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Principles of Microeconomics – Spring 2021
Join Code: 840916
CLASSROOM
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ASSIGNED
22
22
CHAT
Homework 4
Homework
Due in 6 day
Homework
Assignment
#4
Enjoy the homework, learn
more economics and get 5% of
Q1
Homework
In perfect competition, firms
will be able to earn economic
profits in:
Select an answer and submit. For
up/down arrow keys to select an
a
the short run, only.
b
the long run, only.
c
the short and in the
long runs.
d
neither the short or
in the long runs.
d 2
attempts
le
Submit
Q2
Homework
An increase in demand in a
perfectly competitive,
increasing cost industry will
ultimately result in a price
that is ______________ the
original price
Select an answer and submit. For
up/down arrow keys to select an
a
higher than
b
less than
c
equal to
d
either higher than or
equal to
d 2
attempts
le
Submit
Q3
Homework
Consider two services
provided in perfectly
competitive markets. The
price of the most expensive
service costs 50 percent
higher than the price of the
less expensive service. Both
markets are in long-run
equilibrium. What could
possibly explain the higher
price?
Select an answer and submit. For
up/down arrow keys to select an
a
the more expensive
service must have a
greater demand
than the less
expensive service
b
the more expensive
service must have a
higher minimum
average cost than
the less expensive
service
c
the more expensive
service must have
either a greater
demand or a higher
minimum average
cost than the less
expensive service
d
the more expensive
service must have
both a greater
demand and a
higher minimum
average cost than
the less expensive
service
the more expensive
e
service will not
necessarily have a
greater demand or a
higher minimum
average cost than
the less expensive
service
d 2
attempts
le
Submit
Q4
Homework
Given the following data,
what should the perfectly
competitive firm do?
Current production = 1,000
Total costs = \$15,000
Fixed costs = \$6,000
Marginal cost = \$10
Current price = \$10
Select an answer and submit. For
up/down arrow keys to select an
a
continue to produce
in the short and long
runs.
b
continue to produce
in the short run, but
close down in the
long run.
c
expand production
in the short run, but
close down in the
long run.
d
stop producing in
the short run and
leave the industry in
the long run.
e
stop producing in
the short run, but
produce in the long
run once its fixed
costs become
variable.
d 2
attempts
le
Submit
Q5
Homework
Following a decrease in
demand, the perfectly
competitive industry has
equilibrium. As the firm
moves back to a long run
equilibrium, the price will
______________ and the
typical firmÃ¢â‚¬â„¢s production will
______________.
Select an answer and submit. For
up/down arrow keys to select an
a
increase; decrease
b
decrease; decrease
c
increase; increase
d
decrease; increase
e
one cannot tell.
d 2
attempts
le
Submit
Q6
Homework
The perfectly competitive
market price of bananas is
\$0.79 per pound. Marcy sells
100 pounds of bananas. Her
total revenue for selling
bananas is
. Her
marginal revenue for selling
the 100th pound of bananas
is
.
Select an answer and submit. For
up/down arrow keys to select an
a
\$79.00; \$79.00
b
\$79.00; \$0.79
c
\$0.79; \$79.00
d
\$0.79; \$0.79
d 2
attempts
le
Submit
Q7
Homework
The following graph
represents the weekly
costs of production for a
small firm making o ice
chairs. If the short-run
market price for an o ice
chair is \$60 per chair,
(roughly) how many
chairs should the firm
make to either maximize
profits or minimize
losses?
Select an answer and submit. For keyboard na
use the up/down arrow keys to select an answ
a
About 60 chairs per week in the s
run but the firm is making econo
losses.
b
About 60 chairs per week in the s
run and the firm is making zero
economic profit.
c
About 36 chairs per week in the s
run and the firm is making zero
economic profit.
d
About 80 chairs per week in the s
run and the firm is making posit
economic profits.
d 2
attempts
le
Submit
Q8
Homework
The following graph
represents the weekly
costs of production for a
small firm making o ice
chairs in a perfectly
competitive market. If
the market price for
o ice chairs is currently
\$100 per chair we expect
firms to
the
market and the market
price to
.
Select an answer and submit. For keyboard na
use the up/down arrow keys to select an answ
a
Exit; decrease.
b
Exit; increase.
c
Enter; increase.
d
Enter; decrease.
d 2
attempts
le
Submit
Q9
Homework

We know a perfectly
competitive market is
allocatively e icient when:
Select an answer and submit. For
up/down arrow keys to select an
a
The marginal benefit
provided to
consumers of the
equilibrium unit
produced is equal to
the marginal cost of
producing it.
The marginal benefit
b
provided to
consumers of the
equilibrium unit
produced is greater
than the marginal
cost of producing it.
c
The marginal benefit
provided to
consumers of the
equilibrium unit
produced is less
than the marginal
cost of producing it.
d
The marginal benefit
provided to
producers of the
equilibrium unit
produced is equal to
the marginal cost of
producing it.
d 2
attempts
le
Submit
Q10
Homework
The following graph
shows cost information
for a firm in a perfectly
competitive industry. If
the firm is representative
of all firms in the
industry, what will be the
long-run equilibrium
price in the market?
