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Cost
P&L
Monopoly
Oligopoly
Weeks Gone By...
100
The following is most likely to be a variable cost: A) Real Estate Taxes B) Rental Payments of IBM Equipment C) Interest on bonded indebtedness D) Fuel and power payments
What is D) Fuel and power payments?
100
The following statement is true: A) Accounting profits are greater than economic profits B) Economic profits are greater than accounting profits C) Accounting profits are equal to economic profits
What is A) Accounting profits are greater than economic profits?
100
The monopolist is ____________. A) an imperfect competitor and has a horizontal demand curve B) an imperfect competitor and has a downward sloping demand curve C) a perfect competitor and has a horizonal demand curve D) a perfect competitor and has a downward sloping demand curve
What is B) an imperfect competitor and has a downward sloping demand curve?
100
The following statement is true: A) All oligopolies have only a few firms B) Most oligopolies have only a few firms C) Some oligopolies have only a few firms
What is A) All oligopolies have only a few firms?
100
The following will cause a decrease in demand for home remodeling, other things being equal: A) A decrease in the price of remodeling materials B) An increase in the number of home builders C) A decrease in consumers' incomes D) An increase in home sales
What is C) A decrease in consumers' incomes?
200
The decision to shut down is made in ___________. A) both the short run and the long run B) neither the short run nor the long run C) the long run D) the short run
What is D) the short run?
200
When marginal cost is rising but is less than average total cost, we are definitely below the __________. A) shut-down point B) break-even point C) maximum profit point
What is B) break-even point?
200
A downward sloping demand curve means ________. A) you have to lower your price to sell more B) demand falls as output rises C) demand rises as output rises D) total revenue declines as price is lowered
What is A) you have to lower your price to sell more?
200
Administered prices are most likely to occur under _________. A) perfect competition B) monopolistic competition C) monopoly D) oligopoly
What is D) oligopoly?
200
The demand for and supply of gasoline both increase at the same time, this will happen to market equilibrium price and quantity: A) Market price may go up, down or stay the same but quantity will increase. B) Market price and quantity both go up. C) Market price and quantity both go down. D) Market price doesn't change but quantity goes up.
What is A) Market price may go up, down or stay the same but quantity will increase?
300
In the short run, ___________. A) all costs are fixed costs B) all costs are variable costs C) some costs are fixed costs D) all costs are marginal costs
What is C) some costs are fixed costs?
300
The perfect competitor's demand curve is _________. A) always horizontal B) always vertical C) sometimes horizontal D) sometimes vertical
What is A) always horizontal?
300
The basis for monopoly in the automobile industry would most likely be ____________. A) control over an essential resource B) economies of scale C) legal barriers
What is B) economies of scale?
300
The following statement is true... A) All firms in oligopolistic industries are large B) Most firms in the United States are oligopolies C) The crucial factor in oligopolistic industries is product differentiation D) Most of our GDP is produced by oligopolies
What is D) Most of our GDP is produced by oligopolies?
300
Suppose that consumers expect that the price of apple juice will rise next month. We would predict that the equilibrium quantity of apple juice will _____ and the equilibrium price of apple juice will ______ this month. A) rise; fall B) fall; fall C) rise; rise D) fall; rise
What is C) rise; rise? (Slavin, ch. 4)
400
If AVC is declining, then __________. A) marginal cost must be less than AVC B) marginal cost must be greater than ATC C) AVC must be greater than AFC
What is A) marginal cost must be less than AVC?
400
Each of the following is a characteristic of perfect competition EXCEPT _________. A) many firms B) identical products C) perfect mobility D) varying prices charged by different firms
What is D) varying prices charged by different firms?
400
The ___________ competitor can make a profit or take a loss in the short run. A) Monopolistic B) Perfect
What is A) Monopolistic?
400
The following is NOT an oligopolist... A) ExxonMobil B) General Motors C) Your local phone company D) Xerox
What is C) Your local phone company?
400
Demand for a good is price inelastic if consumers refuse to substitute any other good for it. A) This is sometimes true if the elasticity coefficient is greater than 1. B) This is false. C) This is true. D) This is a trick question as substitutes have nothing to do with price elasticity of demand.
What is C) This is true? Slavin text in ch.18 on pp.444-451 Number of substitutes is a determinant of price elasticity of demand. If you don't substitute, the demand is price inelastic.
500
In general a firm's __________. A) total cost rises as output rises up to a certain point and then begins to decline B) marginal cost rises as output rises up to a certain point and then begins to decline C) average total cost declines as output rises up to a certain point and then begins to rise
What is C) average total cost declines as output rises up to a certain point and then begins to rise?
500
The perfect competitor is ________. A) a price maker rather than a price taker B) a price taker rather than a price maker C) a price taker and a price maker D) neither a price maker or a price taker
What is B) a price taker rather than a price maker?
500
________ the perfect competitor or the monopolitic competitor make zero profits in the long run. However because the _____ competitor produces at the minimum point of its ATC (Average Total Cost) curve and the _________ competitor does not. So clearly the _______ competitor is more efficient. A)Neither/Monopolistic/Perfect/Monopolistic B)Both/Monopolistic/Perfect/Monopolistic C)Both/Perfect/Monopolistic/Perfect
What is C)Both/Perfect/Monopolistic/Perfect?
500
An industry that is highely concentrated might have a Herfindahl-Hirschman index of _______. A) 20,000 B) 2,000 C) 800 D) 10,000 E) 1
What is D) 10,000?
500
The law of demand states that the quantity demanded of a product increases as: A) consumer income rises. B) the prices of other products fall. C) the price of the product rises. D) the price of the product falls.
What is D) the price of the product falls? Slavin text in ch.17 on p.415