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WorksheetsAP Microeconomics Final Review
Total questions: 57
Worksheet time: 29mins
To maximize profit, where would a monopolist set quantity?
50 Units
100 Units
150 Units
200 Units
How do you determine the DWL on a curve?
L x W x H
Pi
B x H
Where MR=MC
In which market structure does DWL occur?
Monopoly
Perfect Competition
Communism
None of the above
Which of the following terms best applies to oligopoly?
Production Possibilities Frontier
Price takers
Game Theory
Many Sellers
The Hamburger Union goes on strike. What happens to the price of Hot dogs, a substitute good?
The price stays the same
The price rises
The price lowers
Not enough information.
If the quantity demanded is lower that the social optimum what should the government do to raise the equilibrium to that optimum?
Nothing
tax the buyers
subsidize the sellers
subsidize the buyers
In 2019, the average household income increases by 5%. What happens to the demand curve or Squatty Potties?
Demand moves along the demand curve.
Demand shifts inward.
Nothing
Demand shifts outwards.
You are the manufacturer of the cure-a-sol, a drug that can cure diabetes (inelastic demand). You're feeling particularly evil one day and you want to increase profits. What do you do?
Decrease price.
Decrease the quantity supplied.
Increase the quantity supplied
Increase price.
What price represents the optimum price and number of concerts that should be organized?
P1
P2
P3
0, because all concerts are super lame now that musicians all sell out and I miss being the target demographic that they market towards.
At what price should Holy Smokes sell its brisket?
P1
P2
P0
Q1
Define: The difference between total revenue and total explicit and implicit costs.
Total costs
Total Fixed Costs
Economic Profit
Accounting Profit
What is the effective price that buyers will pay per unit?
$60
$18
$8
$14
What is the tax per unit?
$10
$18
$12
$8
G. Zachary Wilickers earns $35,000 per year and pays a 15% income tax while Hugh Mann earns $50,000 per year and pays a 17% income tax. This is an example of...
A Regressive Tax
A Progressive Tax
A Proportional Tax
A Flat Tax
Define: The marginal utility from consuming one additional item will fall.
Law of diminishing marginal utility.
Theory of diminishing marginal utility.
Law of increasing marginal utility.
The Once you pop you just can't stop Pringles Theorem.
Octan is the leading producer of the Kragle. What will cause President Business to offer more world ending Kragle?
A competitor, Turbo Oil, lowers the price of their Kragle.
The price of a key ingredient increases.
The price of a key ingredient decreases.
The demand for the Kragle increases.
Producer surplus is measured by
the area to the right of the supply curve but below the price equilibrium.
the sum of buyer and seller surplus
the area above the supply curve but below the equilibrium price.
the right of the demand curve and above the price.
Mr. Vergo finally realizes his dream of opening Holy Smokes. What will increase his demand for labor?
The price of charcoal increases?
Swine flu hits the US.
There is a baby boom among pigs and price of pork decreases.
The government taxes spare ribs.
Which of the following will cause the Production Possibilities Curve to shift outwards?
Workers become better trained
Forrest fires destroy 100,000 acres of land
War destroys factories
Skilled workers leave the country.
Label Average Fixed Cost
A
B
C
D
Label Average Total Cost
A
B
C
D
What will happen is the price of ukuleles decrease
The demand for ukuleles will increase
The supply of ukuleles will decrease.
the quantity of ukuleles demanded will increase.
None of the above.
Define: the idea that society's wants and needs are unlimited, and material resources are limited.
Capitalism
Welfare
Redistribution
Scarcity
What quantity supplied is greater that quantity demanded, there is a
negative externality.
shortage in the market.
surplus in the market.
decrease in unemployment.
Which of the following is a public good?
Police Officers
A roll of toilet paper
Sidewalks
Private Schools
The a 10% price increase on roller skates and there is a 40% decrease in quantity demanded, then roller skates are
perfectly elastic
elastic
inelastic
perfectly elastic
Saad Mann's annual salary has increased, but his demand for Harriet Patter books have decreased. Harriet Patter books are...
a normal good.
an inferior good.
a necessity.
a great read and Saad's decrease in demand for them isn't necessarily because he can afford a more popular and similarly titled series of books, but just his decrease in available time due to a busier workload,
To calculate marginal revenue product,
multiply the marginal product by the marginal cost.
multiply the marginal product by the product price.
divide the marginal product by the marginal cost.
None of the answers are correct.
What is the main difference between firms in the long run and firms in the short run?
Short run firms cannot change the size of the plant.
Long run firms cannot change the size of the plant.
Short run is enough time to change the amount of capital.
Short run firms can change the size of the plant.
If United Airlines decides to not cut fares, then what should American Airlines do?
