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Econ Unit 4 Test Review Flashcards | StudBud
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Econ Unit 4 Test Review
Econ Unit 4 Test Review
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Questions
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Answers
1
Firms that have no influence on the price of the product they produce
Price Searcher
Price Taker
Economic Firm
Normal Firm
2
The left side of this graph demonstrates:
Economies of Scale
Loss
Economic Profit
Diseconomies of Scale
3
A firm that possesses pricing discretion
Product Differentiator
Price Searcher
Industry
Price Taker
4
How does an industry go from making an economic profit to a long-run equilibrium at a normal profit?
More sellers enter the market, lowering price
Buyers leave the market due to a lack of allocative efficiency
Sellers leave the market due to demand issues
Buyers enter the market, lowering prices
5
Producers use society’s scarce resources to provide consumers with the proper quantities of goods and services
Long-Run Stability
Hogwarts-Led Economics
Market Equilibrium
Allocative Efficiency
6
A price searcher CAN expect to set a high price and sell a high quantity due to pricing discretion
False
True
7
A group of producers that act together to control supply and price of a product
Trust
Cartel
Economic Gangster Squad
Monopoly
8
If price goes down to a point where variable costs cannot be recovered, then a firm will....
Operate at a loss
Cry
Shut Down
Go bankrupt
9
Mr. J Trivia: Which language did Mr. Johnson go to an immersion school for?
Chinese
Spanish
French
German
10
The amount by which the total revenue exceeds the total cost
Marginal Profit
Loss
Normal Profit
Economic Profit
11
Why will price searchers NOT produce at allocative efficiency?
They would then choose to be operating at a loss
It would automatically lead them to a normal profit
It does not provide them with the best opportunity for profit
They cannot influence price, thus cannot produce at Allocative Efficiency
12
If Marginal Social Benefit exceeds Marginal Social cost...
Output should be stopped
Output should be expanded
Demand will shift left
Supply will shift right
13
Increases in the average cost of production caused by larger plant size and scale of output
Long Run Cost Decrease
Economies of Scale
Diseconomies of Scale
Long Run Cost Increase
14
The benefit that the consumption of another unit of output conveys to society
Marginal Social Cost
Marginal Social Benefit
Allocative Efficiency
Opportunity Benefit
15
large number of well-informed independent buyers and sellers who exchange identical products.
Pure Competition
Firms
Industry
Market
16
The ability of a firm to influence the price of its product
Market Power
Product Differentiation
Price Power
Monopolistic Power
17
The excess of total cost over total revenue
Loss
Debt
Normal Profit
Deficit
18
If the Average Total Cost curve dips below the Demand line, the firm will have:
Normal Profit
Undetermined
Loss
Economic Profit
19
A firm will continue to operate at a loss if...
It can recover its variable costs
If their fixed costs outweigh their variable costs
none of these
Their product is still in demand
20
On a graph, marginal social cost is represented by...
Equilibrium Price
Demand Curve
Output
Supply Curve
21
Economists consider a profit to be a _________ when profit is equal to zero at its most profitable output
Loss
Economic Profit
Normal Profit
net neutral
22
Mr. J Trivia: How old was Mr. Johnson when he started working at ERA?
23
22
24
25
23
Mr. J Trivia: Which of the following is Mr. Johnson's favorite book series?
Harry Potter
Game of Thrones
Lord of the Rings
Hunger Games
24
On a graph, allocative efficiency is where...
Marginal Social Benefit = Output
Marginal Social Cost = Output
Marginal Social Cost = Marginal Social Benefit
None of these
25
Situation in which the size of an industry is stable: there is no incentive for additional firms to enter or leave
Equilibrium
Long-Run Equilibrium
Allocative Efficiency
Short-Run Equilibrium
26
The graph below demonstrates a firm that is...
Earning an Economic Profit
Earning a Normal Profit
Operating at a Loss
Winning the game
27
How do firms influence price?
Price Discrimination and Industry Control
Product Differentiation and Control of Supply
Monopolistic Competition
Control of Demand and Product Differentiation
28
Why would a firm choose to charge different consumers different prices for the same product?
They don't like consumers
They will seek the best price from each consumer to maximize profit
They will seek to cause confusion in the market to increase market power
They want to encourage consumers to buy products at specific location
29
A group of firms that produce identical or similar products
Cohort
Industry
Business
Pure Competition
30
Distinguishing a product from similar products offered by other sellers in the industry through ads, packaging, etc.
Market Power
Product Differentiation
Pricing Discretion
Economies of Scale
31
The graph below represents a situation in which the firm is...
Gaining and Economic Profit
Not enough info (wrong answer)
At a loss
Gaining a Normal Profit
32
If the Average Total Cost curve stays above the Demand line, the firm will have:
No
Economic Profit
Loss
Normal Profit
