I need an ultimate study guide for micro economics with all the terms, formulas example problems etc, i have an open book final and am stressing.

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I Chrome File Edit View History Bookmarks Profiles Tab Window Help (3 as 59% Wed12i42AM q 55 9: Course X EMen'si X integra X Untitlez X frl] O Q i ' _ ' 'L Mall S X AllOpp X P Content X Bb12330C X 9' instituti X it AskaC X Orderl X C' lei learn-us-eastlprod-fleet01xythos.contentblackboardcdn.com _ 1233009 This is an example ofa nal exam, which I gave two years ago.Your will be similar. One big difference is that this one has multiple choice, but yours will have vocabulary matching questions instead (like your midterm exam). True/False (20 Points): 1. E The minimum wage is a price ceiling and according to classical economic theory it can cause unemployment. 2. I Economic costs measures all costs, including opportunity costs. 3 ./ 4. k: A perfectly competitive rm will always make zero economic prots in the long run because of the assumption of perfect information. . I In the short-min a rm will always shutdown if it has negative prots. xed costs are ignored because they are . I In computing marginal costs, from increases in variable costs. constant, therefore any additional costs come 6. 1 Pubic goods are both excludable and rival. . E The number of machines that are available to a rm's workers is an example of human capital. 7 . I If the government wants to reduce the consumption of a particular good it will utilize an excise tax. maximizing level of production [Q*) for both perfectly s and monopolies occurs where marginal revenues equal . i The prot competitive rm marginal costs. 10. E A monopoly rm can sell all it wants at any price. Chrome File Edit View History Bookmarks Profiles Tab Window Help GE $ 59% [4 Wed 12:42 AM Q Mail - Su X All Oppo X Content X Bb 1233009 X InstitutionX Ask a Qu X Order ID X Course l X G Men's D X G integrati X Untitled X + C learn-us-east-1-prod-fleet01-xythos.content.blackboardcdn.com/blackboard.learn.xythos.prod/57853691332dd/1233009?X-Blackboard-Expiration=1670403... OK Update E 1233009 2/7 100% + Multiple Choice (30 points) 1. Which type of capital refers to relationships that facilitate economic activity? a) Natural capital Social capital c) Financial capital d) Human capital a. Manufactured capital 2. Which one of the following is an economic, but not an accounting, cost? a. The cost of paper by The wages a business owner could have received from a full-time job elsewhere C. The wages paid to a part-time employee d. Taxes e. Interest paid on a loan 3. The relationship between a firm's level of output and level of inputs is given by ... a) a marginal cost curve. 2 by a production function. a production possibilities frontier. d) an average cost curve. e) an economic cost curve. 4. The short run marginal cost curve in the traditional microeconomic model eventually rises (is upward sloping) because of ... a diminishing marginal returns. b) rising fixed costs. c) diseconomies of scale. 3 e diminishing marginal costs. e) increasing marginal productivity of variable inputs. 5. Which one of the following is not a condition of perfect competition? a) A large number of very small firms (b) Firms' production functions display increasing returns c) All units sold are identical L 702 ... O 7Chrome File Edit View History Bookmarks Profiles Tab Window Help GE $ 59% [4 Wed 12:42 AM Q Mail - Su X All Oppo X Content X Bb 1233009 X Institution X Ask a Qu X Order ID X Course l X G Men's D X G integrati X Untitled X + C learn-us-east-1-prod-fleet01-xythos.content.blackboardcdn.com/blackboard.learn.xythos.prod/57853691332dd/1233009?X-Blackboard-Expiration=1670403... OK Update E 1233009 2/7 100% + a) A large number of very small firms ")Firms' production functions display increasing returns All units sold are identical d) Producers can freely enter or exit the market Buyers and sellers have perfect information. 2 6. The analysis of oligopolistic behavior is difficult because a) there are few real-world examples of oligopolies for economists to study. 