Unlike implicit costs, explicit costs

are actual cash payments

Explicit costs are

Opportunity cost usually

John moved his office from a building he was renting downtown to the carriage house he owns in back of his house. How will his costs change?

Suppose Ernie gives up his job as financial advisor for P.E.T.S., at which he earned $30,000 per year, to open up a store selling spot remover to Dalmatians. He invested $10,000 in the store, which had been in savings earning 5 percent interest. This year's revenues in the new business were $50,000, and explicit costs were $10,000. Calculate Ernie's economic profit

If the Money Store earns a normal profit this year, its

John moved his office from a building he was renting downtown to the carriage house he owns in back of his house. How will his profit change?

            Which of the following is true of marginal product?

What is the relationship between marginal cost and marginal product?

As output expands, the slope of the average total cost curve

For building contractors, doubling the size of an office building does not require double the inputs because there are common walls. This is an example of

A Midwestern wheat farmer faces a horizontal demand curve because

In the short run, if a firm shuts down, its total revenue is

For a perfectly competitive firm operating at the profit-maximizing output level in the short run,

To maximize profit, a perfectly competitive firm that decides not to shut down will choose the rate of output at which

All of the following are true of a perfectly competitive firm in long-run equilibrium except one. Which is the exception?

A constant-cost industry is one

Suppose that a long-run adjustment in a perfectly competitive industry results in decreased industry output but leaves price unchanged. Which of the following must be true?

The industry is a constant-cost industry

Assume that a perfectly competitive constant-cost industry is in long-run equilibrium when market demand suddenly decreases. Which of the following statements is incorrect?

Suppose a perfectly competitive increasing-cost industry is in long-run equilibrium when market demand suddenly decreases. What might happen to the typical firm in the long run?

To achieve allocative efficiency, firms

Allocative efficiency occurs in markets when

Natural monopolies form when

A monopolist has complete control over both price and quantity of output

For a monopolist

Suppose that a monopolist must choose between two points on its demand curve: it can sell 100 units for $3 each, or it can sell 150 units for $2 each. Which of the following is true?

The monopolist is facing unit elastic demand

A monopolist maximizes profit at the quantity where the slope of its total revenue curve equals the slope of its total cost curve.

Suppose that at an output of 1,000 units, a monopolist has marginal cost of $40, marginal revenue of $30, average variable cost of $30, and average total cost of $50. In order to maximize profit or minimize loss in the short run, the firm should

The main reason a monopolist can earn long-run economic profit, whereas a perfectly competitive firm cannot, is that

Unlike perfectly competitive firms, monopolists can

Firms can earn economic profits even in the long run if

In the short run, a monopolistically competitive firm is

The defining characteristic of oligopoly is that each firm

is mutually interdependent

Which of the following is inconsistent with the model of perfect competition?

Which of the following characteristics does perfect competition share with monopolistic competition?

Economies of scale yield

If a firm must produce a significant share of market output before low average costs can be achieved, the structure of this industry will tend to be

Which of the following is not an example of an oligopolistic barrier to entry?

Which of the following helps to make a cartel successful?

A formal agreement among the firms in an industry to coordinate their production and pricing decisions in order to earn monopoly profits is known as

A cartel is

The principal advantage of the game theory approach is that it allows us to

The payoff matrix refers to

The dominant-strategy solution implies that each firm

Which of the following is not a strategy employed by Zara?

Zara believes that making its own apparel rather than outsourcing production does all of the following except

As a real estate agent, Krista Otavi prides herself on her good training, availability to clients, and hard work to make a sale. Which one of the basic ways of product differentiation does Krista emphasize?