The labor demand and labor supply schedules are given in the table above. If a m
ID: 1248346 • Letter: T
Question
The labor demand and labor supply schedules are given in the table above. If a minimum wage of $6 per hour is imposed,
a)a surplus of 300 workers occurs.
b)900 workers are employed.
c)there is no shortage or surplus of workers.
d)Both answers B and C are correct.
e)Both answers A and C are correct.
Compared to a perfectly competitive industry, a single-price monopoly will produce
a)less output.
b)the same output.
c)more output.
d)some amount that might be more, less, or the same depending on whether the monopoly's marginal revenue curve lies above, below, or on its demand curve.
e)some amount that might be more, less, or the same depending on whether the monopoly's marginal cost curve lies above, below, or on its marginal revenue curve.
Which of the following variables do you need to know to calculate marginal cost?
i) change in total cost
ii) marginal product of labor
iii) change in quantity of labor used
iv) change in output
a)i and iv
b)ii and iv
c)Only ii
d)i, iii, and iv
e)i and ii
A difference between a perfectly competitive industry and a monopoly is that
a)a barrier to entry protects perfectly competitive firms in the short run and protects a monopoly in the long run.
b)a firm in a perfectly competitive industry can perfectly price discriminate but a monopoly cannot.
c)perfectly competitive firms can have a public franchise.
d)only monopolies have an incentive to maximize profit.
e)in the long run, firms in a perfectly competitive industry earn a normal profit and a monopoly can earn an economic profit.
Suppose the grocery store market in Kansas City is perfectly competitive. Then one store buys all the others and becomes a single-price monopoly. The figure above shows the relevant demand and cost curves. When the market is perfectly competitive, the quantity of steak is
a)less than 2,000 pounds.
b)2,000 pounds.
c)3,000 pounds.
e)4,000 pounds.
f)5,000 pounds.
The above figure definitely shows
a long-run equilibrium for a perfectly competitive market.
an industry with few firms.
a long-run equilibrium for a monopolistically competitive firm.
a long-run equilibrium for a perfectly competitive firm.
a short-run equilibrium for a monop
A single-price monopoly
sets a single, different price for each consumer.
sets a single price for all consumers.
asks each consumer what single price they would be willing to pay.
sells each unit of its output for the single, highest price that the buyer of that unit is willing to pay.
sets a single, different price for each of two different groups
If substantial barriers to entry exist, then
the market is not monopolistic competition.
firms are free to enter the market.
the remaining firms are perfectly competitive.
firms take the market price as given.
the market might be monopolistic competition.
Which of the following is correct?
Monopoly has a four-firm concentration ratio of 100.
Perfect competition has a four-firm concentration ratio near zero.
Monopolistic competition has a four-firm concentration ratio of more than 40.
Both answers A and B are correct.
Both answers A and C are correct.
In a perfectly competitive industry,
i. entry by new firms shifts the market supply curve rightward.
ii. exit by existing firms shifts the market supply curve leftward.
iii. at all times existing firms make only a normal profit.
i and iii.
ii only.
i, ii, and iii.
i and ii.
ii and iii.
To maximize profit, a firm in monopolistic competition will produce the quantity where marginal revenue
equals average total cost.
equals zero.
is greater than marginal cost.
equals marginal cost.
is less than marginal cost.
The above figure shows three possible average total cost curves. If all firms in a perfectly competitive industry each have an average total cost curve identical to ATC1, each produce 30 units, and the market price of the good is $16 per unit, then the firms
earn an economic profit and new firms enter the market.
earn a normal profit and new firms enter the market.
earn a normal profit and no firms enter or exit the market.
earn a normal profit and some firms exit the market.
incur an economic loss and some firms exit the market.
The characteristics that describe a perfectly competitive industry include
one firm selling to many buyers.
many firms selling a slightly differentiated product.
a few firms selling to many buyers.
many firms selling an identical product.
None of the above answers is correct.
Monopolistic competition is identified by
many firms producing identical goods.
one firm producing a unique good.
many firms producing a slightly differentiated product.
large barriers to entry.
a few firms producing a slightly differentiated product.
For a firm in monopolistic competition, innovation and product development are
senseless because economic profit is always zero in the long run.
necessary in order to have a chance of earning at least a short-run economic profit.
necessary to allow new firms to enter.
uncommon because other firms already produce similar products.
inconsequential because each firm produces a different product.
Which of the following is NOT a factor of production?
capital
bonds.
entrepreneurship
land.
labor
A monopoly
must determine the price it will charge.
cannot price discriminate because such a pricing strategy is illegal in the United States.
faces extensive competition from firms making close substitutes.
Both answers A and B are correct.
Both answers B and C are correct.
