Exam 6: Sellers and Incentives

The following figure depicts the supply curve of a certain firm. -Refer to the figure above.If A = 2,and the price elasticity of supply when price changes from 5 to B is 1/3,what is the producer surplus at the price B?

The following graph represents the total production of a firm on the y-axis, and the number of employees on the x-axis. -Refer to the figure above.Diminishing marginal returns begin to occur when ________.

The following figure depicts the supply curve of a certain firm. -Refer to the figure above.If B = 10,and the producer surplus is equal to $50,find A.

Why is the profitability of firms under perfect competition different when they have nonidentical cost structures in comparison to identical cost structures?

A firm produces 200 units of a good when it employs seven workers.The marginal product of an eighth worker is 46 units.If the eighth worker is hired,the firm's total product will increase to ________.

The following figure shows the supply curve of a firm that manufactures shoes. -Refer to the figure above.What is the producer surplus when the price is $50?

A firm will maximize profit at the level of output where ________.

In a competitive industry where different firms have different cost structures,the industry supply curve is ________.

The following figure depicts a firm's long-run average total cost and selected short-run average total cost curves. -Refer to the figure above.The firm is currently producing at C.In the short run,the firm should ________.

The following figure depicts the marginal cost curve, the average total curve, and the average variable cost curve of a certain firm. -Refer to the figure above.What is the price on the market when the firm makes a profit of $4,50?

At the profit-maximizing level of output,producer surplus is ________ and the firm's profits are ________.

In a perfectly competitive market,the long-run market price is ________.

Scenario: For the better part of a decade, Della Tarpinian has been locked in a Kafkaesque battle with a trade association she doesn't belong to, the Kentucky Bar Association. She's been fined $5,000 and ordered to pay the costs of her investigation, for violating rules that the average non-lawyer might find maddeningly vague and hard to understand, such as: "A person is guilty of unlawful practice of law when, without a license issued by the Supreme Court, he engages in the practice of law." That one tripped up Tarpinian, 53, who runs a small document-preparation firm in Owensboro, Kentucky, specializing in uncontested divorces, wills, and other simple legal matters. After a lengthy investigation, the Kentucky Bar determined that Tarpinian's clients couldn't possibly have figured out how to fill out the paperwork they filed in court without her coaching them behind the scenes. What surprised Tarpinian-and many other document preparers around the country-is that the Bar could drag her before the state Supreme Court and have her fined for, as she sees it, competing against its members. Especially since a jury acquitted Tarpinian of similar charges in a 2004 criminal trial, after less than half an hour of deliberations. (Source: "Non-Lawyers Find It Hard Avoid Breaking Bar's Vague Rules," Forbes, July 25, 2011.) -Refer to the scenario above.Which condition of a perfectly competitive market could most directly be hampered in the market for legal advice?

The following table shows the total output, number of workers employed, variable costs, and fixed costs of a firm. -Refer to the table above.What is the average fixed cost of producing 110 units of the good?

Which production function in the figure below exhibits diminishing returns with respect to labor input?

The figure below shows the marginal cost (circles) and the average variable cost (crosses) of a firm in a competitive market. The firm always makes the choice to maximize its profit. -Refer to the figure above.If the market price of the product fell from $5,000 to $3,400,what is the loss of the firm's producer surplus?

A firm with a fixed cost of $300 per month and variable cost of $200 per month decides to shut down.In such a situation,it would lose ________.

The long-run average cost curve connects the lower part of the short-run cost curves because ________.

A firm earns a total revenue of $600 from selling its product at a price of $200 per unit.If the per-unit cost of producing the good is $150,the firm sells ________ unit of the good.

Which one of the following characteristics of a market would you expect to be inconsistent with price-taking behavior?