noting that Use the figure below to answer the following question. The diagram concerns supply adjustments to an increase in demand (D1 to D2) in the immediate period, the short run, and the long run. Supply curves S1, S2, and S3 apply to the The price elasticity of supply measures how If the absolute value of the price elasticity of demand for a good is .75, the demand for that good is described as: Hector would like to buy a new pair of soccer cleats. Hector prefers Adidas to Puma brand soccer cleats. Buy Hector chooses to buy the Puma brand cleats instead. Which of the following reasons for Hector’s choice is consistent with rational consumer choice? The table below represents how Marco feels about chocolate candy bars. Suppose Marco currently has two candy bars. You tell Marco you will give him either a soda which gives him 22 utils of happiness, or two additional candy bars. Which of the following is not an assumption of the decision-making process followed by consumers to maximize utility? Which of the following is an assumption of the decision-making process followed by consumers to maximize utility? Which of the following defines marginal utility? The utility from a specific product is The utility of a good or service In deciding what to buy to maximize utility, the consumer should choose the good with the Total utility is best defined as the The satisfaction or happiness one gets from consuming a good or service is called? Marginal utility is equal to Which of the following statements is correct? Practice: Elasticity Includes Quiz Questions and Answers! A+ Work! Cross-price elasticity of demand uses: The percentage change in the quantity demanded of one good divided by the percentage change in the price of another good is the: Demand is perfectly elastic when the value of the price elasticity of demand is _______. Which of the following statements are true? When there are many substitutes for a good or service, demand tends to be relatively more ______. Economists find elasticity useful because it: The simple formula for the price elasticity of supply is: Suppose that when the price of gasoline is $3.50 per gallon, the total amount of gasoline purchased in the United States is 6 million barrels per day. Also, suppose that when the price of gas decreases to $3 per gallon, the total amount of gasoline purchased is 8 million barrels per day. Based on these numbers and using the simple formula, the price elasticity of demand for gasoline is: ________ elasticity of demand is a measure of how responsive demand is to a change in consumer income. For each pair of goods, determine which one would have a relatively more elastic demand curve (Determine elasticity according to luxury and necessary goods). Airline travel or gasoline: ________ Opera tickets or shoes: ________ Shampoo or manicures: ______ Suppose that the quantity of umbrellas demanded at a price of $8 is 2,500 units. The company’s total revenue is $_______ A price elasticity of demand of -0.75 means that if the price decreases by 10%, the quantity demanded will ________(one word) by_____ (use a number). A price elasticity of demand of -1.25 means that if price decreases by 10% the quantity demanded will_________ by _________. If the price elasticity of demand (\|Ed\|) equals 1.25, the demand is: For each pair of goods, determine which one would have a relatively more elastic demand curve. The slope of a linear demand curve is ______ along the curve. A price elasticity of supply of 0.75 means that if the price increases by 10%, the quantity supplied will________ by 7.5%. Which of the following uses negative and positive values to asses whether goods are substitutes or complements? For each pair of goods, determine which one would have a relatively more elastic demand curve. Cross-price elasticity of demand uses A good for which an inverse relationship exists between the demand for the good and income is a(n)______good. Which of the following uses negative and positive values to asses whether goods are substitutes or complements? A price elasticity of supply of 1.25 means that if price increases by 10%, quantity supplied will __________ by ________ If demand is inelastic,________g prices will increase total revenue. The time periods associated with a set of supply curves include: If Ed = -0.85, the demand is: Multiple choice question. Suppose that the quantity of umbrellas demanded at a price of $10 is 3,000 units. The company’s total revenue is $_________ With cross-price elasticity of demand: Cross-price elasticity of demand is a measure of the responsiveness of a change in the: For each pair of goods, determine which one would have a relatively more inelastic demand curve. Brand-name shoes or all – shoes Ice cream or all frozen treats All chips or potato chips Cross-price elasticity of demand is a measure of the effect of a change in the: Elasticity: A price elasticity of demand that is calculated as -0.61 would be considered inelastic. (use one word for the blank). Generally we calculate elasticity as the: Businesses can estimate the potential changes in the quantity demanded associated with changes in the prices of their products by using: Businesses are interested in the _____________ because it allows them to estimate the potential changes in the quantity demanded associated with changes in the prices of their products. When the product price falls from $80 to $60, the quantity demanded rises from 500 to 800 units. The slope in this range is: Because an inverse relationship exists between the price and the quantity demanded,: The slope of a linear demand curve: If Ed = -1.00, the demand is: When the product price falls from $90 to $80, the quantity demanded rises from 600 to 700 units. The price elasticity of demand is _____. Suppose that when the price of gasoline is $3 per gallon the total amount of gasoline purchased in the United States is 8 million barrels per day. Also suppose that when the price of gas decreases to $2.25 per gallon the total amount of gasoline purchased is 12 million barrels per day. Based on these numbers and using the simple formula, the percentage change in quantity demanded is: When the product price falls from $80 to $60, the quantity demanded rises from 500 to 800 units. Using the simple formula the price elasticity of demand in this range is: If \|Ed\| = 0.25, the demand is: The ________ range of the linear demand curve is relatively more elastic. Which of the following statements are true? The slope of a linear demand curve is: The_________ the change in price, the less reliable the elasticity estimate is going to be. Which of the following are true? Suppose that the quantity of umbrellas demanded at a price of $5 is 2000 units. The company’s total revenue is ________ When the product price falls from $40 to $30, the quantity demanded rises from 500 to 600 units. Using the simple formula, the price elasticity of demand in this range is: The price elasticity of demand as you move along the demand curve. When the product price falls from $80 to $60, the quantity demanded rises from 500 to 800 units. The slope in this range is: Using absolute values in the elastic range of the demand curve,: The greater the change in price,: Using absolute values in the inelastic range of the demand curve,: Suppose that the quantity of umbrellas demanded at a price of $6 is 3,000 units. The company’s total revenue is $______. (Only enter the number; dollar sign is provided.) If demand is elastic,________prices will increase total revenue. When the product price rises from $150 to $200, the quantity demanded falls from 1,000 to 800 units. Using the simple standard (non-midpoint) formula, the price elasticity of demand in this range is: The ______ range of the linear demand curve is relatively less elastic. Along the elastic range of the demand curve,: Along the inelastic range of the demand curve,: If demand is ________, increasing prices will decrease total revenue. The_______ range of the linear demand curve is relatively more elastic. In the (elastic/inelastic) range of the demand curve, the percentage change in quantity demanded is less than the percentage change in price. Practice: Consumer Choice Includes Quiz Questions and Answers! A+ Work! In economics, the satisfaction or happiness received from the consumption of goods and services is known as . Marginal utility is the: The difference between total utility and marginal utility is that marginal utility is the: Systematically thinking about the benefits associated with the consumption of goods and services can: Economists measure utility with a unit called the util, which is _________in