HomeTextbook Notes300,000US110,000

ECON 102 Chapter Notes - Chapter 18: Graphical Model, Economic Equilibrium, Perfect Competition

37 views3 pages

20 Jan 2017

School

University of Illinois

Department

Course

Professor

For unlimited access to Textbook Notes, a Class+ subscription is required.

apricotsalmon423 and 1 other unlocked

ECON 102 Full Course Notes

ECON 102 Full Course Notes

Related Documents

ECON 102 Chapter Notes - Chapter 17: Marginal Revenue, Perfect Competition, Marginal Cost

ECON 102 Chapter 19-21: Econ 102 Lesson 19-21 Notes

cerisehamster618

[ECON 102] - Final Exam Guide - Everything you need to know! (35 pages long)

Related Questions

A firm sells its product in a perfectly competitive market where other firms charge a price of $120 per unit. The firm's total costs are C(Q) = 50 + 12Q + 2Q2.

a. How much output should the firm produce in the short run? units

b. What price should the firm charge in the short run? $

c. What are the firm's short-run profits? $

d. What adjustments should be anticipated in the long run? No firms will enter or exit at these profits. The exit will occur since these economic profits are too low. Entry will occur until economic profits shrink to zero.

1.
If firms in a monopolistically competitive market are earningpositive profits,
A) firms will likely be subject to regulation.
B) barriers to entry will be strengthened.
C) some firms must exit the market.
D) new firms will enter the market.
2.

Panel c in the set of figures shown is consistent with a firm in amonopolistically competitive market that is

A) earning profit and is in both short-run and long-runequilibrium.
B) earning economic profit and is in short-run equilibrium, but notlong-run equilibrium.
C) earning profit and is in long-run equilibrium, but not short-runequilibrium.
D) earning a negative profit and is not in equilibrium.
3.
When a profit-maximizing firm in a monopolistically competitivemarket is producing the long-run equilibrium quantity,
A) its marginal revenue will exceed its marginal cost.
B) its average revenue will equal its marginal cost.
C) it will be earning positive economic profits.
D) its demand curve will be tangent to its average-total-costcurve.
4.
Monopolistic competition differs from perfect competition becausein monopolistically competitive markets
A) each of the sellers offers a somewhat different product.
B) strategic interactions between firms is vitally important.
C) there are barriers to entry.
D) all firms can eventually earn economic profits.
5.
The free entry and exit of firms in a monopolistically competitivemarket guarantees that
A) economic losses can persist into the long run, but not economicprofits.
B) both economic profits and economic losses can persist into thelong run.
C) economic profits can persist into the long run, but not economiclosses.
D) both economic profits and economic losses disappear in the longrun.
6.

Panel (a) shows a profit-maximizing monopolistically competitivefirm that is

A) All answers are correct
B) earning a zero profit.
C) charging a price that is equal to average total cost.
D) in long-run equilibrium.
7.
Since a firm in a monopolistically competitive market faces a
A) perfectly elastic demand curve, it will always operate withexcess capacity.
B) downward-sloping demand curve, it will always operate atefficient scale.
C) perfectly inelastic demand curve, it will always operate atefficient scale.
D) downward-sloping demand curve, it will always operate withexcess capacity.
8.
In a monopolistically competitive market,
A) firms can enter or exit the market without restriction.
B) each firm takes the price of its product as given.
C) each firm produces a product that is essentially identical tothe products of other firms in the market.
D) there are only a few sellers.
9.
The fact that there is a great deal of advertising of menâs shavingproducts indicates that
A) it costs firms very little to produce those products.
B) the market for those products is perfectly competitive.
C) those products are highly differentiated.
D) All answers are correct
10.
A profit-maximizing firm in a monopolistically competitive marketdiffers from a firm in a perfectly competitive market because thefirm in the monopolistically competitive market
A) has no barriers to entry.
B) faces a downward-sloping demand curve for its product.
C) faces a horizontal demand curve at the market clearingprice.
D) is characterized by market share maximization.

1. Productivity is defined as the quantity of

a. labor required to produce a nation's GDP.

b. goods and services produced per unit of time.

c. labor required to produce one unit of goods and services.

d. goods and services produced from each unit of labor input.

2. When market conditions in a competitive industry are such that firms cannot cover their total production costs, then

a. the firms will suffer short-run economic losses that will be exactly offset by long-run economic profits.

b. all firms will go out of business since consumers will not pay prices that enable firms to cover their total production costs.

c. some firms will exit the market, causing prices to rise until the remaining firms can cover their total production costs.

d. the firms will suffer long-run economic losses.

pinkhedgehog911