Term
| 130. “____________________ arises because one firm can meet the entire market demand at a lower average total cost than two or more firms could.” |
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Definition
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Term
| 129. Economists refer to a market structure model characterized by a single seller of a good with no close substitutes and an absolute barrier to entry as |
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Definition
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Term
| Alcoa maintained monopoly power in the production of primary aluminum for more than 50 years through the use of patents and |
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Definition
| ownership of natural resources |
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Term
| 132. Because the monopolist is the only seller in a market, it faces |
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Definition
| a downward-sloping demand curve, which implies price decreases as output increases |
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Term
| 133. Economists refer to a monopolist that sells all of its output for a single price as |
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Definition
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Term
| 134. For the single-price monopolist, |
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Definition
| marginal revenue decreases faster than price decreases as output expands |
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Term
| 135. The single-price monopolist |
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Definition
| produces at the output level where marginal revenue equals marginal cost, provided price exceeds average variable cost and sets price according to the position of the demand curve at that output level |
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Term
| 136. The single-price monopolist makes an economic profit |
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Definition
| if price is greater than average total cost |
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Term
| 137. This firm will maximize profits or minimize losses by producing _______ units of output. |
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Definition
A. 6 <---ANSWER
B. 7
C. 8
D. 9
E. 10 |
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Term
| 138. This firm will charge ____________ for the output determined in the question above. |
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Definition
| a price of $170 (where demand and quantity meet) |
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Term
| 139. This firm will ___________________________ at the output and price levels determined in the two previous questions. |
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Definition
| make an economic profit (because P>AVC) |
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Term
| 140. Given identical cost and demand curves the single-price monopolist |
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Definition
| produces less output and charges a higher price than the perfectly competitive industry |
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Term
| 141. Which of the following forces may reduce or eliminate monopoly profits in the long run? |
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Definition
A. The development of imperfect substitutes for the monopolist’s product
B. The capitalization of profits
C. Monopoly rent seeking
D. All of the forces listed above may reduce or eliminate monopoly profits in the long run. <---- ANSWER |
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Term
| 142. Which of the following conditions must be present for a firm to engage in price discrimination? |
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Definition
| The firm must be able to identify different buyers or groups of buyers willing to pay different prices. |
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Term
| 143. Under first-degree price discrimination |
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Definition
| the seller charges each buyer the maximum price he or she is willing to pay |
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Term
| 144. When a hospital charges an insurance company a lower price than it charges an individual for a given procedure, it is practicing |
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Definition
| third-degree price discrimination |
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Term
| 145. For the first-degree price discriminator |
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Definition
| marginal revenue equals price at all output levels |
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Term
| 146. This first-degree price discriminating firm will maximize profits or minimize losses by producing _______ units of output. |
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Definition
A. 6
B. 7
C. 8
D. 9 <---- ANSWER (where MC meets D)
E. 10 |
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Term
| 147. This first-degree price discriminating firm will charge _____________ for the output determined in the question above. |
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Definition
| prices ranging from $100 to $280 (where D and Q meet, to where D ends) |
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Term
| 148. This firm will _____________________________ at the output and price levels determined in the two previous questions. |
|
Definition
| make an economic profit (P>AVC) |
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Term
| 149. The first-degree price discriminator typically |
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Definition
| makes higher profits and produces more output than the single-price monopolist |
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Term