If a few oil-producing countries in the Middle East decide to jointly limit the production of oil,
they will try to operate as a large, monopolistically competitive firm.
they would like the price of oil to be the same as if the market were perfectly competitive.
they are forming a cartel.
game theory does not apply to their actions because they are nations, not firms.
they will agree to lower the price of oil in order to increase their profits.
The price charged by a perfectly competitive firm is
lower the more the firm produces.
higher the more the firm produces.
the same as the market price.
indeterminate.
different than the price charged by competing firms.
5 points Save
A perfectly competitive firm will maximize profits when the
firm's marginal revenue exceeds its marginal cost by the maximum amount possible.
firm's marginal revenue is equal to its marginal cost.
firm's marginal revenue is equal to the price.
price exceeds the firm's marginal cost.
firm's total revenue is equal to total cost.
An implicit cost is
when a money payment is made only because a factor of production is used.
not relevant to an entrepreneur's decision making.
when a factor of production is used but a money payment is not made.
when a money payment is made.
considered part of the owner's economic profit.
Marginal product of labor is defined as the change in
total output divided by the change in cost from employing one more worker.
total cost from employing one more worker.
average product from employing one more worker.
total output from employing one more worker.
total revenue from employing one more worker.
Because of product differentiation, firms
are unable to compete by using advertising.
do not have to compete because their products are unique.
must compete on only price.
cannot compete on price.
can compete on the basis of quality
Firms that can effectively price discriminate
can prevent the resale of their products.
have only one class of buyers, buyers willing to pay a high price.
can be either perfectly competitive firms or monopolies.
Both answers A and B are correct.
Both answers A and C are correct.
Explanation / Answer
The labor demand and labor supply schedules are given in the table above. If a minimum wage of $6 per hour is imposed,
Figure should be there to answer this question
a)a surplus of 300 workers occurs.
b)900 workers are employed.
c)there is no shortage or surplus of workers.
d)Both answers B and C are correct.
e)Both answers A and C are correct.
Compared to a perfectly competitive industry, a single-price monopoly will produce
a)less output.
Which of the following variables do you need to know to calculate marginal cost?
i) change in total cost
ii) marginal product of labor
iii) change in quantity of labor used
iv) change in output
a)i and iv
A difference between a perfectly competitive industry and a monopoly is that
d)only monopolies have an incentive to maximize profit.
Suppose the grocery store market in Kansas City is perfectly competitive. Then one store buys all the others and becomes a single-price monopoly. The figure above shows the relevant demand and cost curves. When the market is perfectly competitive, the quantity of steak is
Figure should be there to answer this question
a)less than 2,000 pounds.
b)2,000 pounds.
c)3,000 pounds.
e)4,000 pounds.
f)5,000 pounds.
The above figure definitely shows
Figure should be there to answer this question
a long-run equilibrium for a perfectly competitive market.
an industry with few firms.
a long-run equilibrium for a monopolistically competitive firm.
a long-run equilibrium for a perfectly competitive firm.
a short-run equilibrium for a monop
A single-price monopoly
sets a single price for all consumers.
If substantial barriers to entry exist, then
the market might be monopolistic competition.
Which of the following is correct?
Perfect competition has a four-firm concentration ratio near zero.
In a perfectly competitive industry,
i. entry by new firms shifts the market supply curve rightward.
ii. exit by existing firms shifts the market supply curve leftward.
iii. at all times existing firms make only a normal profit.
i, ii, and iii.
To maximize profit, a firm in monopolistic competition will produce the quantity where marginal revenue
equals marginal cost.
The above figure shows three possible average total cost curves. If all firms in a perfectly competitive industry each have an average total cost curve identical to ATC1, each produce 30 units, and the market price of the good is $16 per unit, then the firms
Figure should be there to answer this question
earn an economic profit and new firms enter the market.
earn a normal profit and new firms enter the market.
earn a normal profit and no firms enter or exit the market.
earn a normal profit and some firms exit the market.
incur an economic loss and some firms exit the market.
The characteristics that describe a perfectly competitive industry include
many firms selling an identical product.
Monopolistic competition is identified by
many firms producing a slightly differentiated product.
For a firm in monopolistic competition, innovation and product development are
necessary in order to have a chance of earning at least a short-run economic profit.
Which of the following is NOT a factor of production?
bonds.
A monopoly
must determine the price it will charge.
If a few oil-producing countries in the Middle East decide to jointly limit the production of oil,
they are forming a cartel.
The price charged by a perfectly competitive firm is
the same as the market price.
5 points Save
A perfectly competitive firm will maximize profits when the
firm's marginal revenue is equal to its marginal cost.
An implicit cost is
when a factor of production is used but a money payment is not made.
Marginal product of labor is defined as the change in
total output from employing one more worker.
Because of product differentiation, firms
do not have to compete because their products are unique.
Firms that can effectively price discriminate
can prevent the resale of their products.
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