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True/False/Uncertain. Evaluate whether the following statements are true, false or uncertain. Again, make sure to explain your reasoning

a. In the presence of a binding price floor, a good will not be efficiently allocated among consumers.

b. Equilibrium in a monopolized market is efficient because the monopolist always produces where marginal cost equals marginal revenue

c. The opportunity cost of a free H1N1 vaccination is zero.

d. A rise in the price of one good will lead you to consume more of all other goods.

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Darryn D'Souza
Darryn D'SouzaLv10
28 Sep 2019

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Related questions

Ā 

Please choose ( True or False or uncertain((( the teacher wantthe s answer with valid reasoning. please explain in details for each. Thanks

1) A profit-maximizing entrepreneur will minimize costs for a given output rather than maximizing output for a given cost.

2) A firm in a competitive industry has marginal revenue which depends on the shape of the consumers' demand curve.

3) In a competitive industry, the price elasticity of the aggregate industry supply curve will always be greater than or equal to the price elasticity of the supply of any individual firm.

1.

In a perfectly competitive market, in the long run, the marginal cost of a firm becomes equal to its minimum average total cost.

A) True
B) False

2.

Generally, The price a firm charges for its product is equal to its total revenue divided by the number of units sold.

A) True
B) False

3.

In a perfectly competitive firm to maximize profit a firm must make sure that the price it charges does not exceed its marginal cost.

A) True
B) False

4.

Firms in a competitive market can never make economic profits while they may make biasness (accounting) profits.

A) True
B) False

5.

When a perfectly competitive firm is making a positive economic profit its average revenue must be greater than its average total cost.

A) True
B) False

6.

To maximize its profit a firm always produces at the quantity level where it can charge the highest price and earn the greatest revenue; this strategy is consistent with setting is MC equal to price.

A) True
B) False

7.

When a firm in a competitive market is making a positive economic profit its business profit may be positive or negative.

A) True
B) False

8.

In a perfectly competitive market new entries could result in increases in input prices thus making production costs go up.

A) True
B) False

9.

In a perfectly competitive market, in the long run, each firm produces the maximum amount it can produce and charges the lowest price possible. That is why we consider competitive markets efficient.

A) True
B) False

10.

A monopolist always under-produces and charges a price higher than its MC.

A) True
B) False

11.

As the only supplier in the market a monopolist can charge any price it wishes and buyers have no choice but to pay.

A) True
B) False

12.

The marginal revenue is the additional revenue generated by the last unit of labor hired.

A) True
B) False

13.

The price a monopolist charges may or may not be above its average cost but it is always above its MR.

A) True
B) False

14.

When demand curve is a downward-sloping straight line (linear) marginal revenue will be greater than MC at all output leveles.

A) True
B) False

15.

By setting its MR equal to its MC a monopolist determines the output that would maximize its profit.

A) True
B) False

16.

In the long run each competitive firm would produce at the quantity level where its MC is equal to its MR as well as its ATC.

A) True
B) False

17.

A monopoly always makes an economic profit.

A) True
B) False

18.

When a monopoly's ATC is equal to the price it charges it is making normal economic profits.

A) True
B) False

19.

When a monopoly is making a zero economic profit still its MR>ATC.

A) True
B) False

20.

An increase in demand would enable a monopolist to raise its price while reducing its output.

A) True
B) False

21.

The market supply curve in an increasing-cost industry is:

A) a. upward sloping
B) b. downward sloping
C) c. vertical
D) d. horizontal
E) e. none of the above

22.

The total producer surplus is measured by:

A) a. the area between supply and demand curves.
B) b. the difference between the price the consumer is willing and able to pay and the price suppliers wish to charge to maximize their profits.
C) c. the area between the price consumers actually pay and the demand curve.
D) d. the area between the equilibrium market price and the supply curve.
E) e. the consumer willingness to pay as reflected by the equilibrium market price.

23.

. Economists measure economic (social) welfare by the

A) a. net consumer surplus
B) b. sum of consumer and producer surplus
C) c. sum of the net profits made by the industry's competitive firms
D) d. price consumers are willing to pay for one additional unit of a good
E) e. difference between the total consumer surplus and total producer surplus

I have the following questions for my Managerial Economics course.

1.

A principal-agent problems occur when managerial decisions are not consistent with the firm's shareholders' interests.

A) True
B) False

2.

A firm making more than a normal profit may still be experiencing an economic loss.

A) True
B) False

3.

An inferior good is a good whose demand decreases as its prices decreases.

A) True
B) False

4.

Assuming that crude oil is an input to automobile tires as well as to gasoline, a reduction in the tariff on imported crude oil would likely result in an increase in the number of tires sold but tire prices may increase or decrease.

A) True
B) False

5.

Other things remaining unchanged, advertisement would likely make demand for a good more price elastic.

A) True
B) False

6.

The cross price elasticity demand for a good with respect to the price of a complementary good is negative.

A) True
B) False

7.

When the marginal product of labor is smaller than its average product, marginal cost will be smaller than average variable cost.

A) True
B) False

8.

With capital measured along the vertical axis and labor along the horizontal axis the slope of an isoquant is equal to the ratio between the price of capital over the price of labor.

A) True
B) False

9.

If the ratio between the price of labor and the price of capital (w/r) is smaller than the ration between the marginal product of labor and the marginal product of capital, the firm should hire more capital.

A) True
B) False

10.

Normally the ratio between the price of a variable input and the marginal product of that input is equal to marginal cost.

A) True
B) False

11.

When labor is a variable input the product of wage and marginal product of labor is equal to the profit-maximizing price.

A) True
B) False

12.

If the price falls below the average total cost the firm may not shut down in the short run.

A) True
B) False

13.

When a perfectly competitive firm is producing at its profit maximizing level of output, its MR is equal to price and its MC while it may or may not be making an economic profit.

A) True
B) False

14.

The price a profit maximizing monopoly charges is always greater than its marginal cost as well as it MR while it may not be greater than its ATC.

A) True
B) False

15.

As new firms enter a monopolistically competitive market, the demand faced by each competing firm becomes more inelastic.

A) True
B) False

16.

The long-run equilibrium of a monopoly is characterized by its price being equal to its MR but always greater than its ATC.

A) True
B) False

17.

A monopolistically competitive firm sets its price equal to its MR, while keeping it above MC.

A) True
B) False

18.

We say that the long-run equilibrium of a monopolistically competitive firm reflects excess capacity because its MC is not equal to its ATC.

A) True
B) False

19.

In a duopoly with a zero marginal cost, according to the Cournot model, at equilibrium the sum of the two firms' output would be more than 50 percent of the market demand at a zero price.

A) True
B) False

20.

In the kinked demand curve model it is assumed that the demand faced by an oligopoly is less elastic when it lowers the price but more elastic when it raises the price.

A) True
B) False

21.

A distinguishing characteristic of monopolistically competitive market is price discrimination.

A) True
B) False

22.

The general explanation for the relative price stability in an oligopolistic market is the existence of some degree of decision interdependency among the firms in the market.

A) True
B) False

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