Whizkid Flashnotes Honor Society TopHat Simulation for Exam 3 Answer Key CH9 Q5 The dynamic process of competition is hindered by the self interest of business decision makers puts the profit motive of sellers to work for buyers conflicts with the interest of consumers when businesses pursue profit rather than the public interest will permit business decision makers to earn long run economic profit unless they are regulated by government CH9 Q4 If an amusement park that is highly profitable during the summer months is unable to cover its variable costs during the winter months which of the following would be the best alternative raise its prices during the winter months lower its prices during the summer months coperate during the summer but shut down during the winter months operate during all months of the year as long as its profits during the summer exceed its losses during the winter CH9 Q3 When the marginal cost of a firm is greater than the market price of its product the firm should expand output reduce output maintain output 20 000 10 000 10 000 20 000 charge more than the market price CH9 Q2 Fixed costs 20 000 Variable costs 30 000 Total revenue 40 000 If the firm stays open how much is profit CH9 Q1 Fixed costs 20 000 Variable costs 30 000 Total revenue 40 000 If the firm closes how much is profit 20 000 10 000 0 20 000 CH10 16 MA Which of the following are necessary conditions for effective price discrimination aThe firm must face a downward sloping demand curve bThere must be at least two distinguishable groups of consumers cThe producer must be a pure monopolist dThe seller must be able to prohibit buyers from easily reselling the product to other potential buyers Select all of the above that apply CH10 15 If a movie theater is going to gain by charging students a dollar less than other customers athe demand of students must be more elastic than that of other customers bthe demand of students must be less elastic than that of other customers cstudents must have higher incomes than other customers dother customers must enjoy movies more than students CH10 14 What is the price of the Manslater a7 easy payments of 99 99 b5 easy payments of 29 99 c2 easy payments of 9 99 d 59 99 e 19 99 CH10 13 Some economists argue that competitive price searcher markets are inefficient because athe firms earn economic profits in the long run bthe firms marginal costs and marginal revenues are not always equal cfirms do not produce the output rate that would minimize their average total costs CH10 12 MA Compared to the outcome when the firms are price takers competitive price searcher markets will result in dbarriers to entry are high aa wider variety of products CH10 11 11 Economic analysis suggest that in a competitive market economy when an entrepreneur has made a large profit aconsumer benefits must have been reduced by at least the amount of the profit bother producers have lost profits of the same size ceconomic progress for society as a whole has normally been enhanced dluck or chance rather than productive activity has nearly always been the largest factor CH10 10 Which company did Steve Wozniak work part time for that had first chance at anything he invented bless product variety clower prices dhigher prices aIBM bXerox cDigital Equipment Corp dThe federal government eHewlett Packard CH10 9 In order to be successful in a competitive market economy an entrepreneur must aprovide buyers at least as much satisfaction per dollar spent as the buyer could get elsewhere bsupply consumers with goods and services valued less highly than the resources necessary to produce them ctake resources from other producers thus reallocating wealth but not creating new wealth dgain government grants and subsidies CH10 8 Which of the following people said that aHenry Ford bSteve Jobs cPresident Obama dDebbi Fields eOprah Winfrey fDonald Trump gJohn Rockefeller CH10 7 Which of the following people said that aHenry Ford bSteve Jobs cPresident Obama dDebbi Fields eOprah Winfrey fDonald Trump gJohn Rockefeller aincrease output in order to reduce per unit costs bdecrease the price of its product and expand output cincrease price and reduce its rate of output dreduce both price and output aincrease output in order to reduce per unit costs bdecrease the price of its product and expand output cincrease price and reduce its rate of output dreduce both price and output CH10 6 If a price searcher is producing at a level of output such that its marginal cost is 5 and its marginal revenue is 3 the firm should CH10 5 If a price searcher is producing at a level of output such that its marginal cost is 5 and its marginal revenue is 3 the firm should CH10 4 When a competitive price searcher market is in long run equilibrium the firms will aearn economic profit boperate at an output level that minimizes long run average total cost ccharge a price that is equal to average total cost doperate at an output level where price is equal to marginal cost CH10 3 The fact that barriers to entry are low in competitive price searcher markets means that if current firms are making economic losses athese losses will remain in the long run because no firms can exit the market bcurrent firms will exit the market causing the demand curves that face the remaining firms to increase cnew firms will enter the market causing the demand curves that face the existing firms to decrease dnew firms will enter the market causing no change in the demand curves that face the existing firms in the market CH10 2 If firms in a competitive price searcher market are currently experiencing economic profits then over time anew firms will enter the market and the current firms will experience a decrease in demand for their bnew firms will enter the market and the current firms will experience an increase in demand for products their products csome existing firms will exit the market and the remaining firms will experience an increase in demand for their products dsome existing firms will exit the market and the remaining firms will experience a decrease in demand for their products CH10 1 What was the sales difference for the bookstore from the previous year Answer Key CH9 CH10 a 200 more b 200 less c 1 200 more d 1 200 less e 2 000 more f 2 000 less B C B C D A B D A A C A D C E A A D C C C B A D
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