ECON 331 - Implicit costs, are always fixed

QUESTION 1

1. Implicit costs
2. A.are always fixed.
3. B.measure the forgone opportunities of the owners of the business.
4. C.always exceed explicit costs.
5. D.are irrelevant to business decisions.

1 points

QUESTION 2

1. Pat used to work as an aerobics instructor at the local gym earning $35,000 a year. Pat quit that job and started working as a personal trainer. Pat makes $50,000 in total annual revenue. Pat's only out-of-pocket costs are $12,000 per year for rent and utilities, $1,000 per year for advertising and $3,000 per year for equipment.Refer to the information given above. Pat's accounting profit is _______, and Pat's economic profit is _______.
2. A.$50,000; $15,000
3. B.$34,000; -$1,000
4. C.$34,000; $15,000
5. D.-$1,000; -$1,000

1 points

QUESTION 3

1. The following graphs depict a perfectly competitive firm and its market.
2. Assume that all firms in this industry have identical cost functions.
3. Assume that the market is currently as shown in the graph on the left (i.e., price of $8). What is true of the number of firms?
4. 
   
5. 
   
6. A.There are currently 30 firms in the industry, and that number will remain stable until there is a change in demand or in technology.
7. B.There are currently ten firms in this industry, and that number will remain stable until there is a change in demand or in technology.
8. C.It is impossible to tell how many firms currently exist in this industry, but you can tell that the number of firms is likely to increase in the near future.
9. D.There are currently ten firms in this industry, and that number is likely to increase in the near future.

1 points

QUESTION 4

1. Economic rent is:
2. A.the amount you pay for an apartment in a free market.
3. B.the payment made to suppliers of an input.
4. C.the difference between the payment made to the supplier of an input and the supplier's reservation price.
5. D.the same as the input supplier's reservation price.

1 points

QUESTION 5

1. The Smart for One, Dumb for All principle indicates that:
2. A.pursuing selfish interests always promotes social welfare.
3. B.if everyone is doing it, you should not.
4. C.pursuing selfish interests always lessens social welfare.
5. D.pursuing selfish interests sometimes conflicts with social welfare.

1 points

QUESTION 6

1. An imperfectly competitive firm is one:
2. A.that attempts but fails to compete perfectly.
3. B.with the ability to set price at any level it wishes.
4. C.that possesses some degree of control over its price.
5. D.that faces perfectly inelastic demand.

1 points

QUESTION 7

1. Products have network economies if they:
2. A.can be used by more than one person at a time.
3. B.are cheaper to produce as more people buy them.
4. C.are more valuable to own as more people own them.
5. D.have many complements.

1 points

QUESTION 8

1. In exchange for a share in the revenues earned on campus, State U has granted CheapFizz the exclusive right to sell soft drinks in the student union and in vending machines on campus. Prior to the deal, three soft drink companies sold beverages on campus; now no other soft drink company is allowed to sell its products on campus or at university events.
2. 
   
3. Refer to the information above. The beneficiaries of this deal are _______.
4. A.the students.
5. B.State U
6. C.State U and CheapFizz
7. D.CheapFizz

1 points

QUESTION 9

1. Imagine that you are an entrepreneur, making designer t-shirts in your garage. Your accountant has estimated that your firm's total costs can be expressed by the function TC = 300 + 10 × Q, where Q represents the number of t-shirts you make.
2. 
   
3. Refer to the information given above. If you make 100 t-shirts, your average total cost is _______.
4. A.$3
5. B.$10
6. C.$3.10
7. D.$13

1 points

QUESTION 10

1. For perfectly competitive firms price _____ marginal revenue; for monopolists price ____ marginal revenue.
2. A.equals; equals
3. B.equals; is less than
4. C.is less than; equals
5. D.equals; is greater than

1 points

QUESTION 11

1. The demand curve for a perfectly competitive firm is __________ while the demand curve for a monopolist is __________.
2. A.perfectly elastic; downward-sloping
3. B.vertical; downward-sloping
4. C.perfectly elastic; perfectly inelastic
5. D.perfectly inelastic; perfectly elastic

