eco 202 weekly quizzes

8/2/2019 ECO 202 Weekly Quizzes

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Chapters 12 and 13

1. Question : Refer to the graph below. The average total cost curve is represented bywhich curve?

Student Answer:I

II

III

IV

Points Received: 0 of 5

Comments:

1755975899 MultipleChoice 8 False

0 1755975899 MultipleChoice 8

2. Question : If a firm shuts down for a week, then during that week:

Student Answer:total cost is zero.

total cost equals total fixed cost.

total cost equals total variable cost.

total variable cost exceeds total fixed cost.


Comments:

1755975900 MultipleChoice 41 True


3. Question : Which short-run cost curve continually declines as output increases?

Student Answer:Total cost

Average variable cost

Average fixed cost

Marginal cost


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Comments:



4. Question : Rachel left her job as a graphic artist, where she earned $42,000 per year,to open her own graphic arts firm. Her explicit costs for her new businessinclude:

Student Answer:only the expenses incurred for office space, equipment, and supplies.

only her foregone salary of $42,000 per year.

both the expenses incurred for office space, equipment, and suppliesand her foregone salary of $42,000 per year.

neither the expenses incurred for office space, equipment, andsupplies nor her foregone salary of $42,000 per year.


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5. Question : The average variable cost curve is a mirror image of the:

Student Answer:total product curve.

marginal product curve.

average product curve.

marginal cost curve.


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6. Question : A business owner makes 50 items by hand in 6 hours. She could haveearned $10 an hour working for someone else. If each item sells for $5and the explicit costs total $14, accounting profit for 50 items is:


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Student Answer:$64.

$176.

$236.

$300.


Comments:



7. Question : You run a small business producing picture frames. This month your totalcost is $10,000, your variable cost is $5,000, and your output is 5,000

picture frames. Given this information, your:

Student Answer:average variable cost is $2.

average total cost is $3.

average total cost is $1.

average fixed cost is $1.


Comments:



8. Question : A production table (from which a production function is derived) can beused to determine:

Student Answer:a firm's profits.

a firm's costs.

how much output is produced from a given quantity of inputs.

how much of a product will be demanded by consumers.


Comments:


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9. Question : The law of diminishing marginal productivity holds:

Student Answer:when all inputs are variable.

in the long run.

when all inputs are fixed.

in the short run.


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10. Question : A firm can use 5 workers and 10 machines, 7 workers and 9 machines, or8 workers and 9 machines to produce 4 cars. If each worker costs $200and each machine is rented for $50, the economically efficient inputcombination is:

Student Answer:5 workers and 10 machines.

7 workers and 9 machines.

8 workers and 9 machines.

none of these input combinations would be economically efficient.


Comments:



11. Question : Refer to the graph below. This set of cost curves is:

Student Answer:correct.

wrong because the average total cost and the marginal cost curvesare confused.


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wrong because the average total cost and the average variable cost

curves are reversed.

wrong because the average fixed cost curve is shown to be below theaverage variable cost.


Comments:



12. Question : Total revenue minus explicit measurable costs equals:

Student Answer:

economic profit.

normal profit.

accounting profit.

average profit


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13. Question : Output per worker is also called:

Student Answer:marginal product.

average product.

total product.

variable product.


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14. Question : If marginal cost is greater than average total cost, then average totalcost:

Student Answer:is minimized.

is falling.

will not change.

is rising.


Comments:



15. Question : The short-run average total cost curve is generally assumed to be:

Student Answer:U-shaped.

horizontal.

upward-sloping.

downward-sloping.


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16. Question : When output is 50, fixed costs are $1,000 and variable costs are $2,000,what is the average total cost?

Student Answer:$20

$40

$60

$80



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Comments:



17. Question : Refer to the table below. If the output of bicycles is 4 per week, then themarginal cost of producing another bicycle is:

Student Answer:$110.

$120.

$130.

$140.


Comments:



18. Question : If marginal cost is greater than average variable cost, then averagevariable cost will:

Student Answer:increase as output increases.

decrease as output increases.

not change as output increases.

equal average total cost.


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19. Question : When per-unit costs increase as output increases, there are economies ofscale in production.