| 150. According to Section 2 of the Clayton Act |
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Definition
| price discrimination is illegal where its effect may be to substantially lessen competition or tend to create a monopoly |
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Term
| 151. Which of the following forces has reduced the ability of firms to engage in price discrimination? |
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Definition
The success of companies offering relatively “flat” price schedules and
The development and spread of the Internet |
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Term
| 152. Economists refer to the demand for labor services as derived demand |
|
Definition
| because the demand for labor depends on the consumer demand for the final goods and services labor produces. |
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Term
| 153. The increase in a firm’s total revenue (TR) resulting from hiring an additional unit of labor,” is your instructor’s definition of |
|
Definition
| marginal revenue product of labor (MRPL) |
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Term
| 154. Because the firm’s MRPL represents the maximum amount the firm will pay for each additional unit of labor, the MRPL curve represents |
|
Definition
| the firm’s demand curve for labor |
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Term
| 155. Which of the following forces will cause a movement along the labor demand curve? |
|
Definition
| An increase in the wage rate |
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Term
| 156. Which of the following forces will cause a rightward shift of the labor demand curve? |
|
Definition
| An increase in the demand for the good or service labor produces, which increases product price |
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Term
| 157. Which of the following forces will cause a leftward shift of the labor demand curve? |
|
Definition
| a decrease in the productivity of labor |
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Term
| 158. According to human capital theory, an increase in a worker’s education and training increases her productivity and |
|
Definition
|
|
Term
| 159. Economists typically draw the labor market supply curve |
|
Definition
| with a positive slope for its entire length |
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Term
| 160. Other things being equal, an increase in the wage rate |
|
Definition
| results in a movement along the labor supply curve |
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Term
| 161. Assume similar skills are required to teach accounting and to work as an accountant in the business sector. Other things being equal, if wages of business-sector accountants increase, we predict |
|
Definition
| the labor supply curve for accounting teachers will shift leftward |
|
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Term
| 162. Other things being equal, an improvement in working conditions in a given occupation will |
|
Definition
| shift that occupation’s labor supply curve rightward |
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Term
| 163. “The exchange of goods and services across national borders,” is your instructor’s definition of |
|
Definition
|
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Term
| 164. _____________________________ is an international trade theory that predicts trade patterns on the basis of the ability of one country to produce more of a good or service than another country. |
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Definition
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Term
| 165. ____________________________ is an international trade theory that predicts trade patterns on the basis of differences in opportunity costs of production in different countries. |
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Definition
|
|
Term
Australia: Lox (tons) Bagels (tons)
100 0
0 300
New Zealand: Lox (tons) Bagels (tons)
75 0
0 150
166. The opportunity cost of a ton of lox in Australia is |
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Definition
| 3 tons of bagels (300/100) |
|
|
Term
Australia: Lox (tons) Bagels (tons)
100 0
0 300
New Zealand: Lox (tons) Bagels (tons)
75 0
0 150
167. The opportunity cost of a ton of lox in New Zealand is |
|
Definition
| 2 tons of bagels (150/75) |
|
|
Term
Australia: Lox (tons) Bagels (tons)
100 0
0 300
New Zealand: Lox (tons) Bagels (tons)
75 0
0 150
168. The opportunity cost of a ton of bagels in Australia is |
|
Definition
| 0.33 tons of lox (100/300) |
|
|
Term
Australia: Lox (tons) Bagels (tons)
100 0
0 300
New Zealand: Lox (tons) Bagels (tons)
75 0
0 150
169. The opportunity cost of a ton of bagels in New Zealand is |
|
Definition
|
|
Term
| 170. According to the theory of comparative advantage, |
|
Definition
Australia will produce and export Bagels to New Zealand, and New Zealand will produce and export Lox to Australia
-lox: Australia-3, New Zealand-2
-bagels: Australia-0.33, New Zealand-0.5 |
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Term
| 171. Which of the following groups will tend to gain from the opening of trade between Australia and New Zealand? |
|
Definition
| Lox producers in New Zealand and consumers in both countries |
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Term
| 172. ___________________________ is “a quantitative restriction on the import of a good that limits the maximum quantity of a good that may be imported in a given period.” |
|
Definition
|
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Term
| 173. _________________________ is “a tax imposed on a good when it is imported.” |
|
Definition
|
|
Term
| 174. According to our authors, ________________________________ occurs “when a foreign firm sells its exports at a lower price than its cost of production.” |
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Definition
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