3 b) oligopolists make decisions independently of each other. firms in oligopolistic industries react to each other's behavior in many ways because they are interdependent. d) economists have paid little attention to the topic in recent years. e) oligopolistic firms are usually run by people as wild and unpredictable as Microsoft's Bill Gates 7. If a good is nonrival that means... ") its owner can prevent others from consuming the and 702 L ... O 7 cityI' Chrome File Edit View History Bookmarks Profiles Tab Window Help (3 a 59% Wed12i42AM q 55 O Q a; Mail-S X AllOpp X P Content X Bb12330C X 9' Instituti X it AskaC X Orderl X 9: Course X EMen'si X integra X _ Untitlez X C' lei learn-us-eastlprod-fleet01xythosicontentrblackboardcdnrcom frl] _ 1233009 7, Ifa good is nonrival that means.\" 3) its owner can prevent others from consuming the good its owner cannot prevent others from consuming the good. it can be consumed by multiple people at a time without reducing consumer's utility, d) it cannot be consume by multiple people at a time without reducing consumer's utilityr e) None of the above 8. Whit: one of the following is not a condition of monopolistic competition? he rms are interdependent b] Each sellers' product is slightly different from that offered by other sellers c) Numerous small buyers and sellers (1) Buyers and sellers have perfect information e) Barriers to entry exist 9. In economic theory, purely competitive firms, monopolists, and monopolistically competitive rms all: set price equal to marginal cost to decide the level of output. maximize prots where MR = MC. c) face downward-sloping demand curves, d) are able to set prices, depending on \"what the market will bear.\" e) none of these. 10. Using the budget constraint and indifference curves, a consumer will maximize their utility by: a) Purchasing any combination of the two goods along their budget constraint b) Purchasing any combination of the two goods that is on the highest ndifference curve and that's inside their budget constraint. 6 Purchasing the combination of the two goods that' s on the highest indifference curve and still within their budget. d) None of the above Chrome File Edit View History Bookmarks Profiles Tab Window Help GE $ 59% [4 Wed 12:42 AM Q Mail - Su X All Oppo X Content X Bb 1233009 X Institution X Ask a Qu X Order ID X Course l X G Men's D X G integrati X Untitled X + -7 C learn-us-east-1-prod-fleet01-xythos.content.blackboardcdn.com/blackboard.learn.xythos.prod/57853691332dd/1233009?X-Blackboard-Expiration=1670403... OK Update E 1233009 417 100% + Use the following scenario to answer questions 11 & 12 Suppose the following table represents the profit outcomes for two competitors in a oligopoly market. Each company has to decide if it should invest in a new product or not to invest and continue selling its existing product. Samsung New Product No New Product Apple New Product $4 Million $4 Million $9 Million $2 Million No New $2 Million $9 Million $6 Million $6 Million Product 11. What is the non-cooperative solution to this game? a. Both companies will NOT invest in a new product. 2 CD, Both companies will invest in a new product. Apple will invest in a new product but Samsung will not. d. Samsung will invest in a new product but Apple will not. 12. Is there a solution to this game where both companies would be better off if they cooperated? a. Yes, both should agree to not invest in a new product. b. Yes, both should agree to invest in a new product. c. No, there is no cooperative solution d. Apple would never agree to cooperate because it would make more 3 money by not doing so no matter what Samsung does. 13. A free rider is someone who... a. exploits a common property resource b. refuses to purchase an artificially scarce good. c. uses a non-excludable good without paying for it. d. purchases a transferable quota. e. None of the above 14. A natural monopoly exists because: al A natent given out by the government 702 ... O 7 4 oChrome File Edit View History Bookmarks Profiles Tab Window Help GE $ 59% [4 Wed 12:42 AM Q Mail - Su X All Oppo X Content X Bb 1233009 X InstitutionX Ask a Qu X Order ID X Course l X G Men's D X G integrati X Untitled X + -7 C learn-us-east-1-prod-fleet01-xythos.content.blackboardcdn.com/blackboard.learn.xythos.prod/57853691332dd/1233009?X-Blackboard-Expiration=1670403... OK Update E 1233009 417 100% + 13. A free rider is someone who... a. exploits a common property resource. b. refuses to purchase an artificially scarce good. c. uses a non-excludable good without paying for it. d. purchases a transferable quota. e. None of the above 14. A natural monopoly exists because: a) A patent given out by the government The good's production faces economies of scale relative to the size of the market. c) The good's