01:220:102 Study Guide - Quiz Guide: Long Term Ecological Research Network, Oligopoly, Rationality

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Published on 15 Oct 2018
School
Rutgers University
Department
Economic
Course
01:220:102
Professor
` NAME
94 Multiple choice questions
1. customer is required to buy one product only if the customer also buys a second product
- controversial because customer is being forced and options are limited
A. Inferior Good
B. Prisoners Dilemma
C. Deregulation
D. Tying Sales
2. as income rises, the quantity of good consumed decreases
negative correlation (e.g. fast food)
A. Predatory Pricing
B. Income Effect
C. Inferior Good
D. Copyright
3. neither patent nor copyright, but still a secret
(e.g. Coca-Cola formula)
A. Trigger Strategy
B. Maximin Solution
C. Trade Secrets
D. Firm (business)
4. additional cost of producing one more unit of output generally upward
sloping because of diminishing marginal returns = (change total cost /
change in Q)
A. Deregulation
B. Marginal Cost
C. Marginal Profit
D. Inferior Good
5. two formerly separate firms combine into one single firm
(common ownership)
A. Exit
B. Entry
C. merger
D. Average Variable Cost
6. occurs when a change in price causes buyers to have incentive to consume less of a good with a relatively high price and more of a good with a
relatively low price
A. Substitution Effect
B. budget constraint line
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C. Concentration Ratio
D. mixed strategy
7. long run process of reducing production in response to a sustained pattern of losses
A. Exit
B. Price
C. acquisition
D. Inferior Good
8. method of understanding consumer choices by combining psychology and economics
A. Decreasing Cost Industry
B. Marginal Utility per Dollar (MU/$)
C. Behavioral Economics
D. Restrictive Practices
9. requires dealers to sell for at least a certain minimum price
- ILLEGAL but habitually ignored
A. Maximizing Utility
B. Minimum Resale Price Agreement
C. Diminishing Marginal Returns
D. Individual Retirement Accounts (IRA)
10. eliminated or reduced government restrictions on
1. firms that can enter
industry
2. prices charged 3.
quantity produced
due to an improvement in technology
A. Substitution Effect
B. Oligopoly
C. Tying Sales
D. Deregulation
11. sum of marginal profit
A. Average Profit (Profit Margin)
B. Normal Good
C. Marginal Profit
D. Total Profit
12. as demand increases, cost of production increases
- supply inelastic
(e.g. skilled workers)
A. Maximizing Utility
B. Increasing Cost Industry
C. Normal Good
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D. Inferior Good
13. Follows the same rules as budget constraint graph, except with different variables
- Income on Y axis and hours (labor/leisure) on X axis
- people seek utility maximizing point, which depends on personal preference
A. Substitution Effect
B. Labor-Leisure Constraint Graph
C. Monopolistic Competition
D. budget constraint line
14. the minimum average total cost of producing each level of output
A. Restrictive Practices
B. budget constraint line
C. Long Run Average Cost
D. Long Run Equilibrium
15. Perfectly competitive firm
- pressure of competing firms forces them to accept prevailing equilibrium price in market
- always small player in overall market
(1 decision --> Q output)
A. Patent
B. Normal Good
C. Normal Profit
D. Price Taker
16. additional utility decreases with each unit added
A. Long Run Average Cost
B. marginal utility (MU)
C. Market Share
D. Diminishing Marginal Utility
17. shows the possible combinations of two goods that are affordable given the consumer's limited income
A. Pareto Efficient Solution
B. budget constraint line
C. Predatory Pricing
D. Restrictive Practices
18. measure industry concentration by calculating the sum of the squares of market share of each firm
A. Constant Cost Industry
B. Herfindahl-Hirshman Index (HHI)
C. Qualified Joint Profit Maximization
D. marginal utility (MU)
19. Dominated by a small number of firms
- high barriers of entry
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Document Summary

94 multiple choice questions: customer is required to buy one product only if the customer also buys a second product. Supply inelastic (e. g. skilled workers: maximizing utility, increasing cost industry, normal good, inferior good, follows the same rules as budget constraint graph, except with different variables. Firm must produce at least normal profit for the owner to stay in business. = (change in total utility / change in q: marginal utility (mu, diminishing marginal utility, constant cost industry, maximin solution, new firms enter the industry in response to increase in profits, entry, exit. C merger: long run, legal, technological or market forces that discourage and prevent potential competitors from entering a market, maximizing utility, income effect, marginal utility (mu, barriers of entry, firm cannot change usage of fixed inputs. Free entry and exit in the market - implies perfectly elastic demand (hypothetical extreme --> closest e. g. agricultural market)