5 In order for the price mechanism to work, we need

Group of answer choices

None of the choices are true.

Many competing firms in each industry.

To have only a few firms in each industry.

To have the government regulate each industry.

6 Which of the following are considered market failures?

Group of answer choices

Monopoly.

Externalizes

The lack of public goods and services.

All of the choices are considered market failures.

7 In the circular flow model, households

Group of answer choices

supply both resources and products.

demand both resources and products.

demand resources and supply products.

demand products and supply resources.

8 "The higher the price of a good or service, the greater the quantity that people are willing to sell" is

Group of answer choices

the law of supply.

the law of demand.

neither the law of demand or the law of supply.

9 A shift from D 1to D 2causes equilibrium price to __________ and quantity to __________.

Group of answer choices

fall; rise

rise; fall

rise; rise

fall; fall

10 A shift from S 1to S 2causes equilibrium price to __________ and quantity to __________.

Group of answer choices

fall; rise

rise; fall

rise; rise

fall; fall

11 Equilibrium price is _____ and equilibrium quantity is _____ units.

Group of answer choices

$6; 10

$8; 16

$8; 10

$4; 4

12 If the government set a price $24, there would be a price ___________, that would cause a ___________ of ______ units.

Group of answer choices

ceiling; shortage; 10

ceiling; surplus; 10

floor; shortage; 10

floor; surplus; 10

13 In general demand curves slope _____ and supply curves slope _____.

Group of answer choices

downward to the right; upward to the right

upward to the right; downward to the right

upward to the right; upward to the right

downward to the right; downward to the right

15 If price were $6, there would be a (shortage or surplus) _____ of _____.

18 Equilibrium price is _______ and equilibrium quantity is _______.

Group of answer choices

$6; 29

$8; 30

$8; 22

$10; 36

19 The equilibrium quantity is about

Group of answer choices

15.5.

16.0.

14.5.

15.0.

20 A decrease in supply means that the quantity supplied

Group of answer choices

does not fall at any price.

falls at all prices.

falls only at the equilibrium price.

falls at a few prices.

21 If demand is inelastic and price is raised

Group of answer choices

quantity demanded will rise and total revenue will fall.

quantity demanded will fall and total revenue will fall.

quantity demanded will fall and total revenue will rise.

quantity demanded will rise and total revenue will rise.

22 The curve in the above graph

Group of answer choices

is a perfectly inelastic demand curve.

is a very elastic demand curve.

is a perfectly elastic demand curve.

is a very inelastic demand curve.

23 If price falls from $100 to $99 and quantity demanded rises from 2 to 3, the price elasticity of demand is

Group of answer choices

1.75.

25.7.

39.8.

0.03.

24 If more substitutes become available demand tends to become ____ elastic, and over time demand tends to become ____ elastic.

Group of answer choices

less; more

less; less

more; less

more; more

26 Demand and Utility Table for Milk Shakes

If the price of milk shakes were $2.00 each, your consumer surplus would be

Group of answer choices

$10.00.

$5.00.

$15.00.

$11.00.

27 Table-Demand and Utility Table for action figures

If the price of action figures was $8.00 each, his consumer surplus would be

Group of answer choices

$32.

$8.

$12.

$16.

29 Given the demand curve in this graph, if price were $3.00, how much is consumer surplus?

Group of answer choices

$10.50

$5.00

$1.50

$0

30 If fixed cost is $8,000, variable cost is $5,000 at an output of 2 and $9,000 at an output of 3, how much is marginal cost at an output of 3?

Group of answer choices

$4,000

$5,000

$8,000

$3,000

31 Use the above table and assume a fixed cost of $200.

At an output of 0, total cost is

Group of answer choices

$300.

$100.

0.

$200.

32 Use the above table and assume a fixed cost of $200.

At an output of 2, A T C is

Group of answer choices

$200.

$300.

$250.

$150.

33 The A V C curve is curve

Group of answer choices

K.

L.

M.

J.

34 The A T C curve is

Group of answer choices

M.

L.

K.

J.

35 The firm's break-even point occurs at an output of

Group of answer choices

70.

55.

40.

30.

36 This firm's most profitable output is at

Group of answer choices

60.

70.

40.

50.

37 The firm's short-run supply curve begins at an output of

Group of answer choices

60.

65.

30.

45.

38 The firm's break-even point occurs at an output of

Group of answer choices

300.

100.

215.

150.

39 The firm's long-run supply curve begins at an output of

Group of answer choices

40.

0.

45.

50.

40 Under perfect competition there must be

Group of answer choices

perfect mobility but not perfect knowledge.

perfect mobility of resources and perfect knowledge.

perfect knowledge but not perfect mobility.

neither perfect mobility nor perfect knowledge.

41 The marginal revenue that would be derived from producing the fourth unit of output is

Group of answer choices

$20.

$18.

$22.

$24.

42 If the firm is maximizing profits, it is producing ____ units of output and charging a price of ____.

Group of answer choices

OF; ON

O G; OM

OF; O L

O G; ON

43 If the firm is maximizing profits, total profit will be

Group of answer choices

M J K L.

N I K L.

O F K L.

L K J M.

44 If the firm is minimizing losses, total loss will be

Group of answer choices

F I H G.

OM K E.

N Q H G.

E K Q N.

45 The monopolist shown in the above graph

Group of answer choices

is taking a loss.

is making a profit.

may be making a profit or breaking even.

is breaking even.

47 The graph above shows a monopolistic competitor

Group of answer choices

in the long run breaking even.

in the short run making a profit.

in the long run taking a loss.

in the short run taking a loss.

49 The key aspect to product differentiation is

Group of answer choices

physical differences.

the buyer's mind.

ambien-co

convenience.

50 Price discrimination means

Group of answer choices

exploiting the working masses by charging the highest single price possible.

paying wages according to race or sex rather than productivity.

eliminating all costs so that only profits are realized.

charging different prices for identical goods that have identical production costs.

51 The definition of monopolistic competition includes

Group of answer choices

many firms and ease of entry and exit.

few firms and ease of entry and exit.

few firms and barriers to entry and exit.

many firms and barriers to entry and exit.

51 This monopolistic competitor is in the

Group of answer choices

short run making a profit.

long run taking a loss.

long run making a profit.

short run taking a loss.

52 If the firm is maximizing profits (minimizing losses), they are making a profit or loss of about ____.

Group of answer choices

$500

$3,000

-$1,000

$2,500

53 Monopolists have more control over prices than monopolistic competitors because

Group of answer choices

since an monopolists is the only competitor in the market, setting prices is no problem.

they can legally collude whereas monopolistic competitors may not.

their prices are always set by the government.

with fewer competitors, they are able to monitor and determine their own prices much easier.

54 A cartel is

Group of answer choices

a group of firms acting like a perfectly competitive industry.

similar to a monopolistic-ally competitive industry.

a group of firms acting under collusion to control output and maximize group profits.

generally legal in the United States.

55 In general, the M R P _____ as output increases.

Group of answer choices

rises

declines

stays the same

The demand for a resource rises as

Group of answer choices

its productivity falls and prices of substitutes resources fall.

its productivity rises and the relative prices of substitute resources rise.

its productivity rises and prices of substitutes resources fall.

its productivity falls and the relative prices of substitute resources fall.

56 As output rises,

Group of answer choices

marginal revenue product rises and marginal physical product falls.

both marginal revenue product and marginal physical product rise.

both marginal revenue product and marginal physical product fall.

marginal revenue product rises and marginal physical product rises.