1 points

QUESTION 12

1. Refer to the figure below. If this firm were to sell 20 units of output, its total revenue would be:
2. 
   
3. A.$50
4. B.$100
5. C.$140
6. D.$1,000

1 points

QUESTION 13

1. If the demand curve facing the monopolist is Price = 70 - 14 × Q, then the slope of its marginal revenue curve is:
2. A.-28
3. B.-14
4. C.-7
5. D.-1

1 points

QUESTION 14

1. Refer to the figure below. The profit-maximizing level of output for the monopolist is:
2. 
   
3. A.H
4. B.H - A
5. C.A
6. D.G

1 points

QUESTION 15

1. Perfect price discrimination occurs when:
2. A.each buyer pays his or her marginal cost.
3. B.most buyers pay their reservation price.
4. C.each buyer pays exactly his or her reservation price.
5. D.the buyer with the highest reservation price sets the market price.

1 points

QUESTION 16

1. Airlines that charge higher prices for customers who purchase their tickets at the last minute are:
2. A.not price discriminating because the product is not the same.
3. B.price discriminating by identifying passengers with higher reservation prices.
4. C.perfect price discrimination.
5. D.using the hurdle method of price discrimination.

1 points

QUESTION 17

1. A dominant strategy occurs when:
2. A.one player has a strategy that yields the highest payoff regardless of the other player's choice.
3. B.both players have a strategy that yields the highest payoff independent of the other's choice.
4. C.both players make the same choice.
5. D.the payoff is the maximum possible combination of payoffs in the game.

1 points

QUESTION 18

1. Refer to the table below. In the matrix below:
2. 
   
3. A.Jess has a dominant strategy, but Cory does not.
4. B.Cory has a dominant strategy, but Jess does not.
5. C.both Cory and Jess have the same dominant strategy.
6. D.neither Cory nor Jess has a dominant strategy.

1 points

QUESTION 19

1. The prisoner's dilemma refers to games in which:
2. A.neither player has a dominant strategy.
3. B.one player has a dominant strategy and the other does not.
4. C.both players have a dominant strategy which results in a lower payoff than they would earn if they play their dominated strategies.
5. D.both players have a dominant strategy which results in the largest possible payoff.

1 points

QUESTION 20

1. An agreement among firms to restrict production with the goal of earning economic profits is a:
2. A.Pure monopoly
3. B.Oligopoly
4. C.Cartel
5. D.Duopoly

1 points

QUESTION 21

1. The tit-for-tat strategy only works for prisoner's dilemma games that:
2. A.have only one Nash equilibrium.
3. B.are played only one time.
4. C.have no Nash equilibrium.
5. D.are repeated.

1 points

QUESTION 22

1. A decision tree is used when modeling:
2. A.any type of game.
3. B.simultaneous decisions.
4. C.a prisoner's dilemma.
5. D.games in which timing matters.

1 points

QUESTION 23

1. In the below decision tree, Tracy picks first, and Amy picks second. Tracy knows Amy's payoffs to each choice, and Amy knows Tracy's payoffs.
2. 
   
3. Refer to the figure below. If the payoffs at the end of each branch are as shown, the outcome of this game will be:
4. 
   
5. A.Tracy and Amy both get 125.
6. B.Tracy gets 75 and Amy gets 150.
7. C.Tracy gets 300 and Amy gets 200.
8. D.Tracy gets 25 and Amy gets 225.

1 points

QUESTION 24

1. In the below decision tree, Tracy picks first, and Amy picks second. Tracy knows Amy's payoffs to each choice, and Amy knows Tracy's payoffs.
2. 
   
3. Refer to the figure below. If before Tracy chose, Amy could make a credible commitment to choose either the top or bottom branch when her turn came, Tracy would get a payoff of _______ and Amy would get a payoff of ______.
4. 
   
5. A.25; 225
6. B.300; 200
7. C.75; 150
8. D.125; 125

1 points

QUESTION 25

1. Emotions like guilt and sympathy:
2. A.are irrelevant to economic decision-making.
3. B.reduce the likelihood that a transaction will maximize total economic surplus.
4. C.can solve commitment problems, increasing players' payoffs.
5. D.can solve commitment problems, but generally reduce players' payoffs.