Unit 2 Flashcards
(50 cards)
An entrepreneur knits sweaters for sale. The entrepreneur has a fixed cost of $100. When he makes 10 sweaters in one month, he must spend $15 on wool. To make eleven sweaters on one month, he must spend $17 on wool. If he has no other costs, what is the marginal cost of the eleventh sweater?
$2
Which of these is not likely to lead directly to a black market?
Rationing
What happens to a monopolistically competitive firm that begins to change an excessive price for its product?
Consumers will substitute a rivals product
Why do companies are practice price discrimination?
Price discrimination recognizes that groups of consumers are willing and able to pay different amounts and maximizes profits by charging each group a different price
What kind of table lists the quantity of a good that a person will buy at different prices?
Demand schedule
Which of the following is an example of lower production costs brought about by he use of technology?
The use of email to replace slower surface mail
According to figure 5.4 what term describes elasticity of supply in this market as the price increases from $1.00 to $2.00 a slice?
Inelastic
A new office building has opened and the demand for pizza has increased. The new demand curve states that consumers will buy 200 slices at $2.50 each and 300 slices at $1.50 each. Based on figure 6.2, if the slope of the curve has not changed, what is the new equilibrium price and quantity supplied?
$2.00 for 250 slices
Sunshine island has 3 large supermarkets hat supply most of the groceries. How would you describe the market for groceries on seaside island?
Oligopoly
What determines the price and the quantity produced of most goods?
The interaction of supply and demand
According to figure 4.4, how many slices of pizza will Ashley buy if the price is $1.00 per slice?
Two
Complete the following sentence: at the most profitable level of production, a firm’s margins cost will be ____ the market place.
Equal to
According to figure 6.3, in the market, a price of $1.00 would be…
Price ceiling
Which of the following industries have been deregulated in recent years?
Airlines
When prices rise, which of the following happens to income?
It buys less
Which of the following is a fixed cost for a store
Rent
In response to rising traffic, demands for bicycles has increased the new equilibrium point will show
More bicycles sold, but at a higher price
What is monopolistic competition?
Many companies selling similar but not identical products
How much control over price do companies in a perfect competitive market have
None
What determines how a change in prices will affect total revenue for a company
Elasticity of demand
Based on Ashley’s demand curve in figure 4.4 which of the following statement is true
Ashley will buy 2 fewer slice of pizza
Which of the following is an example of government influences on supply
Subsides
According to figure 6.2 in this market, a price of $1.50 would be
The equilibrium price
What is the definition of an oligopoly
Two to four firms producing about 70% to 80% of the output
