Quiz #2 [MCQ | Chapters 13,17,18]

Accounting profit is equal to total revenue minus

Economic profit is equal to total revenue minus

Nicole owns a small pottery factory. She can make 1,000 pieces of pottery per year and sell them for €100 each. It costs Nicole €20,000 for the raw materials to produce the 1,000 pieces of pottery. She has invested €100,000 in her factory and equipment: €50,000 from her savings and €50,000 borrowed at 10 per cent. (Assume that she could have loaned her money out at 10 per cent, too.) Nicole can work at a competing pottery factory for €40,000 per year. The accounting profit at Nicole's pottery factory is

Nicole owns a small pottery factory. She can make 1,000 pieces of pottery per year and sell them for €100 each. It costs Nicole €20,000 for the raw materials to produce the 1,000 pieces of pottery. She has invested €100,000 in her factory and equipment: €50,000 from her savings and €50,000 borrowed at 10 percent (assume that she could have loaned her money out at 10 percent, too). Nicole can work at a competing pottery factory for €40,000 per year. The economic profit at Nicole's pottery factory is

If there are implicit costs of production,

If a production function exhibits diminishing marginal product, its slope

If a production function exhibits diminishing marginal product, the slope of the corresponding total-cost curve

The marginal product of labour as production moves from employing one worker to employing two workers is

The production process described above exhibits

Which of the following is a variable cost in the short run?

The average fixed cost of producing four units is

The average total cost of producing three units is

The marginal cost of changing production from three units to four units is

The efficient scale of production is:

When marginal costs are below average total costs,

If marginal costs equal average total costs,

If, as the quantity produced increases, a production function first exhibits increasing marginal product and later diminishing marginal product, the corresponding marginal-cost curve will

In the long run, if a very small factory were to expand its scale of operations, it is likely that it would initially experience

The efficient scale of production is the quantity of output that minimizes

Which of the following statements is true?

The market for hand tools (such as hammers and screwdrivers) is dominated by Draper, Stanley, and Craftsman. This market is best described as

A market structure in which many firms sell products that are similar but not identical is known as

If oligopolists engage in collusion and successfully form a cartel, the market outcome is

Suppose an oligopolist individually maximizes its profits. When calculating profits, if the output effect exceeds the price effect on the marginal unit of production, then the oligopolist

As the number of sellers in an oligopoly grows larger, an oligopolistic market looks more like

When an oligopolist individually chooses its level of production to maximize its profits, it produces an output that is

When an oligopolist individually chooses its level of production to maximize its profits, it charges a price that is

As the number of sellers in an oligopoly increases,

A situation in which oligopolists interacting with one another each choose their best strategy given the strategies that all the other oligopolists have chosen is known as a

Under competition, the price and quantity in this market would be

If the duopolists in this baseball market collude and successfully form a cartel, what is the price that each should charge in order to maximize profits?

If the duopolists in this baseball market collude and successfully form a cartel, how much profit will each earn?

If the duopolists are unable to collude, how much profit will each earn when the market reaches a Nash equilibrium?

The dominant strategy for Sue and Joe is for

Suppose Sue and Joe agreed to collude and jointly maximize their profits. If Sue and Joe were to be able to repeatedly play the game shown earlier and they agreed on a penalty for defecting from their agreement, what is the likely outcome of the game?

Many economists argue that resale price maintenance

Collusion is difficult for an oligopoly to maintain

If ABC Publishing charges separate prices for both products, its best strategy is to charge prices that, when combined, total

If ABC Publising engages in tying, its best strategy is to charge a combined price of:

Laws that make it illegal for firms to conspire to raise prices of reduce production are known as

The most important factors of production are

If a factor exhibits diminishing marginal product, hiring additional units of the factor will

What is the marginal product of labour as the firm moves from using three workers to using four workers?

If the price of output is €4 per unit, what is the value of the marginal product of labour as the firm moves from using four workers to using five workers?

If this profit-maximizing firm sells its output in a competitive market for €3 per unit and hires labour in a competitive market for €8/hour, then this firm should hire

The value of the marginal product of labour is

For a competitive, profit-maximizing firm, the value-of-the-marginal-product curve for capital is the firm's

An increase in the supply of labour

A decrease in the demand for fish

What will a decrease in the supply of fishermen do to the market for capital employed in the fishing industry?

An increase in the demand for apples will cause all but which of the following?

A decrease in the supply of farm tractors will cause all but which of the following?

If both input and output markets are competitive and firms are profit maximizing, then in equilibrium each factor of production earns

An individual firm's demand for a factor of production

An increase in the demand for a firm's output

A competitive, profit-maximizing firm should hire workers up to the point where

Which of the following is not true with regard to workers who have a high value of marginal product?

An increase in the price of automobiles shifts the demand for autoworkers to the

When capital is owned by the firm as opposed to being directly owned by households, capital income may take any of the following forms except

Suppose that a war is fought with biological weapons. The weapons destroy people but not capital. What is likely to happen to equilibrium wages and rental rates after the war when compared to their values before the war?