econ final elzenga section 6 Flashcards
. Which of the following is true of marginal revenue for a monopolist that charges a single price?
P > MR, because the monopolist must decrease price on all units sold in order to sell an additional unit.
Suppose a single firm supplies all the ceramic windlasses in the U.S. The demand curve that firm faces is
elastic at the profit-maximizing quantity.
What is the effect of imposing a $10,000 lump-sum tax on a monopolist?
Assume the firm continues to operate after the tax
The firm experiences no change in the profit-maximizing price and quantity, but its profit decreases.
Suppose that the demand for Meredith’s new book, Spatulas from Around the World, is such that the demand curve lies everywhere below the average variable cost of producing it. To maximize profits or minimize losses, Meredith should
shut down the presses printing her book.
A monopolist’s short-run supply curve is
nonexistent
Which of the following is true of perfect price discrimination about consumer surplus
Consumer surplus is zero.
If zinc suppliers are successful in bringing together an international zinc cartel, they will experience
lower output, higher prices, and the need to organize an effort to prevent the entry of new firms into the industry.
Because the demand for labor is based on the demand for products, the demand for labor is called
a derived demand.
A frost hits Brazil trees damaging many of the nation’s coffee trees. Buyers begin purchasing the available supply of coffee beans at current market prices expecting to sell them later at high prices. In economics (and business) these buyers are
arbitrageurs.
When all of the returns to a resource are in the form of economic rent,
. the supply curve for that resource must be vertical
Work is an attractive use of your time
if the utility of consumption made possible by work exceeds the disutility of work itself
If, for you, leisure is a normal good, an increase in income
increases your demand for leisure time and reduces your allocation of time to market work
If Dr. Stone’s desire to consume more leisure because she is richer never outweighs her desire to work more as her wage increases, then her supply of labor curve
will have a positive slope throughout.
The equilibrium wage for workers in fast-food chains was $3 per hour. Then the birth rate declined and there were fewer teenagers, the primary source of labor for this industry.
. The supply of labor curve shifted to the left, so the equilibrium wage will increase.
College students often intern in jobs that pay little or no income because
they are investing in valuable human capital
