Thanks for joining the Buddy Mentorship Program! This program is designed to
create a broader network among PBL members, while having fun and being
competitive. This semester, the goal is to earn 100 points with your buddy by
Consumers who clip and redeem discount coupons:
A. Exhibit the same price elasticity of demand for a given
product than consumers who do not clip and redeem
B. Exhibit more price elasticity of demand for a given
product than consumers who do not
Which of the following conditions is not required for price
Buyer with different elasticities must be physically separate from each other.
The practice of price discrimination is associated with pure
monopolists have cons
Which of the following is one of the four simplifying assumptions made in constructing the production possibilities
The economy is fully employed and is using least-cost methods of production
All of the following would affect the position of a coun
Assume that in a perfectly competitive market, a firm's cost are
Marginal Cost= average variable cost at $20
Marginal Cost= average total cost at $30
Marginal Cost= average revenue at $25
What price will this firm charge? Explain how the firm determined t
Private goods are characterized by:
rivalry and excludability.
Which of the following statements is correct about
measuring collective demand for public and private goods?
Private good demand is found by horizontally adding individual demand curves;
Confronted with the market price of its product, a purely competitive producer will ask, which three questions?
3) what economic profit or loss will we realize if we produce this product.
Mutual interdependence would tend to limit control over price in which market model?
Under which market model are the conditions of entry into the market easiest?
Local electric or gas utility companies mostly operate in which m
Allocative efficiency occurs when the:
A. Minimum of average total cost equals average revenue
B. Minimum of average total cost equals marginal revenue
C. Marginal cost equals the marginal benefit to society
D. Marginal revenue equals marginal benefit to
_ profits in a competitive industry will attract new firms into the industry.
When an increase in product demand results in economic profits
industry expansion occurs and thus resource demand increases resource prices, as well as the minimum ave
We would expect an industry to expand if firms in that industry are:
earning economic profits.
Which of the following will not hold true for a competitive firm in long-run equilibrium?
P equals AFC
Assume a purely competitive increasing-cost industry is
Marginal revenue is the:
change in total revenue associated with the sale of one more unit of output
Which of the following statements is correct?
The demand curve for a purely competitive firm is perfectly elastic but the
demand curve for a purely compet
The theory of creative destruction was advanced many years ago by:
Creative destruction is least beneficial to:
workers in the "destroyed" industries.
Which of the following is an example of creative destruction?
A competitive firm may realize an economic profit or loss in the _ run but will earn only a normal profit in the
In pure competition, society's resources are allocated efficiently when:
Profit-motivated firms produce output to the point
Suppose that sales in an industry in a particular year are
$600 million and sales by the top four sellers are $200
million, $150 million, $100 million, and $50 million
respectively. We can conclude that
concentration ratio is more than 80 percent
At the Amarillo Piano Company, the average product of labor stays constant at 5, regardless of how much labor is
employed. This implies that:
The marginal product of labor is constant
At what point does marginal product equal average product?
The long-run supply curve would be downsloping in:
A decreasing-cost industry
Total revenue for producing 8 units of output is $48. Total
revenue for producing 9 units of output is $63. Given this
Marginal revenue for producing the ninth
compared to pure competition, oligopolistic industries may result in
1) more technological advances because oligopoly firms earn economic profits to fund research and development.
2) more technical advances because oligopolies have assurances of rewards c
Candy Cane Corporation (CCC) produces 100,000 boxes
of candy bars per year which sell for $3 a box. If
variable costs are $2 per box, and it has $125,000 in
fixed operating costs, in the short run the CCC should:
Keep producing as variable costs are cover
Allocative efficiency occurs whenever:
it is impossible to produce a net benefit for society by changing the combination of goods and services produced.
Entrepreneurs in purely competitive industries:
innovate to lower operating costs and generate short-r
Economic profits are calculated by subtracting:
explicit and implicit costs from total revenue.
Suppose that a business incurred implicit costs of $200,000
and explicit costs of $1 million in a specific year. If the firm
sold 4,000 units of its output at
oligopolists often compete through product development and advertising instead of price because
product development and advertising are relatively difficult to copy.
when firms in an oligopoly _, their payoffs will be greater than if
a market structure in which one firm sells a unique product, into which entry is blocked, in which the single firm
has considerable control over product price, and in which non price competition may or may not be found.
As the area between the Lorenz curve and diagonal gets larger, the Gini ratio:
Rises to reflect greater inequality
When taxes and transfer payments are taken into account, the distribution of income in the United States:
Is more equally distributed
Which of the following laws prohibited mergers by stock acquisition if the effect was to lessen competition?
Clayton Act of 1914
obligate a purchaser of product X to also buy product Y from the same seller.
The Celler-Kefauver Act of 19
the firm should produce in the short run so long as the price
exceeds the average variable cost.
a firm with no fixed cost
is really in the long run.
if a firm's current revenues are less than its current variable costs, it should shut down.
In the short run the Sure-Screen T-Shirt Company is
producing 500 units of output. Its average variable costs are
$2.00 and its average fixed costs are $.50. The firm's total
Suppose that, when producing 10 units of output, a firm's
Cash expenditures a firm makes to pay for resources are called:
Which would be an implicit cost for a firm? The cost:
Of wages foregone by the owner of the firm
If a firm's revenues just cover all its opportunity costs, then:
What two basic philosophies underlie how an economy's tax
burden is assigned?
Benefits-received and ability-to-pay.
A factory, mine, store or warehouse that performs one or
more functions in making and distributing goods and
A group o
Which is true under conditions of pure competition?
No single firm can influence the market price by changing its output
Price is constant or "given" to the individual firm selling in a purely competitive market because:
Each seller supplies a negligible