1. If profisses are one diminal a the project most fand by everyone 4. m not affect the production fati f's prodati h ill al 70- x panttively shaped the wage levels and leth leh effect always the labe A their ppottony the individ to trade thes mptable aflation None of the abo Se Wandy Checks prio per and lot is $5000 Noe MP- 4 18 A 138-7 *20 h 25 =10 430 h A Chick 16 A J4 and low labor so he hid ID.C eft dates Seppo Woody Chock's is one of many fes clearing 2005 hy works will Woody NE ParScore Test Form amer 19. It is usually assumed that a perfectly competitive firm's supply curve is given by its marginal on onder for this to be true, which of the following additional aumptions are necessary? L That the firm seek to maximize profits 11. That the marginal cost curve be positively sloped III. IV. That price exceeds average variable cost That price exceeds average total cost a. II and II, but not IV b. I and I but not and IV C I and I only d. I and Il but and IV 28. The principal difference between economic profies for a monopolist and for a competitive firm is the monopoly profits are considered a deadweight loss but competitive profies are not consumer surplus when competitive monopoly profits present a transfer o profits do not competitive profits long rin as well. monopoly profess exist only in the short rm whereas monopoly profits may exist in the major problems of equity whereas competitive profits do not 21. The notion that when the price of an input falls, a firm's marginal cost curve shifts down and overall production incremes so that more of every input is employed is known a the cost effect the input effect the substitution effict the opt effect 22 An input's marginal revenue product is given by the input's marginal physical productivity times marginal revenus of the firm's output the inputs marginal expense times marginal marginal revenue times the number of units employed the input's marginal expense times the inputs marginal physical productivity. 23. The accountant's cost of producing a bicycle refers to a the out of pocket payments made to produce the bicycle b the bicycle's retail price the marginal cost of the last bicycle produced the value of the goods that were given up to produce the bicycle 24 For any given output level, a firm's long-un costs are always greater than or equal to its short bare always less than or equal to its short run costs cont really greater than or equal to its shon-except in the case of diminishing return to scale dare ally less than or equal to its short rum cots except in the case of diminishing returns to scale Name: ID: C 25. The shape of a firm's expansion path depends upon the cost of labor input. 1. b. the cost of capital input. the shape of the firm's production function. all of these factors. 26. If the market for hula-hoops is characterized by a very inclastic supply curve and a very elastic demand curve, an inward shift in the supply curve would be reflected primarily in the form of 8. lower output. e b. higher prices. c. higher output. d. lower prices. LH Q 27. In the monopolistic competition model barriers to entry maintain some monopoly "rents" in the long run. b. firms are price takers C. one dominant firm acts as the monopolist that is followed by the fringe of competitors. none of these. d. 28. For the practice of price discrimination to be successful, the monopoly must have a downward sloping marginal cost curve. face similar demand curves for various markets. have similar costs among markets. be able to prevent resale of its product. 29. If an unregulated (because it produces electricity from hydroelectric power) electric company is a monopolist and faces demand of Q-50-10P. TC-10 MR-5-30 The profit maximizing output is a. 25 b. 10 C. 50 d. 5 30. If a monopoly is maximizing profits price will always be greater than marginal cost. b. price will always equal marginal cost. e. price will always be greater than average cost. d. price will always equal marginal revenue.
