1.Which of these would be true in the short run, but not the long run, for a fir
ID: 1222424 • Letter: 1
Question
1.Which of these would be true in the short run, but not the long run, for a firm that has two variables: labor and three machines.
A. Machines would be a fixed cost for unit of production
B. Labor would be a fixed cost
C. Machines would be variable cost
D. Both labor and machines would be variable costs
2. Which of these is an implicit cost?
A. the interest you could have gained on $100 that you instead spent on a watch
B. the $30 you spent on a ticket to a baseball game
C. the $5 you earned by completing a survey
D. the $10 you pay an employee for an hour of work
Labor
Total Production
Total Cost
Marginal Product
0
0
4
1
5
7
2
9
11
3. Fill out the Marginal Product column of the table above (hint: first one is blank)
4. What is the marginal cost for the third worker?
A. 4
B. 3
C. 11
D. 7
5. Which of these is closest to perfect monopoly?
A. Video Game console market
B. Farmer’s Market
C. The NFL
D. Diamonds
6. If the price in a perfectly competitive market is $4, and the average total cost for one firm is $6, then that firm is:
A. Making an economic loss and should exit the market
B. Making an economic profit and should exit the market
C. Making an economic profit and should remain in the market
D. Making an economic break even and should remain in the market
7. Which of these markets is most efficient?
A. Perfect competition
B. Monopolistic competition
C. Oligopoly
D. Monopoly
8. The difference between accounting profit and economic profit is that:
A. Accounting profit accounts for implicit and explicit costs
B. Accounting profit is better
C. Economic profit accounts for implicit and explicit costs
D. Economic profit accounts only for explicit costs
9. Microsoft is an example of a firm that gained in effect a monopoly through ----- in the 1990s and 2000s.
A. Public franchise
B. Copyright
C. Network externality
D. Control of natural resources
10. Do monopolies always make a profit?
A. Yes
B. No
11. The phenomena that allows monopolies to avoid pricing at the price where MR= MC, is:
A. Market power
B. The Smoot-Hawley Act
C. Greed
D. Public Franchise
12. Company A has 30% of the market. Company B has 25% of the market. Company C 10%, and Company D has 35%. If Company A tried to buy Company C, the result would most likely be: (Hint: checkout the Herfendahl-Hirchsman Index - HHI)
A. Unchallenged in a low concentration market
B. May be challenged in a medium concentration market
C. Will absolutely be challenged in a high concentration market
D. Might be challenged in a high concentration market
Labor
Total Production
Total Cost
Marginal Product
0
0
4
1
5
7
2
9
11
Explanation / Answer
1. C
2. A
3. 0, 3, 4
4. 4
5. THE NFL
6. A
7. B
8. C
9. C
10. YES
11. A
12. C
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