Microeconomics Mid-Term 2

Cash expenditures a firm makes to pay for resources are called:

Which would be an implicit cost for a firm? The cost:

If a firm's revenues just cover all its opportunity costs, then:

An industry is expected to expand if firms in the industry are earning positive:

In the short run:

Which is most likely to be a long-run adjustment for a firm that manufactures cars on an assembly line basis?

According to the law of diminishing marginal returns:

Diminishing marginal returns occurs as a firm adds more variable inputs to at least one fixed input because:

The law of diminishing returns in a manufacturing plant of a fixed capacity implies that, eventually, employing one:

The marginal product of labor curve graphically shows the change in total product resulting from a:

When a bakery manager reports that at her bakery, productivity of her 15 workers last month was 1,800 loaves per worker, she is referring to the:

The range of diminishing marginal productivity begins when:

At the Amarillo Piano Company, the average product of labor stays constant at 5, regardless of how much labor is employed. This implies that:

At what point does marginal product equal average product?

With fixed costs of $400, a firm has average total costs of $3 and average variable costs of $2.50. Its output quantity must be:

At an output of 1,000 units per year, a firm's variable costs are $5,000 and its average fixed costs are $3. Its total costs per year are:

The range over which average variable cost is increasing is the same as the range over which:

If the long-run average total cost curve for a firm is horizontal in the relevant range of production, then it indicates that there:

Normal profit is an implicit cost.

In the long run, a firm can increase its output quantity, but it will be limited by the size of its existing production plant.

When diminishing marginal returns starts occurring, the addition of successive units of a variable resource to a fixed resource will cause the firm's production to diminish.

Marginal product is highest where marginal cost is lowest.

Mutual interdependence would tend to limit control over price in which market model?

Under which market model are the conditions of entry into the market easiest?

Local electric or gas utility companies mostly operate in which market model?

The steel and automobile industries would be examples of which market model?

Which idea is inconsistent with pure competition?

Which characteristic would best be associated with pure competition?

In a purely competitive industry, each firm:

Which is true under conditions of pure competition?

Price is constant or "given" to the individual firm selling in a purely competitive market because:

A purely competitive firm does not try to sell more of its product by lowering its price below the market price because:

The demand curve faced by a purely competitive firm:

Sam owns a firm that produces tomatoes in a purely competitive market. The firm's demand curve is:

In pure competition, each extra unit of output that a firm sells will yield a marginal revenue that is:

In a graph for a firm in pure competition with the quantity of output measured on the horizontal axis, the total revenue curve is:

Which is necessarily true for a purely competitive firm in short-run equilibrium?

A firm sells a product in a purely competitive market. The marginal cost of the product at the current output of 1,000 units is $2.50. The minimum possible average variable cost is $2.00. The market price of the product is $2.50. To maximize profit or minimize losses, the firm should:

T-Shirt Enterprises is selling in a purely competitive market. It is producing 3000 units, selling them for $2.00 each. At this level of output, the average total cost is 2.50 and the average variable cost is $2.20. Based on these data, the firm should:

In pure competition, price is determined where the industry:

If there are many firms in an industry, then it must be a purely competitive market.

In short-run equilibrium, a competitive firm cannot earn economic profits.

Which of the following distinguishes the short run from the long run in pure competition?

In a purely competitive industry:

Suppose a firm in a purely competitive market discovers that the price of its product is above its minimum AVC point but everywhere below ATC. Given this, the firm:

We would expect an industry to expand if firms in that industry are:

Which of the following will not hold true for a competitive firm in long-run equilibrium?

Assume a purely competitive increasing-cost industry is initially in long-run equilibrium and that an increase in consumer demand occurs. After all economic adjustments have been completed product price will be:

Assume a purely competitive, increasing-cost industry is in long-run equilibrium. If a decline in demand occurs, firms will:

An increasing-cost industry is the result of:

Under what conditions would an increase in demand lead to a lower long-run equilibrium price?

In a decreasing-cost industry:

When LCD televisions first came on the market, they sold for at least $1,000, and some for much more. Now many units can be purchased for under $400. These facts imply that:

Purely competitive industry X has constant costs and its product is an inferior good. The industry is currently in long-run equilibrium. The economy now goes into a recession and average incomes decline. The result will be:

Suppose losses cause industry X to contract and, as a result, the prices of relevant inputs decline. Industry X is:

Under pure competition in the long run:

If for a firm P = minimum ATC = MC, then:

If a purely competitive firm is producing where price exceeds marginal cost, then:

Allocative efficiency occurs whenever:

Entrepreneurs in purely competitive industries:

Innovations that lower production costs or create new products:

The theory of creative destruction was advanced many years ago by:

Creative destruction is least beneficial to:

Which of the following is an example of creative destruction?

(Consider This) The average life expectancy of a U.S. business is approximately:

(Consider This) Approximately what percentage of start-up firms in the U.S. go bankrupt within the first two years?

(Consider This) Which of the following statements is true about U.S. firms?

Barriers to entering an industry:

What do economies of scale, the ownership of essential raw materials, and patents have in common?

With respect to the pure monopolist's demand curve it can be said that:

The demand curve faced by a pure monopolist:

The marginal revenue curve for a monopolist:

Which of the following is characteristic of a pure monopolist's demand curve?

