Microeconomics Final Study Guide
McGraw-Hill
The difference between the total revenue and total cost curves at a given output is
equal to - ✔️✔️total profits.
Which of the following types of markets does a single firm have the most market power?
- ✔️✔️monopoly
If a perfectly competitive firm wanted to maximize its total revenues, it would produce -
✔️✔️as much as its capable of producing.
Profit per unit is equal to - ✔️✔️P - ATC
The long run is - ✔️✔️a period long enough for all inputs to be variable.
Economic profit is the difference between - ✔️✔️total revenues and total economic
costs.
Explicit costs are - ✔️✔️the sum of actual monetary payments made for resources
used to produce a good.
A perfectly competitive firm should expand output when - ✔️✔️P > MC.
When the short-run marginal cost curve is upward-sloping, - ✔️✔️diminishing returns
occurs with greater output.
Fixed costs are - ✔️✔️constant in the short run.
Implicit cost are - ✔️✔️the costs to produce a good or service for which no direct
payment is made.
Normal profit implies that - ✔️✔️the factors employed are earning as much as they
could in the best alternative employment.
The market price for T-shirts sold in a perfectly competitive market is determined by -
✔️✔️supply and demand.
If price is greater than marginal cost, a perfectly competitive firm should increase output
because - ✔️✔️additional units of output will add to the firm's profits (or reduce losses).
, The fact that a perfectly competitive firm's total revenue curve is an upward-sloping
straight line implies that - ✔️✔️product price is constant at all levels of output.
Which of the following characterizes a competitive market? - ✔️✔️A downward-sloping
demand curve for the market.
The short run is the time period in which - ✔️✔️some costs are fixed.
Which is the best explanation for why individuals own small businesses? - ✔️✔️The
expectation of profit.
Competitive firms cannot individually affect market price because - ✔️✔️their individual
production is insignificant relative to the production of the industry.
Economists assume the principal motivation of producers is - ✔️✔️profit.
Market structure is determined by the - ✔️✔️number and relative size of the firms in an
industry.
If diminishing returns exist, then - ✔️✔️each unit produced will cost incrementally more.
The demand curve confronting a competitive firm is - ✔️✔️horizontal, while market
demand is downward-sloping.
A competitive firm is - ✔️✔️a price taker.
For the perfectly competitive firm, the marginal revenue is always - ✔️✔️constant.
A perfectly competitive firm will maximize profits by choosing an output level where -
✔️✔️price equals marginal cost.
A firm maximizes total profit when - ✔️✔️total revenue exceeds total cost by the
greatest amount.
Profit is - ✔️✔️the difference between variable costs and fixed costs.
The best measure of the economic cost of doing your homework is - ✔️✔️the most
valuable opportunity you give up when you do your homework.
For a competitive market in the long run, - ✔️✔️Economic profits induce firms to enter
until profits are normal.
The entry of firms into a market - ✔️✔️Reduces the profits of existing firms in the
market.
McGraw-Hill
The difference between the total revenue and total cost curves at a given output is
equal to - ✔️✔️total profits.
Which of the following types of markets does a single firm have the most market power?
- ✔️✔️monopoly
If a perfectly competitive firm wanted to maximize its total revenues, it would produce -
✔️✔️as much as its capable of producing.
Profit per unit is equal to - ✔️✔️P - ATC
The long run is - ✔️✔️a period long enough for all inputs to be variable.
Economic profit is the difference between - ✔️✔️total revenues and total economic
costs.
Explicit costs are - ✔️✔️the sum of actual monetary payments made for resources
used to produce a good.
A perfectly competitive firm should expand output when - ✔️✔️P > MC.
When the short-run marginal cost curve is upward-sloping, - ✔️✔️diminishing returns
occurs with greater output.
Fixed costs are - ✔️✔️constant in the short run.
Implicit cost are - ✔️✔️the costs to produce a good or service for which no direct
payment is made.
Normal profit implies that - ✔️✔️the factors employed are earning as much as they
could in the best alternative employment.
The market price for T-shirts sold in a perfectly competitive market is determined by -
✔️✔️supply and demand.
If price is greater than marginal cost, a perfectly competitive firm should increase output
because - ✔️✔️additional units of output will add to the firm's profits (or reduce losses).
, The fact that a perfectly competitive firm's total revenue curve is an upward-sloping
straight line implies that - ✔️✔️product price is constant at all levels of output.
Which of the following characterizes a competitive market? - ✔️✔️A downward-sloping
demand curve for the market.
The short run is the time period in which - ✔️✔️some costs are fixed.
Which is the best explanation for why individuals own small businesses? - ✔️✔️The
expectation of profit.
Competitive firms cannot individually affect market price because - ✔️✔️their individual
production is insignificant relative to the production of the industry.
Economists assume the principal motivation of producers is - ✔️✔️profit.
Market structure is determined by the - ✔️✔️number and relative size of the firms in an
industry.
If diminishing returns exist, then - ✔️✔️each unit produced will cost incrementally more.
The demand curve confronting a competitive firm is - ✔️✔️horizontal, while market
demand is downward-sloping.
A competitive firm is - ✔️✔️a price taker.
For the perfectly competitive firm, the marginal revenue is always - ✔️✔️constant.
A perfectly competitive firm will maximize profits by choosing an output level where -
✔️✔️price equals marginal cost.
A firm maximizes total profit when - ✔️✔️total revenue exceeds total cost by the
greatest amount.
Profit is - ✔️✔️the difference between variable costs and fixed costs.
The best measure of the economic cost of doing your homework is - ✔️✔️the most
valuable opportunity you give up when you do your homework.
For a competitive market in the long run, - ✔️✔️Economic profits induce firms to enter
until profits are normal.
The entry of firms into a market - ✔️✔️Reduces the profits of existing firms in the
market.