nature. The law of diminishing marginal utility states that the (total/marginal) utility associated with the consumption of a good or service becomes (less/more) with each additional unit that is consumed in a given time period. What is the additional satisfaction or happiness received from the consumption of an additional unit of a good or service called? Dave bought a pizza which was divided into five slices. After eating the third slice he couldn't eat the fourth slice. Applying the law of diminishing marginal utility to this scenario which of the following statements is true? T he total satisfaction or happiness received from the consumption of a good or service or a combination of goods and services is known as ______utility; whereas the additional satisfaction or happiness received from the consumption of an additional unit of a good or service is known as ______ utility. Alex is consuming candy bars that cost $1 each. When he purchases the 5th5th candy bar his total utility increases from 6 utils to 8 utils. What is the marginal utility of the 5th5th candy bar? By always selecting the best option after considering all benefits and costs, you will increase your total _______ Diminishing marginal utility means total utility is: Marginal utility may be decreasing when more units are consumed but as long as marginal utility is ________, total utility will increase when another unit is consumed. The law of diminishing marginal utility states that the: You will be able and willing to consume more units only if they become less expensive than the previous units. This is because you derive less and less additional satisfaction from the consumption of additional units of a good or service according to the law of: Even though the price per ounce of popcorn is much lower for the largest size at a movie theater not everyone buys the large bucket of popcorn because: The table below depicts the total utility when consuming cups of coffee. What is the marginal utility of the second cup of coffee? The process of obtaining the greatest level of overall satisfaction or happiness from consuming goods and services subject to consumers' preferences incomes and prices is known as: The marginal utility associated with eating one sub sandwich is 5 utils. The marginal utility of a second sandwich is 3 utils. In this case total utility with the consumption of the second sandwich. Below is a list of assumptions about decision making. What do economists assume when evaluating the utility-maximizing decision-making process? Suppose marginal utility is decreasing when more units are consumed. Which of the following statements is true? Consumers seek to maximize satisfaction based on: The law of diminishing marginal utility helps explain one of the fundamentals behind the law of ______ Not every decision consumers make will turn out to be perfect because consumers can never have all the _______they might need to make the perfect decision. Utility maximization is the process of obtaining the greatest level of: Which of the following is not one of the four assumptions about utility maximization? Consumers seek to maximize (satisfaction/total revenue) based on their preferences, limited incomes, and the prices of the goods and services available to them. Which of the following is true of 'information'? ECO/365T Discussion Questions (Includes Answers for all DQ's listed below) Discussion Question: Compare and contrast the price elasticity of supply and price elasticity of demand, and define income elasticity and how it distinguishes normal and inferior goods. Discussion Question: Economic vs Accounting profit Includes 3 Full Answers! A+ work! What is the difference between economic and accounting profit? Is one method better than the other? Why or why not? Discussion Question: Perfect Competition Includes 3 Full Answers! A+ work! What is perfect competition? Does it exist in the real world? Why or why not? Discussion Question: Monopoly vs Monopolistic Competition Includes 3 Full Answers! A+ work! Compare and contrast monopoly and monopolistic competition. Discussion Question: Oligopoly Includes 3 Full Answers! A+ work! What are the characteristics of an oligopoly? Describe an industry that falls into this market structure.


ECO/365T WEEK 4 Get the Full Week 4 of UOP Tutorials Including: Apply: The Microeconomics of Product Markets Includes Quiz Questions and Answers! A+ Work! A pure monopoly most likely results in productive inefficiency because at the profit-maximixing level of output_______. If you know the total fixed cost is $200, total variable cost is $600, and total product is 4 units, then average total cost must be Which of the following is an example of an oligopolistic market with a standardized product? In which set of market models are there the most significant barriers to entry? Implicit costs are Harvey quit his job at State University where he earned $45,000 a year. He figures his entrepreneurial talent or forgone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $100,000 in bonds that earned 10% interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 11,000 units of software at $75 each. Of the $75, $55 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building. What is the accounting profit generated by Extreme Gaming in the first year? A decrease in the long-run average total cost as output increases is due to What are the likely reason(s) that the market for electricity is not perfectly competitive? Select all that apply Bobby decides to sell lemonade on a hot summer day. If Bobby sell 20 glasses of lemonade for $0.20 per cup, and his average total cost is $0.17, what are his economic profits for the day? A perfectly competitive firm's output is currently such that its marginal revenue is $5 and marginal cost is $4. Assuming profit maximization, the firm should: Use the following graphs for a perfectly competitive market in the short run to answer the next question. The graphs suggest that in the long run, assuming no changes in the given information, Which of the following is not a necessary characteristic of a perfectly competitive industry? At the profit-maximizing level of output, the profit earned by the perfectly competitive firm is given by the area The marginal revenue curve faced by a perfectly competitive firm Which of the following suppliers is most likely to be a monopolist? If a monopolist is able to increase the amount of product she sells from 400 to 420 units by lowering the price of that product from $50 to $45, her marginal revenue is: One feature of pure monopoly is that the firm is _____. The demand curve faced by a nondiscriminating pure monopoly is _____. One major barrier to entry under pure monopoly arises from A nondiscriminating pure monopoly is generally viewed as being _____. A nondiscriminating pure monopoly must decrease the price on all units of a product to sell more units. This explains why _____. Which of the following best represents the pricing behavior of firms in an oligopolistic market? Which of the following best represents the pricing behavior of firms in a monopolistically competitive industry? Assume that in a monopolistically competitive industry, firms are earning economic profit. This situation will attract other firms to enter the industry, causing Use the following graph for a monopolistically competitive firm to answer the next question. If curve (2) represents ATC and line (3) represents demand, then curve (1) and line (4) would be Which of the following is a characteristic of monopolistic competition? Use the following graph for a monopolistically competitive firm to answer the next question. Marginal revenue and marginal cost intersect at point Monopolistic competition is characterized by firms In the long run, the economic profits for a monopolistically competitive firm will be Suppose some firms exit an industry characterized by monopolistic competition. We would expect the demand curve of a firm already in the industry to What is one difference between a firm in a perfectly competitive industry and a firm in a monopolistically competitive industry? Oligopolies are considered to be: Which of the following statements is correct? The table below presents the average and marginal cost of producing cheeseburgers per hour at a roadside diner. What is the monopolist’s profit at the profit-maximizing level of output? A pure monopoly will find that marginal revenue _____. Natural monopolies result from: Which of the following markets is most likely to be perfectly competitive? The market for touring motorcycles Use the following table to answer the next question. Plant sizes get larger