FREE BUSINESS AND STUDY GAMES ABOUT ECON 201

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FREE BUSINESS AND STUDY GAMES ABOUT ECON 201

(MICRO) EXAM QUESTIONS

Actual Qs and Ans Expert-Verified Explanation

This Exam contains:

-Guarantee passing score -203 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation

Question 1: Define the law of demand?

Answer:

The negative (inverse) relationship between price and quantity demanded.Question 2: REfer to the above diagram. At output C production will result in an economic profit.

Answer:

True (it is at equilibrium :))

Question 3: To get credit for this question, mark the answer I gave you during the reivew.

Answer:

poindexter Question 4: Assuming demand is held constant, a decrease in supply will result in a new market equilibrium in which

Answer:

price is increased and quantity sold is reduced

Question 5: 28. The long-run price charged by the monopolistically competitive firm attempting to maximize profits . . .

Answer:

will be equal to ATC Question 6: REfer to the diagram above. At the profit-maximizing level of output, the firm will receive

Answer:

an economic profit of AB times BH Question 7: An increase in demand accompanied by an increase in supply will increase the equilibrium quantity but the effect on equilibrium price will be indeterminate

Answer:

true Question 8: When total product is increasing at an increasing rate, marginal product is:

Answer:

postiive and increasing Question 9: An industry is expected to expand if firms in the industry are earning positive...

Answer:

economic profits

Question 10: Based on the graph above, the firm is earning

Answer:

zero economic profits (becasue MR or D is below ATC) Question 11: Which of the above properly depicts the relationships TP, AP AND MP?

Answer:

The one where MP intersects AP at it's maximum, and the one where TP reaches a maximum when MP reaches zero.Question 12: An increase in quantity supplied might be caused by an increase in production coss.

Answer:

false

Question 13: 35. The marginal utility of a second copy of today's newspaper vending machine is . . .

Answer:

close to zero Question 14: If the price of a good increases, it will make th emarginal utility per dollar for the good rise, and the good will become more attractive to the consumer

Answer:

false Question 15: To maximize utility a consumer should allocate money income so that the

Answer:

• marginal utility obtained from the last dollar spent on each product is the same.

Question 16: Opportunity cost is defined as

Answer:

the value of the best foregone alternative Question 17: The concept of diminishing marginal utility is best exemplified by which of the following statements?

Answer:

The more bags of potato chips a person eats, the less additional satisfaction she gets from consuming another bag Question 18: If you operated a small bakery, which of the following would most likely be a variable cost in the short run?

Answer:

baking supplies (flour, salt, etc) Question 19: 43. Suppose the demand for strawberries rises sharply, resulting in an increased price of strawberries. As it relates to demand for strawberry pickers, we would expect the . . .

Answer:

MRP curve to shift to the right

Question 20: ssume that a restaurant is hiring labor in an amount such that the MRC of the last worker is $16 and her MRP is $12. On the basis of this information we can say that . . .

Answer:

profits will be increased by hiring fewer workesr

Question 21: A monopolistically competitive firm has a ....

Answer:

highly elastic demand curve

Question 22: In product markets

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businesses sell products to households Question 23: The demand curves for firms in a purely competitive industry are perfectly elastic.

Answer:

True Question 24: A firm sells a product in a purely competitive market. The marginal cost of the product at the current output is $5.00 and the market price is $5.00. What should the firm do?

Answer:

Shut down if the minimum possible average variable cost is $5.25 Question 25: Refer to the table 1 above. The equilibrium price is:

Answer:

both b and c? $5 and $25 Question 26: Entry into a monopolistically competitive industry is typically blocked

Answer:

false

Question 27: The production possibilities curve represents

Answer:

All efficient combinations of two goods attainable with a fixed set of resources and every possible combination of two goods that can be produced when the set of fixed resources is fully emoployed