production diseconomies of scale relative to the size of the market. d) The market is not profitable so no other firms enter the market 2 15. Monopolistically competitive firms do not get to keep their profits in the long run because of the assumption of ... a) Perfect information b) Many firms c) Differentiated product d) No barriers to entry or exit. 3 Short Answer (20 Points): 702 ... O .6 7 Play CitvChrome File Edit View History Bookmarks Profiles Tab Window Help GE $ 59% [4 Wed 12:42 AM Q Mail - Su X All Oppo X Content X Bb 1233009 X InstitutionX Ask a Qu X Order ID X Course l X G Men's D X G integrati X Untitled X + -7 C learn-us-east-1-prod-fleet01-xythos.content.blackboardcdn.com/blackboard.learn.xythos.prod/57853691332dd/1233009?X-Blackboard-Expiration=1670403... OK Update E 1233009 5 / 7 | 100% + Short Answer (20 Points): 2 1. Jill plans to spend all of her income each week on DVDs and Books. Suppose that she has an income of $300. The price of a DVD is $30 and the price of a book is $20. Draw and carefully label Jill's budget constraint. Suppose that her optimum consumption bundle is 4 DVDs and 9 books. Use an indifference curve to show this on your graph. DVDS 10 4 3 IC 19 yaS BOOKS 2. Briefly explain why governments choose to provide public goods. Why not leave it up to the market to provide these goods? (please explain using the economic concepts we used in class). Public goods are both non-excludable ( it is impossible or costly to stop Someone from using the good once it is produced ) and nonrival ( more than one person can use it without reducing utility ) . Therefore it suffers from the free- rider problem . People will plot pay for it . They will just wait until someone else does . 3. Below represents the production in a printing office. The only variable cost in production is labor. The fixed costs include the cost of renting the small office and the purchase of one copier machine. Fill in the missing values and draw the total product and marginal product curves. Briefly explain why the marginal product curve has that particular shape. Labor 4 TP (1000 Marginal Fixed Variable Total copies/hour) Product Costs Costs Costs TP 0 0 $1000 $0 D 1 1 1000 $20 1200 5 702 O DEC ... 7 AChrome File Edit View History Bookmarks Profiles Tab Window Help GE $ 59% [4 Wed 12:43 AM Q Mail - Su X All Oppo X Content X Bb 1233009 X InstitutionX Ask a Qu X Order ID X Course l X G Men's D X G integrati X Untitled X + -7 C learn-us-east-1-prod-fleet01-xythos.content.blackboardcdn.com/blackboard.learn.xythos.prod/57853691332dd/1233009?X-Blackboard-Expiration=1670403... OK Update E 1233009 6 / 7 | 100% + The marginal product starts to fall ( curve is downward sloping ) because of, the law of diminishing returns . If you add more workers to , the same variable de inputs each additional worker will 4. Briefly explain why monopolistically competitive firms have market power (they be less are not price takers like perfectly competitive firms). How does this impact the Drochuclive 3 shape of the demand curve (horizontal, relatively flat, steep, etc). Hint: it has to do with one of the assumptions we make about this type of market. Because these firms have a differentiated product , which means some customers prefer one particular' firm's good over the others. This means that they can raise their price and Still keep some customers ( unlike perfectly comp. firms). S their demand curve is downward sloping . But not as steel as monopoly, because there are substitutes Long Answer (30 points): 1. Assume that the market for roasted coffee beans is perfectly competitive. Suppose the cost structure for the production of coffee beans for a single roasting company is as follows. Total product is in crates of roasted coffee beans (100lbs). 5 TP (Q) TC MC ATC 0 $150 1 $200 50 200 $225 25 112.5 3 $275 50 $350 5 $450 90 a. Fill in the missing values. Keep proclucing b. Suppose the market price for a crate of coffee beans is $75 per 100 lbs. 4 units 6 hemuse If What is the profit maximizing level of output? What is this firm's profit? #50 702 ... O 7Chrome File Edit View History Bookmarks Profiles Tab Window Help GE $ 59% [4 Wed 12:43 AM Q Mail - Su X All Oppo X Content X Bb 1233009 X InstitutionX Ask a Qu X Order ID X Course l X G Men's D X G integrati X Untitled X + -7 C learn-us-east-1-prod-fleet01-xythos.content.blackboardcdn.com/blackboard.learn.xythos.prod/57853691332dd/1233009?X-Blackboard-Expiration=1670403... OK Update E 1233009 6 / 7 | 100% + Long Answer (30 points): 1. Assume that the market for roasted coffee beans is perfectly competitive. Suppose the cost structure for the production of coffee beans for a single 3 roasting company is as follows. Total product is in crates of roasted coffee beans (100lbs). TP (Q) TC MC ATC 0 $150 1 $200 50 200 2 $225 25 412.5 3 $275 50 $350 8 7.5 $450 90 a. Fill in the missing values. Keep producing b. Suppose the market price for a crate of coffee beans is $75 per 100 lbs. 4 units because if What is the profit maximizing level of output? What is this firm's profit? 