as you move from Plant 1 to Plant 4. In the long run, the firm should use Plant 3’s size for what level of output? A perfectly competitive firm will be willing to produce even at a loss in the short run, as long as An industry in which the firm's cost structures do not vary with changes in production will have a long-run supply The ability of Intel to spread product development cost over a large number of units of output arises from Which of the following is an implicit cost of owning and opening a farm? A young Thomas Edison produces and sells 20 light bulbs a week in his dorm room. The parts for each light bulb cost $2.00. He sells each light bulb for $5.00. General Electric offers Thomas an executive job that pays $50.00 a week. Thomas weekly economic profit from making light bulbs is equal to Which of the following is true under conditions of perfect competition? If a firm is a price taker, then the demand curve for the firm's product is In long-run equilibrium, a perfectly competitive firm will operate where price is In perfect competition, the demand faced by a single firm is perfectly Which idea is inconsistent with perfect competition? A perfectly competitive firm does not try to sell more of its product by lowering its price below the market price because Assume a perfectly competitive constant-cost industry is initially at long-run equilibrium. Now suppose that a decrease in market demand occurs. After all the long-run adjustments have been completed, the new equilibrium price A constant-cost industry is one in which Which of the following is a barrier to entry? A pure monopoly will generate an economic profit whenever ____. Many people believe that pure monopolies charge any price they want to without affecting sales. Instead, the output level for a profit-maximizing pure monopoly occurs where ____. Suppose that a firm produces 200,000 units a year and sells them all for $10 each. The explicit costs of production are $1,500,000 and the implicit costs of production are $300,000. The firm earns an accounting profit of __________ and an economic profit of __________. Barney decides to quit his job as a corporate accountant, which pays $10,000 a month, and goes into business for himself as a certified public accountant. He runs his business from his converted garage apartment, which he could rent out for $300 a month if he wasn’t using it as a home office. He must purchase office supplies worth $75 a month, and his monthly electricity bill has increased by $50 now that he is working out of his home office. After six months of working from home, Barney has earned an average of $12,000 per month. What are Barney’s monthly explicit costs? What are Barney’s monthly implicit costs? What are Barney’s monthly economic costs? If all resources used in the production of a product are increased by 20% and total output increases by 20%, then the firm must be experiencing Suppose that you could either prepare your own tax return in 15 hours or hire a tax specialist to prepare it for you in 2 hours. You value your time at $11 an hour; the tax specialist will charge you $55 an hour. The opportunity cost of preparing your own tax return is Fixed costs of production in the short run Monetary payments a firm makes to pay for resources are called If the long-run average total cost curve for a firm is horizontal in a relevant range of production, then it indicates that there Variable costs are An industry in which its firms' cost structures do not vary with changes in production is referred to as a Suppose that the market for corn is perfectly competitive. If corn farmers are currently generating losses, then we would expect that in the long run the market In many large U.S. cities, taxicab companies operate as near monopolies because of_____. economies of scale Pure monopoly refers to_____. Monopolistic competitive firms are productively inefficient because production occurs where A monopolistically competitive firm's marginal revenue curve If monopolistically competitive firms in an industry are making an economic profit, then new firms will enter the industry and the product demand facing existing firms will If you know that when a firm produces 8 units of output, average fixed cost is $12.50 and average variable cost is $81.25, then the average total cost associated with this output level is Practice: The Microeconomics of Product Markets Includes Questions and Answers! A+ Work! In the long run, the economic profits for a monopolistically competitive firm will be Suppose some firms exit an industry characterized by monopolistic competition. We would expect the demand curve of a firm already in the industry to If monopolistically competitive firms in an industry are making an economic profit, the new firms will enter the industry and the product demand facing existing firms will A young Thomas Edison produces and sells 20 light bulbs a week in his dorm room. The parts for each light bulb cost $2.00. He sells each light bulb for $5.00. General Electric offers Thomas an executive job that pays $50.00 a week. Thomas’s weekly economic profit from making light bulbs is equal to: If you know that total fixed cost is $200, total variable cost is $600, and total product is 4 units, then average total cost must be What is one difference between a firm in a perfectly competitive industry and a firm in a monopolistically competitive industry? Oligopolies are considered to be Which of the following statements is correct? Which of the following is an implicit cost of owning and operating a farm? In which set of market models are there the most significant barriers to entry? A pure monopoly most likely results in productive inefficiency because at the profit-maximizing level of output _ If marginal cost exceeds average total cost in the short run, then which is likely to be true? In perfect competition, each additional unit of output that a firm sells will yield a marginal revenue that is A constant-cost industry is one in which Plant sizes get larger as you move from Plant 1 to Plant 4. In the long run, the firm should use Plant 3’s size for what level of output? Cheeseburger Production Costs. The figure below shows the average and marginal cost curves for producing cheeseburgers per hour. a. At a quantity of 25 cheeseburgers per hour, the average total cost of production is ______ and the marginal cost of cheeseburger production Is ________ b. At a quantity of 35 cheeseburgers per hour, the average variable cost of production is ________ and the average total cost of cheeseburger production is________ Cheeseburger Production Costs. The table below presents the average and marginal cost of producing cheeseburgers per hour at a roadside diner. a. At a quantity of 40 cheeseburgers per hour, the average total cost of production is _____ and the marginal cost of cheeseburger production is _______. b. At a quantity of 60 cheeseburgers per hour, the average variable cost of production is ______ and the average total cost of cheeseburger production is _________. Imagine that a firm expands the size of its plant, doubling its total cost of production but more than doubling its output. This situation is known as Implicit costs are The ability of Intel to spread product development costs over a larger number of units of output arises from Harvey quit his job at State University where he earned $45,000 a year. He figures his entrepreneurial talent or forgone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $100,000 in bonds that earned 10% interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 11,000 units of software at $75 each. Of the $75, $55 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building. The explicit costs of Harvey’s firm in the first year were $ A decrease in the long-run average total cost as output increases is due to Bobby decides to sell lemonade on a hot summer day. If Bobby sell 20 glasses of lemonade for $0.20 per cup, and his average total cost is $0.17, what are his economic profits for the day? $ A perfectly competitive firm's output is currently such that its marginal revenue is $5 and marginal cost is $4. Assuming profit maximization, the firm should: An industry in which its firms’ cost structures do not vary with changes in production is referred to as a: Use the following graphs for a perfectly competitive market in the short run to answer the next question. The graphs suggest that in the long run, assuming no changes in the given information, Which of the following is not a necessary characteristic of a perfectly competitive industry? Use the following graph to answer the next question. At the profit-maximizing level of output, the profit earned by the perfectly competitive firm is given by the area The marginal revenue curve faced by a perfectly competitive firm Which of the following suppliers is most likely to be a monopolist? If a monopolist is able to increase the amount of product she sells from 400 to 420 units by lowering the price of that product from $50 to $45, her marginal revenue is: A pure monopoly will find that marginal revenue Demand and Revenues The table below shows the demand and total revenue for a monopolist. Fill in the "Marginal Revenue" column for the various prices and quantities. Which of the following markets is most likely to be perfectly competitive? One feature of pure monopoly is that the firm is: The demand curve faced by a nondiscriminating pure monopoly is One major barrier to entry under pure monopoly arises from A nondiscriminating pure monopoly is generally viewed as being A nondiscriminating pure monopoly must decrease the price on all units of a product to sell more units. This explains why Which of the following best represents the pricing behavior of firms in an ___________ market? Which of the following best represents the pricing behavior of firms in a ____________ competitive industry? Assume that in a monopolistically competitive industry, firms are earning economic profit. This situation will attract other firms to enter the industry, causing Use the following graph for a monopolistically competitive firm to answer the next question. If curve (2) represents ATC and line (3) represents demand, then curve (1) and line (4) would be Which of the following is a characteristic of monopolistic competition? Monopolistic competition is characterized by firms Use the following graph for a monopolistically competitive firm to answer the next question. Marginal revenue and marginal cost intersect at point = A perfectly competitive producer is a Baker Street’s Costs and Revenues. The table below shows the total cost (TC) and marginal cost (MC) for Baker Street, a perfectly competitive firm producing different quantities of apple pies. The market price of apple pies is $4.00 per pie. Fill in the marginal revenue (MR) and average revenue (AR) columns. At the market price of $4.00 per apple pie, how many apple pies should Baker Street make? If the market price for apple pies were to rise to $6.00 per apple pie, how many apple pies should Baker Street make? Fill in the marginal revenue (MR) and average revenue (AR) columns. ____apple pies, _____apple pies The graph below depicts the revenue and cost curves for Pike’s Flower Shop. What is the market price for a bouquet of flowers? What is the profit-maximizing level of output for Pike’s? What is Pike’s weekly profits at the profit-maximizing level of output? At what market price is a normal profit generated? What are the likely reason(s) that the market for electricity is not perfectly competitive? Select all that apply Use the following graphs for a perfectly competitive market in the short run to answer the next question. A perfectly competitive firm will be willing to produce even at a loss in the short run, as long as______ The table below shows the demand and total revenue for a monopolist. Fill in the "Marginal Revenue" column for the various prices and quantities. The demand curve faced by a nondiscriminating pure monopoly is Use the following graph for a monopolistically competitive firm to answer the next question. Marginal revenue and marginal cost intersect at point = Ali’s Wheat Production Costs. If the market price is $84.85 per bushel of wheat, and Ali chooses to produce wheat, how much will he produce per month to maximize his profits in the short run? Calculate Ali’s monthly profits (express a loss as a negative number) if he chooses to produce the profit-maximizing quantity of wheat at a price of $84.85. Assume that the market price of wheat falls to $22.85 per bushel. How much wheat will Ali choose to produce per month in order to maximize his profits in the short run? Calculate Ali’s monthly profits (express a loss as a negative number) if he chooses to produce the profit-maximizing quantity of wheat at a price of $22.85. Determine whether the following firms operate in an industry that is considered a perfectly competitive market or pure monopoly. a. Katherine's Orchard sells apples in Washington, a state in which many orchards are selling similar apples. b. The Station operates a gas station in a small town, with no close competitors for miles. c. Moe's Service Center is the only service station in town to offer brand name tires. d. The Coffee Shop offers coffee for the market price. It is unable to charge any price above the market price or customers will purchase coffee from a competitor. Use the following graphs to answer the next question. Which of the above shows the correct relationship between demand and marginal revenue for a pure monopoly? The table below shows the marginal revenue and costs for a monopolist. What is the monopolist’s profit at the profit-maximizing level of output? The figure below shows the demand, marginal revenue, marginal cost, and average total cost curves for a monopolist. For this monopolist, the profit-maximizing quantity is ___ units and the profit-maximizing price is $_____. Use the following graph to answer the next question. What is the difference between the perfectly competitive equilibrium level of output and the pure monopoly equilibrium level of output? One difference between monopolistic competition and pure competition is that Acme Anvils has a newly patented anvil that is ready for the market. While there are plenty of other anvil producers, Acme’s anvils are unique. Past models have been featured in a number of animated short films over the years. The weekly demand and cost information for Acme Anvils are described in the graph below. To maximize its profits, Acme should produce _______ and charge a price of ____ per anvil. At its profit-maximizing level, Acme's weekly profits are________ per week. Even though Acme has a patent on its particular type of anvil, there are many other potential anvil makers out there. Which of the following is most likely to happen in the long run? Practice: Perfect Competition Includes Quiz Questions and Answers! A+ Work! When consumers are relatively sensitive to changes in price, demand is considered relatively __________. The decision to shut down temporarily is a _____-run decision, while the decision to exit an industry can be made only in the _______ run. If an economy is going to produce the goods and services most wanted by society, competitive firms: Economic profit creates an incentive for other perfectly competitive firms to ______ the market. The demand for a perfectly competitive firm’s product is a horizontal line originating at the _____________. The marginal cost is the: When it shuts down temporarily in the short run, a perfectly competitive firm: In a perfectly competitive market, we assume the products are ________ in the minds of consumers. As the market price decreases, all else held constant, a profit-maximizing firm can _________(increase/decrease) its production. Economic profit equals The table below shows the total cost of producing tables. Using the information, fill in the blanks for marginal cost. Firms that take or accept the market price and have no ability to influence that price as known as ________ takers. Profit equals __________ revenue minus _______ cost. Assuming the market price is $5 per unit of output, the firm’s marginal revenue curve The graph shows a perfectly competitive firm’s marginal cost curve. At a market price of $5 per unit, to maximize profits, the firm should produce ______ units. The graph shows a perfectly competitive Firm’s marginal cost curve. Suppose the market price decreases to $4 per unit. The firm’s marginal revenue curve At the new market price of $4 per unit, to the firm should produce ______ units of output. The graph shows a perfectly competitive. Firm’s marginal cost curve perfectly competitive firm should produce output until _________________ Normal profit is also known as zero ___________ profit. In a perfectly competitive market, homogeneity means that firms must charge the market price for the goods or the services they produce, because: Zero ___________profit is when the firm’s revenue equals its operating costs without a loss. The demand for a perfectly competitive firm’s product is a ________ (vertical/horizontal) line originating at the market price. Pete’s paper is a small company that produces office paper in a perfectly competitive market. Many other small companies like Pete’s Paper produce the exact same type of paper. The market price of office paper is $50 per case. The schedule below shows daily costs for Pete’s Paper. Complete the schedule. To maximize profits at the market price of $50 per case, Pete’s Paper should produce ____ cases of office paper each day. Suppose a decrease in the market demand for office paper causes the price of office paper to decrease to $40 per case. To maximize profits, Pete’s Paper should now produce ____ cases of office paper per day. Extra or additional revenue associated with the production of an additional unit of output is the In a perfectly competitive market, a single firm is a price taker, and therefore, can only charge the _________ price. Average revenue is the: Total profit equals _______ revenue minus ________total cost) multiplied by output. A market structure characterized by the interaction of large numbers of buyers and sellers, in which the sellers produce a standardized, or homogeneous, product is known as: Total revenue minus the implicit and explicit costs of production is ________ profit. Total revenue minus the _______ and ___________ costs of production is economic profit. A perfectly competitive firm will incur its total _________ cost of production when it shuts down temporarily in the short run. In the long run, Consider the graph below. If the market price is $11, this firm should produce _______ units of output. If the market price is $7, this firm should produce _______ units of output. For a perfectly competitive firm, the market price is equal to: All firms maximize profits by producing the quantity of output at which the marginal _________ is equal to the marginal __________. A firm sustains a loss if The graph shows the marginal cost (MC) and the average total cost (ATC) curves for a typical firm competing in the perfectly competitive market for office paper. The firm can produce up to 100 cases of paper per day. The marginal cost and the average total cost of paper are also shown in the If the market price is $6.50, the firm will If the market price is $5.50, the firm will The market condition in which firms do not face incentives to enter or exit the market and firms earn a normal profit is known as long-run equilibrium. (Remember, enter only one word in the blank.) Suppose Carl’s Candies sells 100 boxes of candy for $4 each. The total fixed cost of the 100 boxes is $100, and the average variable cost of the 100 boxes is $1.50 per box. Carl’s makes a profit per unit of: Identify the characteristics of a perfectly competitive market (Select all that apply). Identify the conditions that guarantee consumers will enjoy the lowest prices possible. Practice: Production Includes Quiz Questions and Answers! A+ Work! Susan provides transcription services for clients who need audio and video transcribed into written documents for legal purposes. Her cost curves are shown below, with the quantity of her work expressed as hours of content transcribed per week. Susan’s minimum average total cost is $____ per hour. At the level of work that minimizes her average total cost, Susan’s marginal cost is $____. Susan’s average variable cost is minimized when she transcribes ______ hours. Susan’s average total cost is minimized when she transcribes _______ hours. Zero accounting profit means that the value of economic profit is _______ Which of the following is true of economic costs? In making a decision about how much output it should produce to maximize its profits, which two pieces of information does a firm need? Explicit costs are also known as _________ (accounting/opportunity) costs. A curve showing the lowest average total cost possible for any given level of output when all inputs of production are variable is the ____-run average cost curve. ________ of scale is a condition in which the long-run average total cost of production decreases as production increases. Variable cost per unit of output produced is: The opportunity costs of using owned resources are _______ costs. Total revenue equals: The cost associated with an additional unit of output is called _______ (marginal/average) cost. The shape of the marginal cost curve id dependent on the Positive ____________ profits encourage more firms to enter the market to produce goods and services. Total cost equals total _________ cost plus total variable cost. (Remember, enter only one word per blank.) Costs that do not change with the amount of output produced are ______ costs The long run is: Costs that change with the amount of output produced are _______ (variable/fixed) costs. In the graph above, the average fixed cost is shown by curve _______; the average variable cost is shown by curve ________; the average total cost is shown by curve ________; and the marginal cost is shown by curve ______. A curve showing the ______ total cost for different levels of output when at least one input of production is fixed, typically plant capacity, is the short-run average cost curve. A condition in which the long-run average total cost of production remains constant as production increases is called: A curve showing the lowest average total cost possible for any given level of output when all inputs of production are variable is the ____-run average cost curve. ________ of scale is a condition in which the long-run average total cost of production decreases as production increases. Variable cost per unit of output produced is: The opportunity costs of using owned resources are _______ costs. Total revenue equals: The cost associated with an additional unit of output is called _______ (marginal/average) cost. Zero accounting profit means that the value of ______ profit is negative. Total cost divided by the amount of output produced is equal to: The table below shows the total cost of producing tables. Using the information, fill in the blanks for the marginal cost The vertical distance between the average _____ cost and the average _____ cost curves should get smaller as more output is produced. Total revenue minus the total _____ costs of production is accounting profit. When the marginal cost is above the average cost, the _______ cost should be increasing. The fixed cost per unit is equal to: Total revenue minus the total ____ and total ____ costs of production is economic profit. Monetary payments made by individuals, firms, and governments for the use of others’ land, labor, capital, and entrepreneurial ability are _____ costs. The costs associated with the use of resources are called: _____ cost equals total fixed cost plus total variable cost. When the marginal product increases, the marginal cost of production ________. Suppose a snowboard manufacturer increases it output by 1 snowboard per day. As a result, the total cost of producing snowboards each day rises from $120 to $145. The marginal cost of producing an extra snowboard is $_______ Diseconomies of scale is a condition in which the long-run average total cost of production _______ (increases/decreases) as production increases. Frank owns a furniture business that makes wooden tables and chairs. One table and four chairs make one kitchen set, which Frank sells to retail furniture stores. The graph below shows Frank’s long-run average total cost curve. If Frank expands production from 400 to 450 kitchen sets, he experiences _________________. If Frank expands production from 50 to 100 kitchen sets, he experiences _________________. Marginal values drive average values because: Frank’s production exhibits constant returns to scale between_____ and ______ kitchen sets. What is Frank’s minimum-efficiency scale? That is, how many kitchen sets does he have to produce to reach the minimum long-run average total cost? Economies of scale can result from a variety of factors, including: Economic profit consists of _______; accounting profit consists of ________. he shape of the long-run average total cost curve can differ for different types of firms, depending on: A person who has been managing a dry cleaning store for $30,000 per year decides to open his own dry cleaning store. The expenses are $35,000 for salaries (excluding the owner’s), $10,000 for supplies, $8,000 for rent, $2,000 for utilities, and $5,000 for interest on a bank loan. The explicit costs include: A company currently producing 10 air conditioners each day has daily total costs of $1,500. Producing an additional air conditioner will increase costs by $250 daily. What are the total daily costs for the firm if they produce the 11th air conditioner? What is the total cost of production associated with the 3rd raincoat? For quantities occurring before the marginal cost curve and average total cost curve intersect, the average total cost curve will be: The average total cost curve is: The extra or additional cost associated with the production of an additional unit of output is the _________cost. Suppose a snowboard manufacturer increases its output by 1 snowboard per day. As a result, the total cost of producing snowboards each day rises from $100 to $110. The marginal cost of producing an extra snowboard is When examining the cost curves for a firm, the minimum average variable cost occurs at the output level where: Practice: Pure Monopoly Adaptive Includes Quiz Questions and Answers! A+ Work! The celebrity should autograph ______ pictures to maximize her profits. Due to the market inefficiencies created by ________, one of the roles of government is to limit their market power or even to eliminate them entirely. For each of the following markets, determine whether the market can reasonable be characterized as a monopoly. Satellite radio, wheat, cereal, tap water in a city, admission to Yellowstone Park. The value of the _______ surplus that is forgone when a market is not allowed to adjust to its competitive equilibrium is the deadweight loss. Which of the following is not a characteristic of monopoly? Consider the graph shown below for a monopolized market. The monopoly output level is ______ units; and the price charged by the monopoly is $_______. As the market price decreases, all else held constant, a profit-maximizing firm will _____ its production. The graph shows the marginal cost (MC) and the average total cost (ATC) curves for a typical firm operating in a monopoly market for specialized goods. The firm can produce up to 100 cases of paper per day. The marginal cost and the average total cost of paper are also shown in the accompanying schedule. If the price of output is $5 per unit, and if the firm should produce_____ units of output. When producing at this profit-maximizing level of output, the firm will have a total loss of $____. The graph shows the marginal cost (MC) and the average total cost (ATC) curves for a typical firm operating in a monopoly market for specialized goods. The firm can produce up to 100 cases of paper per day. The marginal cost and the average total cost of paper are also shown in the accompanying schedule. If the firm shuts down its operations in the short run, the total dollar value of the loss will be $_____. If the price of output is $5 per unit, in the short run, the firm should_______ Given the information in the TABLE and GRAPH TABS, the total fixed cost faced by the firm is $______. The level of profit that occurs when total revenue is equal to total cost is known as ______ profit. Productive efficiency is: For a monopoly, the marginal revenue is below the demand curve because: Tina owns the only bakery in town and operates as a pure monopoly. She set the price of a loaf of bread at $5 per loaf and sells 20 loaves. It costs her $3 per loaf to produce. Tina’s total revenue is $_____. Total revenue equals: A pure monopoly has the overall market _______ to itself, because it is the only seller in a market. For the profit-maximizing level of output, the price charged by a monopoly is not just different but greater than marginal______. Revenue. The extra or additional revenue associated with the production of an additional unit of output is the _________ revenue. Which of the following are characteristics of a contestable firm? When a firm has a loss, the total_____ is less than the total _____. A market structure characterized by a single seller is a ______. Total revenue minus the _____ costs and ______ costs of production is economic profit. If the marginal revenue associated with selling one more unit of output is positive, the demand is: _______ markets maximize the availability of goods and services and the consumers’ ability to buy them. Allocative efficiency occurs when the goods and services that are most wanted by consumers are produced in such a way that their marginal ______ equals their marginal _____. Suppose Carl’s Candies sell 100 boxes of candy for $5 each. The total fixed cost of the 100 boxes is $100, and the average variable cost of the 100 boxes is $1.50 per box. Carl’s makes a profit per unit of: Economic profits generated by pure monopolies have two positive impacts on _____ growth. Profit maximization implies that monopoly firms should expand production up to the point where the marginal revenue ________ the marginal cost. True or False. There are important exceptions in which monopolies are actually encouraged to incentivize positive outcomes. The difference between the maximum price consumers are willing and able to pay for a good or service and the price they actually pay is the _____ surplus. Which market structure is characterized by a single seller? Impediments that prevent firms from entering a market or industry are known as: A(n) ___________ produces less output than a competitive firm and therefore is likely to hire less labor. Total __________ equals price times quantity. The marginal revenue is the: A person who invents the ability to time travel will likely operate as a(n) Demand and Revenues for a Monopoly. Using the demand schedule, what is the marginal revenue (MR) for the 10th unit? A pure monopoly is a price maker engaging in _________ competition. Monopolies produce output than competitive markets and are likely to hire labor. Total revenue equals: If a monopoly wants to sell more units, it must _______ the price for every unit it sells. The extra or additional revenue associated with the production of an additional unit of output is the ________ revenue. Total revenue minus the _______ costs and ________ costs of production is economic profit. Demand and Revenues for a Monopoly. Using the demand schedule, what is the total revenue (TR) for the 15th unit? __________ profit is also known as zero economic profit. A pure_________ is a price maker engaging in nonprice competition. When a firm has a loss, the is less than the total . In economics, we refer to a situation in which there is only one firm but no real barriers to entry as a(n) . All firms maximize _______ by producing the quantity of output at which the marginal revenue is equal to the marginal cost. A pure _________ has the overall demand to itself because it is the only seller in a market. Use the demand, costs, and revenues in the table to answer the following question for a pure monopoly. What is the profit maximizing quantity in the pure monopoly? Total revenue minus the implicit costs and explicit costs of production is _________ profit. A pure _________ will charge consumers the price that they are willing and able to pay for the amount of output available. Zero __________ profit is the revenue needed for a company to break even and meet operating costs without a loss. Compared to an unregulated natural monopoly, what is true about the price charged and quantity produced when a natural monopoly is regulated? When a firm has a loss, the total revenue is ________ than the total cost. When output is produced so that the marginal benefit equals the marginal cost, there is _________ efficiency. Profit ___________ implies that monopoly firms should expand production up to the point where the marginal revenue equals the marginal cost. The efficiency loss resulting from a monopolistic market is called a(n) ___________ loss. For the profit-maximizing level of output, the price charged by a(n) __________ is not just different but greater than marginal revenue. Monopolies charge prices __________ than those experienced by consumers in purely competitive markets. The efficiency loss resulting from a monopolistic market is called: A monopoly will charge consumers the price that they are willing and able to pay for the amount of output available which is shown along the ______ curve. Practice: Monopolistic Competition and Oligopoly Adaptive Includes 47 Quiz Questions and Answers! A+ Work! The underutilization of resources that occurs when the quantity of output a firm chooses to produce is less than the quantity that minimizes the average total cost is called _______ capacity. Consider the monopolistically competitive firm represented in the graph. The firm begins in long-run equilibrium, generating a normal profit. Suppose there is a large increase in demand in the overall market, resulting in an increase in demand for this firm’s product. The demand and the marginal revenue curves will Consider the monopolistically competitive firm represented in the graph. The firm begins in long-run equilibrium, generating a normal profit. Once the demand for the firm’s product increases, the new profit maximizing level of output and price for the firm_______ Consider the monopolistically competitive firm represented in the graph. The firm begins in long-run equilibrium, generating a normal profit. With an increase in demand, the firm will generate an economic ______ Consider the monopolistically competitive firm represented in the graph. The firm begins in long-run equilibrium, generating a normal profit. In the long run, other firms will _____ this market. Because the products of monopolistically competitive firms are ______ from other companies in their industry, they face a _____ sloping demand curve. Profit maximization implies that monopolistically competitive firms should expand production up to the point where the marginal revenue equals the marginal cost. The characteristics of an oligopoly competitive market are: Because the products of monopolistically competitive firms are ______ from other companies in their industry, they face a _______ sloping demand curve. Profit maximization implies that monopolistically competitive firms should expand production up to the point where the marginal revenue equals the marginal cost. Oligopolistic firms can influence the prices they are for their products, but their behavior needs to be _______, given that they face other competitors in their industries. Which of the following are the four characteristics of a perfectly competitive market? Monopolistic competition and perfect competition have one main characteristic in common: relatively easy market _______ and ________. Given that oligopolistic firms face other competitors in their markets, their behavior must definitely be _________. The graph shows the marginal cost (MC) and the average total cost (ATC) curves for a typical firm competing in the monopolistically competitive market for frozen foods. To maximize profits, the firm should produce ____ thousand cases of frozen food. To maximize profits, this firm should charge For each of the markets listed below, determine whether the market can reasonably be described as monopolistically competitive. Satellite radio, AM or FM radio, Common salt, Clothing, Shampoo. Normal profit is also known as ______ economic profit. In a monopolistically competitive market, the closer the substitutes are for a product, the more _______ its demand will be; the more rare or unusual a product is, the more ______ its demand will be. Monopolistic competition is a market characterized by: Monopolistically competitive markets: A clear benefit to monopolistic competition for consumers is product_________. For monopolistically competitive firms, branding serves as a signal to _______ about the products they are going to purchase. Which of the following is not a characteristic of an oligopoly? Monopolistic competition and a monopoly are Determine how each of the events listed below would affect the demand curve for food at Steve’s Shrimp Shack, a seafood restaurant operating in a monopolistically competitive restaurant market. The demand could increase or decrease, and it also could be more or less elastic. The number of other restaurants in the area increases. Steve institutes a frequent diner program whereby a customer who visits five times receives a sixth meal free. The number of consumers in the area increases. Impediments that prevent firms from entering a market or an industry are known as Market for Sandra’s Sweets. Referring to the graph, Sandra’s Sweets is a monopolistically competitive firm that produces 120 cakes. This level of production is: Producing output at the lowest possible total cost per unit of production is: Producing the goods and services that consumers most want in such a way that the marginal benefit equals the marginal cost is: What is the strategy of distinguishing one firm’s product from the competing products of other firms called? A(n) ________ profit simply indicates that the firm is doing just as well as it would have if it had chosen to use its resources to produce a different product or to compete in a different industry. What is producing output at the lowest possible total cost of production per unit called? Allocative efficiency occurs when: What is true about firms in monopolistic competition in the short-run? A market structure characterized by a relatively large number of sellers producing a differentiated product, for which they have some control over the price they charge, in a market with relatively easy entry and exit is known as . Because firms have some control over prices, the firm will charge consumers the price they are willing and able to pay for the available output, which is found by projecting the profit-maximizing output level onto the The strategy of distinguishing one firm’s product from the competing products of other firms is called __________ differentiation. Total revenue minus the ____________ and ___________ costs of production is economic profit. In the presence of _______________profits, firms enter a monopolistically competitive market until the market reaches the point at which the firms are generating a(n) _____________ profit; then entry stops and the market settles into its _____________-run equilibrium. implies that monopolistically competitive firms should expand production up to the point where the marginal revenue equals the marginal cost. When monopolistically competitive firms follow the , the result can be economic profits, normal profits, or even losses, depending on market conditions. In monopolistic competition, once you find the profit-maximizing quantity, how do you find the profit-maximizing price? __________ efficiency is producing the goods and services that consumers most want in such a way that the marginal benefit equals the marginal cost. The difference between the economic surplus when the market is at its competitive equilibrium and the economic surplus when the market is not in equilibrium is the: The presence of many monopolistically competitive firms in an industry makes the firm unable to produce enough output to reach the _______ average total cost, so the firms have ________ capacity to produce. _________ competitive firms are able to have some control over the price of their products. Which of the following is not a characteristic of monopolistic competition? Monopolistically competitive firms are unable to product enough output to reach the ______ average total cost because of the presence of other monopolistically competitive firms in the industry. In monopolistically competitive markets, which of the following allow consumers to be more responsive to price changes? If a market is monopolistically competitive and P = $16, ATC = $32, and Q = 80 units, the profit/loss amount at the profit-maximizing quantity is . Deadweight loss is the: Which of the following creates an incentive for other monopolistically competitive firms to enter the market? In an ___________ market, there are relatively few firms and the product is either standardized or differentiated. The monopolistically competitive firm produces _______ output than would be productively efficient. What is true about firms in monopolistic competition in the short-run? In order for a monopolistically competitive firm to produce at a point that is both productively and allocatively efficient, which of the following has to be true about the profit-maximizing quantity? Which of the following laws is designed to prevent firms from engaging in behaviors that would lessen competition in a market? Deadweight loss represents the amount of _________ surplus and __________ surplus forgone because the monopolistically competitive firm charges a price higher than the marginal cost. The strategy of distinguishing one firm's product from the competing products of other firms is called _________ differentiation. In the ________ run, a monopolistically competitive firm will charge a price equal to the average total cost per unit produced. The behavior followed by firms needs to be strategic, given that they face other competitors in their markets. Laws designed to prevent firms from engaging in behaviors that would lessen competition in a market are called: ECO/365T Discussion Questions (Answers Included) Discussion Question: Includes Full Answers! A+ work! Compare the short run and long run for perfectly competitive firms. How do perfectly competitive firms adapt to market changes in the short run? What can perfectly competitive firms expect in the long run in terms of profits? Discussion Question: Includes Full Answers! A+ work! Compare and contrast the characteristics of monopolistically competitive, monopolistic, and perfectly competitive markets.


ECO/365T Week 5 Get the Full Week 5 of UOP Tutorials Including ALL Quiz Questions and Answers! ECO/365T Week 5 Summative Quiz The average variable cost of producing 4 units of output is The following is cost information for the Creamy Crisp Donut Company. Entrepreneur’s potential earnings as a salaried worker = $48,000. Annual lease on building = $20,000. Annual revenue from operations = $280,000. Payments to workers = $118,000. Utilities (electricity, water, disposal) costs = $8,000. Value of entrepreneur’s talent in the next best entrepreneurial activity = $80,000. Entrepreneur’s forgone interest on personal funds used to finance the business = $6,000. Creamy Crisp’s implicit costs, including a normal profit are Suppose that, when producing 35 units of output, a firm’s AVC is $20, its AFC is $6, and its MC is $28. This firm’s The following is cost information for the Creamy Crisp Donut Company. Entrepreneur’s potential earnings as a salaried worker = $48,000. Annual lease on building = $20,000. Annual revenue from operations = $280,000. Payments to workers = $118,000. Utilities (electricity, water, disposal) costs = $8,000. Value of entrepreneur’s talent in the next best entrepreneurial activity = $80,000. Entrepreneur’s forgone interest on personal funds used to finance the business = $6,000. Creamy Crisp’s explicit costs, including a normal profit are Which plant size would produce at the least cost for the 5,000-6,000 range of output? The following is cost information for the Creamy Crisp Donut Company. Entrepreneur’s potential earnings as a salaried worker = $48,000. Annual lease on building = $20,000. Annual revenue from operations = $280,000. Payments to workers = $118,000. Utilities (electricity, water, disposal) costs = $8,000. Value of entrepreneur’s talent in the next best entrepreneurial activity = $80,000. Entrepreneur’s forgone interest on personal funds used to finance the business = $6,000. Creamy Crisp’s accounting profit is Round Things, Inc.’s production process exhibits constant returns to scale. Currently their long-run average cost is $24/unit. If Round Things doubles its use of all inputs, its new long-run average total cost will be Assume that in the short run a firm is producing 100 units of output, has average total costs of $200, and has average variable costs of $150. The firm’s total variable costs are Harvey quit his job at State University, where he earned $58,000 a year. He figures his entrepreneurial talent or forgone entrepreneurial income to be $8,000 a year. To start the business, he cashed in $60,000 in bonds that earned 10 percent interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 15,000 units of software at $60 for each unit. Of the $60 per unit, $50 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building. The implicit costs of Harvey’s firm in the first year were Answer the question on the basis of the following output data for a firm. Assume that the amounts of all nonlabor resources are fixed. Diminishing marginal returns become evident with the addition of the Answer the question on the basis of the following output data for a firm. Assume that the amounts of all nonlabor resources are fixed. The marginal product of the sixth worker is Answer the question on the basis of the following cost data. The marginal cost of producing the fifth unit of output is The following is cost information for the Creamy Crisp Donut Company. Entrepreneur’s potential earnings as a salaried worker = $40,000. Annual lease on building = $25,000. Annual revenue from operations = $420,000. Payments to workers = $150,000. Utilities (electricity, water, disposal) costs = $8,000. Value of entrepreneur’s talent in the next best entrepreneurial activity = $80,000. Entrepreneur’s forgone interest on personal funds used to finance the business = $6,000. Creamy Crisp Donut Company Practice: Resources Adaptive Includes 36 Quiz Questions and Answers! A+ Work! 1. The marginal revenue product curve also represents the resource ________ curve. 2. The change in total product associated with hiring an additional worker is called 3. Which of the following would be considered a decision that is made "at the margin" by a firm? 4. Capital is sometimes divided into _________ and ___________ capital. 5. The marginal revenue product equals the ... and many more Quiz Questions and Answers! Practice: Resource Prices and Utilization Adaptive Includes 35 Quiz Questions and Answers! A+ Work! 1. If a firm in a noncompetitive market wants to sell more units, 2. The _______ wage, is the wage adjusted for prices. 3. Despite the decrease in union membership 4. Some unions: 5. __________ power is the value of a monetary amount expressed in terms of the goods and services it can buy. ... and many more Quiz Questions and Answers! Practice: International Trade Adaptive Includes 37 Quiz Questions and Answers! A+ Work! 1. Given the option of being self-sufficient or trading with others, as long as a_____________ exists, there will be potential for trade to make both parties better off. 2. The size of the quota times the difference between the quota price and the world price is known as the dollar value of: 3. Japan does not have a huge reserve for neodymium and has to import the metal from China. The benefit of international trade that applies in this case is 4. The US, a high-cost producer of oil, imports roughly half of the oil needed to produce the nation's gasoline. The benefit of international trade applies in this case 5. Europeans purchase wine produced in California and Argentina to have greater choice. The benefit of international trade applies in this case is ... and many more Quiz Questions and Answers! Practice: The Microeconomics of Resource Markets & Trade Quiz Includes 50 Quiz Questions and Answers! A+ Work! 1. Stephanie produces earrings. She sells each pair of earrings for $5.00. The table below shows how many pairs of earrings can be produced, depending on the number of workers Stephanie hires. Fill in the "Total Revenue" and "Marginal Revenue Product" columns using the information given. Assume this is a perfectly competitive market. Instructions: Enter your answers as a whole number. 2. Henry bakes loaves of bread, which he sells for $4 each. He is considering purchasing additional mixers (capital) for his bakery. Each additional mixer has the productivity described below. Fill in the "Marginal Product," "Total Revenue," and "Marginal Revenue Product" columns. Assume this is a perfectly competitive market. Instructions: Enter your answers as a whole number. 3. Which of the following scenarios would lead to an increase in the demand for mixers at Henry's bread bakery? 4. The marginal revenue product schedule is 5. The purely competitive employer of resource A will maximize the profits from A by equating 6. A profit-maximizing firm employs resources to the point where ... and many more Quiz Questions and Answers! Apply: The Microeconomics of Resource Markets and Trade Homework Includes 32 Quiz Questions and Answers! A+ Work! 1. If the marginal revenue product (MRP) of labor is less than the wage rate 2. Marginal product is 3. The marginal revenue product schedule is 4. Which of the following scenarios would result in a decrease in the wage rate of solar panel installers and a decrease in the quantity of solar panel installers employed in Billy's town? 5. Which of the following scenarios would result in an increase in the wage rate of solar panel installers and a decrease in the quantity of solar panel installers employed in Billy's town? 6. In a purely competitive labor market, a profit-maximizing firm will hire labor up to the point where the marginal revenue product of labor equals the: 7. An inclusive union ... and many more Quiz Questions and Answers! ECO/365T Discussion Questions (Answer Included) Discuss how competitive markets determine the wage rate and the quantity of labor that should be employed.

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ECO/365T Principles of Microeconomics