5 Written Questions

1. A firm's opportunity cost of using its own resources or those provided by the owners without a corresponding cash payment
2. An agreement among firms to increase economic profit by dividing the market and fixing the price
3. Opportunity Cost of resources employed by a firm that takes the form of cash payments
4. Lowest Rate of output at which a firm takes full advantage of economies of scale
5. The change in total product that occurs when the use of a particular resource increases by one unit, all other resources constant

5 Matching Questions

1. Oligopoly
2. Total Cost
3. Rent Seeking
4. Price Maker
5. Normal profit

1. a The accounting profit earned when all resources earn their opportunity cost
2. b Activities undertaken by the individuals or firms to influence public policy in a way that increases their incomes
3. c the sum of fixed cost and variable cost (FC + VC)
4. d A firm with the power to set the price
   GRAPH: demand curve for its output slopes downward
5. e A market structure characterized by so few firms that each behaves interdependently

5 Multiple Choice Questions

1. An oligopoly that sells a commodity, or a product that does not differ across suppliers.
   1. Deadweight loss of Monopoly
   2. Oligopoly
   3. Differentiated Oligopoly
   4. Undifferentiated Oligopoly
2. Overall well-being of people in the economy;
   - Maximized when the marginal cost of production equals the marginal benefit to consumers
   1. Total Product
   2. Variable Resource
   3. Price Leader
   4. Social Welfare
3. A standardized product, a product that does not differ across producers
   1. Patent
   2. Long Run
   3. Commodity
   4. Game Theory
4. The amount by which the total revenue from production exceeds variable cost.
   1. Producer Surplus
   2. Price Taker
   3. Production Function
   4. Price Maker
5. To maximize profit or minimize loss, a firm should produce the quantity at which marginal revenue equals marginal cost
   1. Perfect Competition
   2. Production Function
   3. Golden rule of Maximization
   4. Price Discrimination

5 True/False Questions

1. Perfect Competition → A market structure with many fully informed buyers and sellers of a standardized product and no obstacles to entry or exit of firms in the long run

   True        False

2. Long-Run Average Cost Curve → A curve indicates the lowest average cost of production at each rate of output when the size or scale of the firm varies; also called the planning curve

   True        False

3. Price Discrimination → A firm with the power to set the price
   GRAPH: demand curve for its output slopes downward

   True        False

4. Average revenue → total revenue divided by quantity (TR/Q)

   True        False

5. Differentiated Oligopoly → An oligopoly that sells products that differ across suppliers

   True        False