Because the monopolist's demand curve is downsloping:

The pure monopolist's demand curve is relatively elastic:

For a pure monopolist marginal revenue is less than price because:

If a pure monopolist is operating in a range of output where demand is elastic:

Which of the following is incorrect? Imperfectly competitive producers:

A pure monopolist:

A pure monopolist's short-run profit-maximizing or loss-minimizing position is such that price:

The supply curve of a pure monopolist:

An important economic problem associated with pure monopoly is that, at the profit maximizing outputs, resources are:

Comparing a pure monopoly and a purely competitive firm with identical costs, we would find in long-run equilibrium that the pure monopolist's:

There is some evidence to suggest that X-inefficiency is:

Price discrimination refers to:

Which of the following is not a precondition for price discrimination?

If a monopolist engages in price discrimination, it will:

Price discrimination is:

A dilemma of regulation is that:

(Consider This) Children are charged less than adults for admission to professional baseball games but are charged the same prices as adults at the concession stands. This pricing system occurs because:

(Last Word) DeBeers Consolidated Mines markets about:

A pure monopolist will maximize profits by producing at that output where price and marginal cost are equal.

All of the following can file antitrust charges under the Sherman Act except:

Which of the following is least likely to violate the Sherman Act or the Clayton Act?

A function of the Federal Trade Commission is to:

Which of the following laws prohibited mergers by stock acquisition if the effect was to lessen competition?

Tying agreements:

The Celler-Kefauver Act of 1950:

Price fixing:

The Sherman Act:

In which of the following cases did the final court decision result in a breakup of the firm into competing businesses?

In the Microsoft antitrust case, the Federal government said in essence that:

In the Alcoa case of 1945 the courts held that:

In the U.S. Steel case of 1920 the courts held that:

Which one of the following is most likely to increase the Herfindahl index of a particular industry?

A merger between a maker of household detergents and a fast food chain would be an example of:

A conglomerate merger:

Conspiracies to fix prices are:

Critics of the regulation of natural monopolies contend that:

The main purpose of industrial regulation is to:

Critics of industrial regulation say that such regulation:

The largest efficiency gains from deregulation have occurred in the:

Social regulation differs from industrial regulation in that:

Which one of the following is concerned with social regulation?

(Consider This) The Consider This box "Of Catfish and Art (and Other Things in Common)" lists examples of recent antitrust cases involving:

(Consider This) According to the Consider This box on catfish and art, which of the following firms were recently convicted of price fixing?

(Last Word) In 2001, Microsoft was found guilty of violating:

The average household income in the United States in 2008 was:

The percentage of total before-tax income received by the top 20 percent of households in 2008 was about:

A Lorenz curve showing perfect equality in the distribution of income:

Which of the following is an example of a noncash transfer that is typically not included in the income-distribution data?

Suppose that Jane earns $10,000 in year 1 and $15,000 in year 2, while Jim earns $15,000 in year 1 and $10,000 in year 2. Is there income equality for the two individuals?

Two major criticisms of the Bureau of Census data as a portrayal of the degree of income inequality are that the income concept employed is too:

The degree of inequality in income distribution based on single-year data is:

One of the major causes of income inequality is differences in:

Which of the following would be considered part of wealth?

Reasons for the growing income inequality in the United States since 1970 include the following, except:

"A more equal distribution of income in the United States would result in greater total consumer satisfaction." This statement is based on the concept that:

Of the following groups, which had the highest incidence of poverty in 2008?

Social insurance programs partially replace income that has been lost due to the following, except:

Government programs that pay benefits to those who are unable to earn income because of permanent disabilities or to those who have very low incomes and dependent children are called:

The Temporary Assistance for Needy Families (TANF) program:

One of the provisions of the Temporary Assistance for Needy Families (TANF) program was to:

Suppose that a prejudiced white employer is willing to hire white workers at a rate of $16/hour, and this employer has a discrimination coefficient of $4. This implies that the employer would:

Suppose that white workers are getting paid $21/hour, while similarly-productive African-American workers are getting paid $18/hour. A prejudiced white employer with a discrimination coefficient of $24/hour will:

Ending discrimination against minority groups in educational processes and in employment situations would cause total domestic output to:

In statistical discrimination:

The crowding model of occupational discrimination suggests that occupational segregation results in:

The Lorenz curve is a graph that relates income to household spending.

The Supplemental Nutrition Assistance Program (formerly the food-stamp program) mostly pays out cash-vouchers to eligible households.

The Temporary Assistance for Needy Families (TANF) that replaced the old Aid for Families with Dependent Children welfare program succeeded in reducing the number of welfare recipients and increasing the employment rate among single mothers.

In 2008, about what percentage of U.S. households had personal incomes of less than $10,000?

The Lorenz curve is helpful in visualizing the:

As the area between the Lorenz curve and diagonal gets larger, the Gini ratio:

When taxes and transfer payments are taken into account, the distribution of income in the United States:

Since 1970, the distribution of personal income in the United States has:

Entitlement programs include:

Which of the following statements applies to the Social Security program?

The earned income tax credit (EITC) is, in essence:

A major criticism of the welfare system that led to reforms in the mid-1990s is that welfare payments:

Differences in ability are one major reason for income differences in the United States.

If income inequality is increasing, it means that the income levels of the poor are falling while the income levels of the rich are rising.

The basic reason why the debate between income equality versus inequality is on-going is because there is a tradeoff between income equality and economic efficiency.

All social insurance programs are welfare or public charity programs.