50 they shut down . Will this firm keep producing in the short run or shut down? Explain. they would have. Draw the graphs for the market for roasted coffee beans as well as for the to pay their FC, individual firm above. (2 graphs needed, on the individual firm graph draw the D/MR curve, MC curve, and the ATC curve and the area for Which is $150 profits). on back and more the. Briefly explain what would happen to the profits of this firm in the long the $50 loss if 5 they Keep operatingull and why. (No graph necessary) . Suppose we have the following cost structure for a pure monopoly. QD Price Total Marginal Total Cost Marginal Revenue Revenue Cost 0 $1000 $50 $800 300 800 $200 150 W N H $600 200 400 $600 400 $400 1200 $1100 500 a. Fill in the missing values b. What is the profit maximizing quantity? What is the price that it will 6 charge? 702 ... 7 AChrome File Edit View History Bookmarks Profiles Tab Window Help GE $ 59% [4 Wed 12:43 AM Q Mail - Su X All Oppo X Content X Bb 1233009 X InstitutionX Ask a Qu X Order ID X Course l X G Men's D( X G integrati X Untitled X + -7 C learn-us-east-1-prod-fleet01-xythos.content.blackboardcdn.com/blackboard.learn.xythos.prod/57853691332dd/1233009?X-Blackboard-Expiration=1670403... OK Update E 1233009 6 / 7 | 100% + $600 1200 400 $600 400 W N $400 1200 $1100 500 a. Fill in the missing values b. What is the profit maximizing quantity? What is the price that it will charge? Q X = 2 P = $600 c. What are this firm's profits? = $600 d. Will this firm get to keep its profits in the long run? Explain why or why not. yes, because of barriers to entry e. Draw the graph for this monopoly. Be sure to draw the demand curve, the MC MR curve and the MC & ATC curves. Label the profit maximizing level of D output and the price the monopoly will charge. Also draw and label the area for profits. f. Label the area of deadweight loss due to monopoly on your graph above. 160 2 5 Ate D Long Answer # 1 part d and e 6 P P ATC Coffee Individual Firm MKt MC D . HA curve shifts up The reduces Until Profits - 0 81.5 D D= MR 15-75 702 ... O 7 oChrome File Edit View History Bookmarks Profiles Tab Window Help GE $ 59% [4 Wed 12:43 AM Q Mail - Su X All Oppo X Content X Bb 1233009 X InstitutionX Ask a Qu X Order ID X Course l X G Men's D X G integrati X Untitled X + -7 C learn-us-east-1-prod-fleet01-xythos.content.blackboardcdn.com/blackboard.learn.xythos.prod/57853691332dd/1233009?X-Blackboard-Expiration=1670403... OK Update E 1233009 7/7 | 100% + Long Answer # 1 part d and e P P Coffee Individual Firm ATC MKt MC 81.5 D D= MR 8 73 5 D Q () Because firms are experiencing a loss some will 6 Start to shut down as they reach their long run . As firm shut down supply will fall, which pushes the P up on the market . For the individual firm, if they are still in the market they can charge this new higher prince and thes their profits - 0 charge this new higher price and their D = MR curve shifts up This reduces loss This will heep happening 702 ... O DEC 7 4 OChrome File Edit View History Bookmarks Profiles Tab Window Help GE $ 59% [4 Wed 12:43 AM Q Mail - Su X All Oppo X Content X Bb 1233009 X InstitutionX Ask a Qu X Order ID X Course l X G Men's D X G integrati X Untitled X + -7 C learn-us-east-1-prod-fleet01-xythos.content.blackboardcdn.com/blackboard.learn.xythos.prod/57853691332dd/1233009?X-Blackboard-Expiration=1670403... d OK Update E 1233009 717 100% + () Because firms are experiencing a loss sore will Start to shut down as they reach their long run . As firm shut down supply will fall, which pushes the P up on the market . For the individual firm, if they are still in the market they can charge this new higher price and their D = MR curve shifts up This reduces 5 their loss. This will help happening Until Profits = 0 6 charge this new higher prince and thes their profits - 0 702 ... O 7