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Student Answer:True

False


Comments:

1755975917 TrueFalse 3 True

0 1755975917 TrueFalse 3

20. Question : In the long run all inputs are variable; in the short run some inputs arefixed.

Student Answer:True

False


Chapters 14 and 15

1. Question : If a monopolist earns zero economic profit, then price is equal to:

Student Answer:marginal cost (MC).

average variable cost (AVC).

average fixed cost (AFC).

average total cost (ATC).


Comments:



2. Question : Refer to the graph below. Assuming that this monopolist maximizes profit,it will produce:

Student Answer:300 units of output per day.


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600 units of output per day.




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3. Question : For a perfectly competitive firm, the profit-maximizing output level occurswhere marginal cost equals price.

Student Answer:True

False


Comments:


0 1764553064 TrueFalse 2

4. Question : Refer to the graph below. If the firm is producing 525 units of output,profit is equal to:

Student Answer:$38.

-$38.

$0.

$30.


Comments:



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5. Question : A natural monopoly:

Student Answer:has an average total cost curve that reaches minimum possible

average total cost at a low level of output.

is usually subject to antitrust suits.

is usually allowed to choose its price so as to maximize profits in theUnited States.

occurs when a single firm can supply the entire market demand for aproduct at a lower average total cost than would be possible if two ormore firms supplied the market.


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6. Question : In the U.S., monopolies:

Student Answer:do not exist.

are always prohibited by government.

are sometimes created by government.

are never created by government.


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7. Question : If MR > MC, the monopolist should:

Student Answer:decrease production.

increase production.

maintain the same level of production.

stop producing.


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Comments:



8. Question : Refer to the graph below. Suppose that market price is $5. Given thisprice, a perfectly competitive firm should:

Student Answer:continue to produce in the short run but shut down in the long run.

continue to produce in both the short run and the long run.

shut down in the short run but continue production in the long run.

shut down immediately.


Comments:



9. Question : A perfectly competitive firm in the long run:

Student Answer:can earn positive or negative economic profits.

can earn negative accounting profits as long as economic profits arepositive.

makes zero economic profits.

makes zero accounting profits.

Points Received: 5 of 5Comments:



10. Question : Refer to the graph below. If market price is currently $7.00 per unit, thisperfectly competitive firm will maximize profit by producing:


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Student Answer:450 units of output.

650 units of output.

850 units of output.

between 550 and 650 units of output.


Comments:



11. Question : Monopolies that exist because economies of scale create a barrier to entryare called natural monopolies.

Student Answer:True

False


Comments:


0 1764553072 TrueFalse 10

12. Question : If a perfectly competitive firm finds that price is less than average variablecost it should:

Student Answer:not adjust output if marginal cost equals price.


increase output until price equals marginal cost.

decrease output until price equals marginal cost.


Comments:


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13. Question : Refer to the graph below. Areas B and D represent:

Student Answer:the welfare loss from a monopoly.

the increased producer surplus from a monopoly.

the increased consumer surplus from a monopoly.

the increased welfare from a monopoly.


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14. Question : All of the following can be barriers to entry except:

Student Answer:economies of scale.

a firm's superior production ability.

price discrimination.

patents.


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15. Question : Refer to the table below. The maximum of profit that the perfectly

competitive firm represented by the above data could earn is:

Student Answer:$25.


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$35.

$45.

$55.


Comments:



16. Question : Refer to the graph below. Suppose that market price is $3. Given thisprice, a perfectly competitive firm should:

Student Answer:continue to produce in the short-run but shut down in the long-run.

continue to produce in both the short-run and the long-run.

shut down in the short-run but continue production in the long-run.



Comments:



17. Question : Refer to the graph below. The perfectly competitive firm depicted iscurrently:

Student Answer:earning positive economic profit.

earning zero economic profit.

incurring a loss, but the loss is smaller than it would be if the firmshut down.


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incurring a loss that is larger than total fixed cost, so the firm should

shut down.


Comments:



18. Question : For a perfectly competitive firm, the profit-maximizing output level occurswhen marginal cost equals price.

