To maximize utility, buy when:

marginal utility = marginal cost

A product market receives___

the firm's supply and the household's demand

When a tax is placed on a market where demand is relatively elastic,

less of the tax burden falls on consumers

Which is NOT true about economies of scale?

double the resources produces less than double the output

What is the economic problem?

there are unlimited wants but limited resources

If demand is inelastic, then...

there is a necessity of the item

Above equilibrium, Benefits the sellers

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Eryn Lin Period 4) AP Microeconomics Midterm Review

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Midterm review for AP Microeconomics by Eryn Lin s16

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Questions 20

Answers

1
Firms should produce:
until MR > MC
until MR = MC
at a demand below the average variable cost
At any price
2
In the long run,
plant capacity can't change
all resources are variable
markets will make a profit
there is at least one fixed variable
3
To maximize utility, buy when:
marginal utility reaches a maximum
marginal utility is zero
marginal cost = 0
marginal utility = marginal cost
4
When the price of substitute A increases, demand for B___
Remains the same
Decreases
Increases
Increases then decreases
5
Which is NOT a characteristic of perfect competition?
Many producers and sellers
Producers set price
No barriers for entry or exit
Firms are price takers
6
The cross-price elasticity of demand for a substitute is____
Negative
0
Infinite
Positive
7
to maximize utility when buying two products, buy when
MUx/Px = MUy/Py
marginal utility = 0
you run out of money
marginal benefit = marginal cost
8
A product market receives___
The firms demand and the household's supply
the firm's supply and the market's demand
the household's supply and the firm's demand
the firm's supply and the household's demand
9
Which is NOT one of the 4 market structures introduced so far?
monopolistic competition
perfect competition
simple oligopoly
pure monopoly
10
When a tax is placed on a market where demand is relatively elastic,
most of the tax burden falls on consumers
all of the tax burden falls on producers
less of the tax burden falls on consumers
all of the tax burden falls on consumers
11
Which does NOT create deadweight loss?
a price ceiling
a price floor
a tax
selling at equilibrium
12
Which explains why the demand curve has a negative slope?
Income effect
Diminishing marginal returns
Opportunity costs
Marginal revenues
13
Which is NOT true about economies of scale?
the graph is downward-sloping
ATC for each unit will be lower
possible because of better mass production techniques
double the resources produces less than double the output
14
What is the economic problem?
equilibrium
individual choice
opportunity costs
there are unlimited wants but limited resources
15
If demand is inelastic, then...
there is a necessity of the item
the price elasticity = infinity
there are many subsitutes
income is low
16
A price floor is___
Above equilibrium
Benefits the buyers
Benefits the sellers
Below equilibrium
17
Which of the following is NOT a determinant of supply?
Regulations
Number of producers
Technology
Income
18
economic profit =
implicit costs
total revenue - accounting costs
total revenue - economic costs
explicit costs
19
A bowed out curve on the production possibilities curve indicates:
increasing opportunity cost
inefficiency
efficiency
Perfectly adaptable resources
20
What is NOT one of the reasons of the 3 stages of return?
specialization
variable resources
fixed resources
workers get into each others way

Eryn Lin Period 4) AP Microeconomics Midterm Review Flashcards | StudBud