T
i
d
b i
d 2
attempts
le
Submit
Q11
Homework
Which of the following are
characteristics of a true
monopoly market?
I. Possibility for normal
profits in the long run
II. Possibility for economic
profits in the long run
III. No close substitutes to the
good/service
IV. Legal, technological, or
other barriers to market
entry
Select an answer and submit. For
up/down arrow keys to select an
a
II only
b
I, III, and IV
c
II and IV
d
I, II, III, and IV
d 2
attempts
le
Q12
Homework
Submit
A natural monopoly is a
market in which:
Select an answer and submit. For
up/down arrow keys to select an
a
Patent protection
guarantees the
existence of the
monopoly
b
Firms occasionally
enter the market but
cannot last and
eventually exit
c
A firm enjoys a
governmentsanctioned
monopoly in a
market with low
fixed costs and high
variable costs
d
Consumers benefit
from the existence of
the monopoly, so
long as the
monopoly is wellregulated
d 2
attempts
le
Submit
Q13
Homework
Evaluate the following
statement by an antitrust
lawyer. Ã¢â‚¬Å“Monopolies always
want to charge the highest
price the market will bear.Ã¢â‚¬Â
Select an answer and submit. For
up/down arrow keys to select an
a
Both a monopoly
and a competitive
firm charge the
highest price the
market will bear.
b
It is more accurate in
describing a
perfectly
competitive firmÃ¢â‚¬â„¢s
behavior.
c
It is accurate in
describing a
monopolyÃ¢â‚¬â„¢s
behavior.
d
Neither firm will
charge the highest
price the market will
bear.
d 2
attempts
le
Submit
Q14
Homework
In the short run, a copyright
on a good will mean that the
producing firm will likely
produce:
Select an answer and submit. For
up/down arrow keys to select an
a
more than the
allocatively e icient
amount of output.
less than the
b
allocatively e icient
amount of output.
c
the allocatively
e icient amount of
output.
d
One cannot tell. It
depends upon the
size of the external
benefits associated
with the good.
d 2
attempts
le
Submit
Q15
Homework
A profit-maximizing
monopoly will be able to
earn economic profits in
which of the following?
Select an answer and submit. For
up/down arrow keys to select an
a
only if there is
su icient demand
b
only if there are
barriers to entry
c
only if there are
barriers to entry and
su icient demand
d
Profit-maximizing
monopolies will earn
economic profits in
all circumstances.
d 2
attempts
le
Submit
Q16
Homework
A monopolist produces a
level of output that can be
described as follows. The
output is:
Select an answer and submit. For
up/down arrow keys to select an
a
where marginal
revenue is greater
than marginal cost;
and too little for
allocative e iciency.
b
where marginal
revenue is less than
marginal cost; and
too much for
allocative e iciency.
c
where marginal
revenue is equal to
marginal cost; and
too much for
allocative e iciency.
d
where marginal
revenue is equal to
marginal cost; and
too little for
allocative e iciency.
e
Where price is
greater than
marginal revenue;
but an amount that
will be allocatively
e icient.
d 2
attempts
le
Submit
Q17
Homework
A monopoly will be
economically e icient if it
produces where the marginal
cost
Select an answer and submit. For
up/down arrow keys to select an
a
is at a minimum.
b
equals the average
cost.
c
is greater than the
average cost.
d
is less than the
average cost.
e
none of the above is
true.
d 2
attempts
le
Submit
Q18
Homework
What will happen if a
monopoly raises its price?
Select an answer and submit. For
up/down arrow keys to select an
a
Quantity demanded
will increase
b
Quantity demanded
will stay the same
c
Quantity demanded
will fall to zero
d
Quantity demanded
will fall, but not
necessarily to zero
d 2
attempts
le
Submit
Q19
Homework
What are the optimal
condition for a monopoly to
develop and survive?
Select an answer and submit. For
up/down arrow keys to select an
a
There is only one
firm in the market.
b
The barrier to entry
is very high.
c
The good produced
by the monopoly
firm has no close
substitution.
d
All of the above.
d 2
attempts
le
Submit
Q20
Homework
When a monopoly is
producing profit-maximizing
quantity, what is the
relationship between
marginal cost and price?
Select an answer and submit. For
up/down arrow keys to select an
a
Marginal cost is
greater than the
price
b
Marginal cost is
equal to the price
c
Marginal cost is less
than the price.
d 2
attempts
le
Submit
Q21
Homework
The graph illustrates an
unregulated, profitmaximizing monopolist.
To maximize the pro ,
the firm will produce
what quantity and sell it
at what price?
Select an answer and submit. For keyboard na
use the up/down arrow keys to select an answ
a
Q5; P4
b
Q4; P2
c
Q3; P5
d
Q1; P1
d 2
attempts
le
Submit
Q22
Homework
The graph illustrates an
unregulated, profitmaximizing monopolist.
Assuming the firm
produces the profitmaximizing level of
output, it will earn total
revenue equal to ___
Select an answer and submit. For keyboard na
use the up/down arrow keys to select an answ
a
Q1xP1
b
Q3xP5
c
Q3xP3
d
Q5xP4