Exam 7: Efficiency, Exchange, and the Invisible Hand in Action

Cost saving developments-e.g. ,a new production procedure that shortens a production process by two steps-in a perfectly competitive industry will lead to:

Which ordering best describes how a perfectly competitive industry would respond to a sudden increase in popularity of the product? The market demand function will shift to the right,causing the market:

The sum of the economic surpluses accruing to buyers and sellers is:

Daily Supply and Demand: Oranges in Hurricane Alley Refer to the figure above.What is the cost of harvesting the tenth pound of oranges?

Accounting profits are:

Suppose that in an effort to help single parents,the government has decided to pay part of the cost of childcare.This measure will

Assume that all firms in this industry have identical cost functions. The firm depicted in the graph on the right faces a demand curve that

Professor Plum,who earns $75,000 per year,read in the paper today that the university pays its basketball coach one million dollars per year in exchange for the coach's agreement to remain at the university for at least three more years.The coach earns more than Professor Plum because:

In an industry with free entry and exit,economic profits:

Last year Pat was a soybean farmer and Chris was a corn farmer.This year,high demand for ethanol,an automobile fuel made from corn,causes the price of corn to increase. Refer to the information above.You would predict that this year Pat may:

Last year Pat was a soybean farmer and Chris was a corn farmer.This year,high demand for ethanol,an automobile fuel made from corn,causes the price of corn to increase. Refer to the information above.Suppose Pat stopped growing soybeans and began growing corn.What principle would explain that change?

One difference between the long run and the short run in a perfectly competitive industry is that:

Explicit costs:

The statement,"price distributes goods and services to those that value them the most" refers to the ______ function of price.

It is always true that:

If all firms in a perfectly competitive industry are experiencing economic losses,then firms will:

The No Cash on the Table principle means unexploited opportunities:

A price ceiling that is below the equilibrium price will cause:

Ingrid has been waiting for the show "Mamma Mia!" to come to town.When it finally does come,ticket prices are $60.Ingrid's reservation price is $75.But when Ingrid tries to buy a ticket,they are sold out. Refer to the information above.Sven had purchased a ticket at the ticket window for $60.Sven's reservation price is $65.If Sven attends "Mamma Mia!" and Ingrid does not,it is:

If the demand curve fails to capture all of the benefits of consumption,then the: