Homework: Chapter 15 Homework

Rhonda's Turkey Farm produced 600 turkeys last week. The marginal cost was ​$11 a turkey​, average variable cost was ​$30 a turkey​, and the market price was ​$33 a turkey. Rhonda is​ ______ profit, so if nothing changes she will​ ______ the number of turkeys she produces to maximize her profit this week.

U.S. Steel Lays Off 756 With a drop in the demand for steel pipe and​ tube, U.S. Steel Corporation will idle plants in Ohio and Texas and lay off 756 workers. As U.S. Steel responded to the fall in​ demand, how did its marginal cost​ change? What can you say about minimum AVC in the plants that​ closed? As U.S. Steel responded to the fall in​ demand, its marginal cost​ ______. The minimum average variable cost in the plants that closed must have been​ ______. A. ​increased; greater than the market price B. ​increased; less than the market price C. ​decreased; greater than the market price D. ​decreased; equal to average fixed cost E. ​decreased; less than the market price

In a perfectly competitive​ market, the firm is a price taker because​ ______. A. each firms makes a slightly different product B. the price is dictated by the largest firm in the​ market, and if a given firm lowers its price other firms will conspire against it C. the price in the market is the price that maximizes each​ firm's producer surplus D. it produces only a tiny proportion of the total output of a particular good and buyers are well informed about the prices of other firms E. the firms in perfect competition are interdependent and if one firm charges a lower​ price, other firms will also lower their prices and all firms will incur an economic loss

The table shows the demand schedule for Meg's Fortune Cookies. Meg's Fortune Cookies operates in a market called​ ______. A. perfect competition B. an oligopoly C. a perfect oligopoly D. monopolistic competition E. a monopoly

Meg's marginal revenue for each batch of cookies demanded is ​$

In perfect​ competition, _______. A. many firms sell the same quantity of similar goods but they charge slightly different prices B. firms can choose to enter the industry but they cannot choose the price at which to sell their good C. each firm knows its price but its competitors​ don't D. firms already in business have advantages over firms that plan to enter the industry

In perfect​ competition, each firm​ _______. A. is a price taker and produces the quantity that maximizes its profit in both the short run and the long run B. faces a perfectly inelastic demand for its​ product, so it can select the price that maximizes its profit C. produces as much as it can and either makes a profit or incurs a loss in the short run but breaks even in the long run D. can influence the price that it charges in the short run but not in the long run

In perfect​ competition, a firm maximizes its economic profit if it produces the output at which​ _______. A. market price equals marginal revenue B. economic profit equals zero in the short run C. marginal cost equals market price D. total revenue equals total cost

Perfect competition is a market in which there are​ _____ firms, each selling​ _____ product; many​ buyers; _____ to the entry of new firms into the​ industry; no advantage to established​ firms; and buyers and sellers​ _____ about prices. A. ​few; differentiated; no​ barriers; have no information B. ​many; identical; no​ barriers; are well informed C. ​many; identical;​ barriers; have no information D. ​few; differentiated;​ barriers; are well informed

Monopoly is a market in which one firm sells a good or service that has​ _____ substitutes and​ _____ blocks the entry of new firms. A. no​ close; a barrier B. ​close; a barrier C. ​close; no barrier D. no​ close; no barrier

Monopolistic competition is a market in which a​ _____ number of firms compete by making similar but slightly​ _____ products. A. ​large; costlier B. ​small; cheaper C. ​small; different D. ​large; different

Oligopoly is a market in which a​ _____ number of​ _____ firms compete. A. ​large; interdependent B. ​large; independent C. ​small; interdependent D. ​small; independent

A fall in the price of corn​ (the main chicken​ feed) _______ the marginal cost of producing chicken and​ _______ a​ farm's economic profit. A. ​decreases; decreases B. ​decreases; increases C. ​increases; increases D. ​increases; decreases

The good news for restaurants is that the​ _______ and the price restaurants pay for chicken wings​ _______. A. supply of chicken wings​ decreases; rises B. supply of chicken wings​ increases; rises C. supply of chicken wings​ increases; falls D. demand for chicken wings​ decreases; falls

The graph shows the​ short-run cost curves of a toy producer. The market has​ 1,000 identical toy producers. The market price of a toy is​ $21. In the short​ run, the firm produces _____ toys a week.

The firm _____ in the short run.

