ECON 101 Study Guide - Final Guide: Demand Curve, Fixed Cost, Longrun

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ECON 101 Full Course Notes

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It violates the law of demand: __________ if the income elasticity of demand is -2, then a 1 percent decrease in income will, double the quantity demanded, reduce the quantity demanded by half. c. Increase the quantity demanded by 2 percent: reduce the quantity demanded by 2 percent. e. Questions 9 to 11 refer to figure 1, which illustrates a firm"s average total cost (atc) and average variable cost (avc) curves. Figure 1: _________ when the firm is producing 200 units of output, total costs in the short run are. Indeterminable with data provided: _________ at a total product of 200 units, afc is, ,200, ,700, , . 5. e, , . 50, . 50, . e, , , , . e. Indeterminable with data provided: _________ if the level of production is 50 units, tfc is. 3: _________ the tax burden on suppliers will be greater the more, elastic is demand. b. Inelastic is demand: elastic is supply d.

Related Questions

A natural monopoly is a market where:

A) a single firm has control over a vital natural resource.

B) many smaller firms can produce the entire market output at the same per-unit cost as could one large firm.

C) a single large firm can produce the entire market output at a lower per-unit cost than a group of smaller firms.

D) many smaller firms can produce the entire market output at a lower per-unit cost than could one large firm.

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Select the correct answer:

A (legal; natural) monopoly exists when one firm can meet the entire market demand at a lower average total cost than two or more firms could.

A monopoly that is able to sell different units of a good or service for different prices is a (natural-price; price-discriminating) monopoly.

The act of obtaining special treatment by the government to create an economic profit is called (government surplus; rent seeking).

Regulated firms have an incentive to inflate their costs under (rate of return; price cap) regulation.

The U.S. Postal Service has a (natural; legal) monopoly on first class mail delivery.

A (single-price; price discriminating) monopoly maximizes profit by producing the quantity at which marginal revenue equals marginal cost and then charging the maximum price that consumers are willing to pay for that quantity.

The key idea behind price discrimination is to convert (consumer surplus; producer surplus) into economic profit.

In which of the following ways is a monopoly beneficial to an economy?

A. Monopoly profits give firms more reason to invest in the creation of new products through research and development.

B. Firms that are allowed monopoly profits search out innovative technologies that they can bring to market.

C. With natural monopolies, costs may be lower than those that would exist in competitive markets with many producers.

D. All of the above.

Which of the following is a difference between a perfectly competitive market and a monopoly?

A. The market demand curve faced by a perfectly competitive firm is horizontal, while the market demand curve in a monopoly is downward-sloping.

B. The equilibrium price in a perfectly competitive market exceeds marginal revenue, while the equilibrium price in a monopoly equals marginal revenue.

C. The sellers in a perfectly competitive market are price-makers, while a seller in a monopoly market is a price-taker.

D. There are huge barriers to entry in a perfectly competitive market, while there are no barriers to entry in a monopoly.

In the United States in 2011, there were 104 fatalities per 100,000 workers in the logging industry. This is the second-highest rate after the fisheries industry. Although the fatality rate in this industry is so high, many workers still choose to work as loggers.

What could explain this?

A. Workers choose these high-risk jobs because they are willing to bear an occupational risk to earn a higher wage.

B. Low-risk jobs are already taken, so workers must choose their next-best alternative, which in this case is logging.

C. Workers in these industries lack human capital and must choose to work as loggers.

D. Loggers must be indifferent between low-risk and high-risk jobs.

In the case of a decrease in product prices:

A. the quantity effect always dominates the price effect.

B. the price effect always dominates the quantity effect.

C. when the price effect dominates the quantity effect, total revenue decreases.

D. when the quantity effect dominates the price effect, total revenue decreases

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ECON 101 Study Guide - Final Guide: Demand Curve, Fixed Cost, Longrun

ECON 101 Full Course Notes

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