AP Micro Final Review

In order to maximize profit a monopolist produces what quantity?

• Where Marginal Revenue hits zero

• At ATC's lowest point

• Where Marginal Cost is equal to Marginal Revenue

• Where the monopolist hits constant returns to scale

What type of market DOES NOT have deadweight loss?

• Oligopoly

• Monopoly

• Perfect Competition

• Monopolistic Competition

Oligopoly is connected to which concept?

• Constant returns to scale

• Game Theory

• Tragedy of the Commons

• The Laffer Curve

What happens to price and quantity in the market for hot dogs if the price of buns (a complement) rises?

• P increase, Q increase

• P decrease, Q increase

• P increase, Q decrease

• P decrease, Q decrease

What can the government do in this situation to move D1 to D2?

• Tax buyers

• Tax sellers

• Provide subsidy to buyers

• Provide subsidy to sellers

Demand for running shoes is elastic, if a producer wants to increase total revenue they should...

• decrease price

• increase price

• increase global tariffs

• supply less to the market

Which will always be a greater number?

• Economic profit

• Accounting profit

What is the per unit tax in the graph?

• 10

• 14

• 6

• 4

What is the DWL created by the tax?

• 150

• 100

• 200

• 250

Jeff earns $50,000 a year and pays 25% tax and Beth earns $100,000 and pays 12.5% tax, this is an example of what type of tax?

• Progressive

• Regressive

• Proportional

• Lump Sum