The market supply in the short run is​ _______. A. calculated as the sum of the quantities that firms produce when they maximize economic profit at each market price B. calculated as the sum of the quantities supplied by all firms in the market at prices above their shutdown price C. illustrated as a curve that is the vertical sum of all the supply curves of the firms in the market when the number of firms remain constant D. illustrated as a curve that is the vertical sum of the marginal cost curves of all the firms in the market

In a perfectly competitive market in​ short-run equilibrium,​ _______. A. the price and quantity bought and sold in the market are determined by the shutdown point B. only demand determines the price and quantity bought and sold in the market because all firms are price takers C. only supply determines the price and quantity bought and sold in the market because the good has many substitutes D. market supply and market demand determine the price and quantity bought and sold in the market

In​ short-run equilibrium, each firm makes an economic profit equal to​ _______. A. marginal revenue minus average total cost B. marginal revenue minus marginal​ cost, multiplied by the quantity produced C. market price minus marginal cost D. market price minus average total​ cost, multiplied by the quantity produced

The market supply curve in the short run is​ _______. A. an​ upward-sloping curve that shows that as the market price rises the quantity supplied increases B. horizontal at the shutdown price and upward sloping at prices above the shutdown point C. the same as the horizontal sum of the​ firms' marginal cost curves D. the same as the average total cost curve for the entire industry

California's commercial drone industry is taking off Customers are finding ever more creative ways to use​ drones, and 3E Robotics​ Inc., America's largest producer of consumer​ drones, expects sales to soar. Explain what is happening in the market for commercial drones. How would you expect the price of a drone to change in the short run and the long​ run? How would you expect the economic profit of a drone producer such as 3D Robotics to change in the short run and in the long​ run? The​ _______ drones is​ _______ in the short run. A. demand​ for; increasing B. the supply​ of; increasing C. demand​ for; decreasing D. supply​ of; decreasing

In the short​ run, the equilibrium price of a drone​ _______ and the economic profit of drone producers​ _______. A. ​falls; decreases B. ​falls; remains unchanged C. ​rises; remains unchanged D. ​rises; increases

In the long​ run, _____ the supply of drones.

At the new​ long-run equilibrium, the price of a drone is​ _______ and drone producers make​ _______. A. ​lower; an economic profit B. ​lower; zero economic profit C. ​higher; an economic profit D. ​unchanged; zero economic profit

In the short​ run, _______. A. the supply of coffee decreased B. coffee growers exited the market C. coffee growers incurred economic losses D. the demand for coffee decreased

In the long​ run, _______. A. coffee​ growers' economic losses increase B. the price of coffee beans rises and coffee farmers make zero economic profit C. the supply of coffee beans increases D. coffee growers enter the market

As a result of the rise of Internet retailing of recorded​ music, the small traditional record stores had​ ___________. A. to set their price equal to minimum average total cost B. to lower their price to​ compete, which resulted in economic loss C. a decreased supply of recorded music which resulted in their prices rising above Internet prices D. to use new technology which raised their average total cost

Record stores decided to exit the market rather than shut down temporarily because​ _______. A. price fell below minimum average fixed cost B. price fell below minimum average variable cost C. they were incapable of providing music downloads D. consumers prefer to shop online

If firms in a competitive industry are​ ______, then in the long​ run, firms have​ ______ the industry. A. breaking​ even; an incentive to exit B. making zero economic​ profit; an incentive to enter C. incurring economic​ loss; no incentive to exit D. making positive economic​ profit; no incentive to enter E. making positive economic​ profit; an incentive to enter

In a perfectly competitive​ industry, a​ long-run equilibrium occurs​ ________. A. when firms are maximizing economic profit and some of them advertise their goods B. when firms are maximizing profit and only when economic loss does not exceed total fixed cost. C. when each firm is making zero economic profit and no firm has an incentive to enter the industry D. whenever firms have no incentive to shut down

Perfect competition achieves efficiency if the market produces the quantity at which​ _______. A. consumer surplus is greater than producer surplus B. producer surplus equals zero C. the​ consumers' marginal benefit from the good equals the marginal cost of producing it D. marginal benefit is greater than marginal cost

The industry that produces portable CD players is in​ long-run equilibrium. Then the demand for portable CD players decreases permanently. As a​ result, firms will

Some firms will​ ______ the​ market, and the market supply curve will shift​ ______. A. ​enter; rightward B. ​exit; leftward C. ​exit; rightward D. ​enter; leftward

A firm will shut down in the short run if at the​ profit-maximizing quantity,​ ______. A. marginal revenue is less than average fixed cost B. total revenue is less than total cost C. marginal revenue is less than average variable cost D. average total cost exceeds the market price