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which of the following is a characteristic of a perfectly competitive market
c. zero economic profit in the long run
in the long run competitive equilibrium, marginal cost
b. equals the minimum of the ATC
the competitive firm shown in the ajacent graph is in the
a. short run making a profit
P=MC for firms on in
c. perfectly competitive markets
which of the following is correct as it relates to cost curves
b. marginal cost intersects average total cost at the latter's minimum point
if a firm decides to produce no output in the short run, its cost will be
c. its fixed costs
diseconomies of scale arise primarily because
b. of the difficulties involved in managing and coordinating a large business enterprise
which of the following is correct
c. a purely competitive firm is a price taker, while a monopolist is a price maker
the firm in the below graph is in a
b. perfectly competitive market just breaking even
marginal utility is the
b. change in total utility realized by consuming one more unit of a good
what do the income effect, the substitution effect and diminishing marginal utility have in common
d. they all help explain the down sloping demand curve
utility refers to the
a. satisfaction that a consumer derives from a good or service
to maximize utility, a consumer should allocate money income so that the
b. marginal utility obtained from the last dollar spent on each product is the same
the theory of consumer behavior assumes
d. all of the above:

that consumer behave rationally maximizing their satisfaction, that the consumer has limited income, that consumers know much marginal utility they obtain from successive units of various products
the law of diminishing marginal utility states
b. beyond some point additional units of a product will yield less and less extra satisfaction to a consumer
if total utility is increasing, marginal utility
a. is positive but may be decreasing
which of the following would be most likely to have a price elasticity coefficient less than 1
c. an addictive drug
price elasticity of demand shows how
b. quantity demanded responds to price changes
a demand curve is descrived as perfectly elastic if
b. the same price is charged regardless of quantity sold
a demand curve is described as perfectly inelastic if
a. the same quantity is purchased regardless of price
when demand is inelastic, ceteris paribus
d. an increase in price leads to greater total revenue
a price cut will increase the total revenue a firm receives, ceteris paribus, only if the demand for its product is
a. elastic
ceteris paribus, as the number of substitutes for a good increases
b. the price elasticity of demand should become larger
income elasticity of demand measures
the sensitivity of quantity demanded to a change in income of a consumer
which of the following causes demand to be more elastic with respect to price
a. longer periods of time to adjust to a change in price
if the price elasticity of demand is 1.0 and a firm raises its price by 8 percent, the total revenue will
c. not change
if the demand for farm products is inelastic, a good harvest will cause farm revenues to
b. decrease
supply curves tend to be
b. more elastic in the long run because there is time for firms to enter or leave the industry.
if demand of a product is elastic, the value of the price elasticity coefficient is
b. greater than one
for a linear demand curve
d. demand is elastic at high prices
in which of the following instances will total revenue decline
d. price rises and demand is elastic
if a firm's demand for labor is elastic, a union-negotiated wage increase will
c. cause the firm's total payroll to decline
cross elasticity of demand measures how sensitive purchases of a specific product are to changes in
a. the price of some other product
the law of diminishing marginal utility explains why
b. demand curves slope downward
which type of good is most adversely affected by recessions
b. goods for which the income elasticity coefficient is high and positive
marginal product
c. may initially increase, then diminish, and ultimately become negative
which of the following is correct
d. when MP is rising MC is falling, and when MP is falling MC is rising
marginal revenue is the
d. change in total revenue associated with the sale of one more unit of output
for a monopolist, the profit maximizing rate of output occurs where
c. MR=MC
the price charged by a profit maximizing monopolist in the long run occurs
c. at a price on thedemand curve above the intersection where MR=MC
examples of barriers to entry include
b. economies of scale
price discrimination is best described as
c. the selling of an identical good at different prices to different consumers by a single seller
a profit maximizing monopolist wil choose to produce ____ units of output
b. 20
a profit maximizing monopolist will have a total revenue of
a profit maximizing monopolist will have a total cost of
a profit maximizing monopolist will have profit of
which of the following is correct
c. purely competitive firm is a price taker, while a monopolist is a price maker
a natural monopoly occurs when
a. long run average costs decline continuously through the range of demand
with respect to the pure monopolist's demand curve it can be said that
b. price exceeds marginal revenue at all outputs greater than 1
a distinguishing characteristic of monopolistic competition is
b. product differentiation
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