Student Answer:True

False


Comments:


0 1764553079 TrueFalse 6

19. Question : A profit-maximizing monopolist will always set price equal to marginalcost.

Student Answer:True

False


Comments:

1764553080 TrueFalse 8 False

0 1764553080 TrueFalse 8

20. Question : A price-discriminating monopolist will make less in profit than a normalmonopolist.

Student Answer:True

False

Chapters 16 and 21


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Question : The Herfindahl index is calculated by adding the squared value of themarket shares of all the firms in the industry.

Student Answer:True

False


Comments:

1774660621 TrueFalse 1 False

0 1774660621 TrueFalse 1

2. Question : College education provides higher income for the individual but also amore productive and more educated person who will contribute to societyin many ways. Higher education is an example of

Student Answer:a positive externality.

a negative externality.

a non-excludable service.

adverse selection.


Comments:



3. Question : Refer to the graph below of a monopolistically competitive firm. You canconclude that:

Student Answer:new firms will enter the industry in the long run.

existing firms will exit the industry in the long run.

the industry is in long-run equilibrium.

the firm earns a profit in the long run.



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monopolistic competition.

implicit collusion.

predatory pricing.


Comments:



7. Question : In which of the following models of firm behavior do firms charge acompetitive price, while still emphasizing the importance of barriers toentry and exit?

Student Answer: Cartel model of oligopoly.

Contestable market model of oligopoly.

Perfectly competitive model.

Monopoly model.


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8. Question : In the NAICS classification system, the broadest classification would be a:

Student Answer:two-digit industry.

three-digit industry.

four-digit industry.

five-digit industry.


Comments:




19/23

9. Question : The price set by a monopolistically competitive firm:

Student Answer:exceeds the marginal cost of production.

produces economic profits in both the long-run and the short-run.

equals the marginal cost of production.

is less than the marginal cost of production.


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10. Question : An industry that has many sellers offering slightly differentiated productsis called:

Student Answer:perfectly competitive.

monopolistically competitive.

oligopolistic.

monopolistic.


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11. Question : In the case of public goods, a demand curve that shows the marginalbenefit of the good is:

Student Answer:nonexistent.

the horizontal sum of individual demand curves.

the vertical sum of individual demand curves.

perfectly inelastic.



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12. Question : Consider whether or not consumers are better or worse off withdifferentiated products (that is, how advertising affects our social welfare).According to your text, advertising and product differentiation:

Student Answer:reduce social welfare by increasing average total cost.

increase social welfare by giving consumers a greater variety ofgoods to choose from.

have an uncertain effect on welfare because they increase bothaverage total cost and product variety.

have nothing to do with product differentiation and social welfare.


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13. Question : Economists generally prefer direct regulation to incentive-based programsbecause direct regulation is more efficient.

Student Answer:

True

False


Comments:


0 1774660633 TrueFalse 4

14. Question : The central element of the oligopoly model is that each firm produces a

differentiated product.

Student Answer:True

False



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Comments:


0 1774660634 TrueFalse 3

15. Question : Refer to the graph below depicting a monopolistically competitive firm.The demand curve is represented by curve:

Student Answer:A.

B.

C.

D.


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16. Question : The unwillingness of individuals to share in the cost of a public good iscalled the:

Student Answer: free rider problem.

social conscience problem.

volunteer problem.

public choice problem.


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17. Question : In the contestable market model, an oligopoly with no barriers to entrysets a:

Student Answer:monopoly price.


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price that equals ATC.

competitive price.

collusive price.


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18. Question : Calculate the four firm concentration ratio with the following data on thevalue of sales: Breyers $477 million, Haagen Dazs $183 million, Ben &Jerrys $148 million, Edys $98 million. Total market sales were $4054million.

Student Answer:0.22%

2%

12%

22%


Comments:



19. Question : Significant barriers to entry exist in a monopolistically competitiveindustry.

Student Answer:True

False


Comments:


0 1774660639 TrueFalse 2

20. Question : In the long run, the monopolistic competitor will most likely:


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Student Answer:be earning zero economic profit.

be operating at the lowest point on its average total cost curve.

Produce where MR equals price.

All of the above.

eco 202 weekly quizzes

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