Don't cut fares and earn $600 mil.
Cut fares and earn $800 mil.
Cut fares and earn $400 mil.
Don't cut fares and earn $200 mil.
Where should Farmer Joanne set the price of her zucchini to maximize profit?
AC=P
MC=AC
AC=DC
MR=MC
What type of market firm is this?
Monopolistic Competition
Perfect competition
Monopoly
Oligopoly
If prices fall below the Average Total Cost, what should Holy Smokes do?
Shut down
Lay off workers
Lower Fixed costs
Mr. Vergo should ask his dad for a loan.
Chris P. Bacon has studied for Mr. Vergo's AP Micro exam for 2 hours. In order for Chris to choose to spend an additional hour studying, what must be true?
The marginal benefit of 1 additional hour is less than the cost of that hour.
The marginal benefit of 1 additional hour is more than the cost of that hour.
Both the marginal benefit and marginal cost are always equal.
idk lol!
Unlike in a monopoly, in Monopolistic and perfect competition profits in the long run will always equal.
0
42
Marginal Revenue
Marginal Cost
Which market firms have little to no barriers to entry?
Monopolistic competition.
Monopoly
Oligopolies
Perfect Competition
When Holy Smokes becomes a phenomenon it will turn a profit in the short term, however why will it not make a profit in the long run.
More firms enter the market
Firms will leave the market
BBQ is a fad.
Mr. Vergo can't handle running a business.
What will happen to the supply of corn if the US Government established a price floor for it.
reduce the surplus
cause a surplus
decrease supply
Shift the demand curve outwards
Define: a market structure with a small number of interdependent large firms producing a standardized product.
Oligopoly
Perfect Competition
Monopolistic Competition
Monopoly
What would happen in the market for hybrid cars if the price of gas rises and new technology reduces production cost?
Equilibrium price rises and equilibrium quantity rises
The effect on equilibrium price and quantity is ambiguous.
Equilibrium price falls and equilibrium quantity rises.
The effect on equilibrium price is ambiguous and equilibrium rises.
When a Monopolistic Firm begins to specialize in one product and the costs of inputs lower this will result in
diseconomies of scale.
economies of scale.
a decrease in implicit cost.
constant returns to scale.
What market firms will have a deadweight loss?
Monopolies
Oligopolies
Perfect Competition
Monopolistic Competition
A Canadian worker can grow either 40 bushels of corn or 10 bushels of barley per year, and a Thai worker can grow either 20 bushels of corn or 5 bushels of barley per year. Which of the following statements is true?
Neither country has a competitive advantage.
Thailand has an absolute advantage.
Canada has comparative advantage in barley.
Thailand has an absolute advantage in corn.
What is not a condition for a monopoly to form
The patent for a product runs out.
The firm controls a vital resource
The firm has an exclusive right to sell the product in a geographic location.
The firm holds an exclusive patent on a good.
If a price increase for Product A results in an increase in demand for Product B, then Product B is probably...
corn.
a substitute good.
a normal good.
a complementary good.
In what type of economy are market prices determined by a central authority?
Command Economy
Capitalism
Mixed Economy
Traditional Economy
Compared to Perfect Competition, Monopoly's output is
Less
More
The same
There isn't enough information to make a decision.
Compared to Perfect Competition, Monopoly's prices are
Less
More
The same
There isn't enough information to make a decision.
What is the main difference between Monopoly and Monopolistic Competition?
The number of sellers
entry and exit
the size of the market
government regulation
Which of the follow will NOT shift demand?
Price
Income
Tastes
Number of buyers
Which of the following will shift Supply inwards?
Input costs increase.
number of sellers decrease.
Sellers expected the price of the good to rise in the future.
The government increased tax on the good.
Suppose both Kenya and Pakistan produce lawn darts and Pogs. Kenya can produce lawn darts at a lower opportunity cost than Pakistan. Pakistan can produce Pogs at a lower opportunity cost than Kenya. According to the law of comparative advantage, if they wanted to produce only on good and establish a trade for the good they are no longer producing,
Pakistan should stop producing lawn darts.
Pakistan should stop producing Pogs.
Both countries should decrease production of both goods.
Kenya should stop producing lawn darts.
How can a firm in a perfectly competitive market change price?
It can't
Increase output.
Decrease output.
Decrease labor.
Which market firm dedicates the most resources to advertising?
Perfect Competition
Monopoly
Monopolistic Competition
Oligopoly
The Water company is best described as...
a monopoly.
a natural monopoly.
an oligopoly.
a perfectly competitive firm.
What is the opportunity cost of going from point A to point D?
30 toothbrushes
15 toasters
20 toasters
There is no opportunity cost.
What is the marginal utility of eating a fourth slice of bread?
40
10
5
140
