Chapters 5, 6, 8, 9 T/F
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| show | True
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| show | True
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| show | True
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| show | True
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| When the slope of a demand curve is constant, price elasticity of demand is constant as well. | show 🗑
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| A demand curve with continuously changing slope over all quantity values will always have a constant price elasticity of demand | show 🗑
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| A demand curve with constant slope over all quantity values can have a continuously changing price elasticity of demand. | show 🗑
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| A tax on a good whose demand is price elastic will be effective in discouraging consumption of that good. | show 🗑
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| show | False
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| How total revenue changes when a price changes can be predicted using price elasticity of demand. | show 🗑
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| When demand is elastic, an increase in price will result in an increase in total revenue. | show 🗑
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| When demand is elastic, a decrease in price will result in an increase in total revenue | show 🗑
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| show | True
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| When demand is inelastic, a decrease in price will result in an increase in total revenue | show 🗑
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| When demand is unit elastic, an increase in price will result in an increase in total revenue. | show 🗑
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| When demand is unit elastic, a decrease in price will result in no change in total revenue. | show 🗑
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| Chapter 6 | show 🗑
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| Assuming a perfectly competitive market implies that households have perfect knowledge of qualities and prices of everything available in the market. | show 🗑
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| Homogeneous products are distinguishable from each other. | show 🗑
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| Price increase cause a decrease in a household's choice set | show 🗑
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| show | True
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| The law of diminishing marginal utility implies that as a household consumes more of a product, its total utility will increase by smaller amounts, assuming marginal utility remains positive. | show 🗑
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| The law of diminishing marginal utility implies that total utility never reaches a maximum | show 🗑
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| When consumer maximum utility, they are equating the ratio of marginal utility to price across all goods consumed. | show 🗑
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| show | False
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| show | False
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| show | False
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| show | True
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| Homogeneous products are distinguishable from each other | show 🗑
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| show | True
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| Income increases cause an increase in a household's choice set | show 🗑
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| Chapter 8 | show 🗑
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| Average fixed costs rise continuously as quantity of output rises | show 🗑
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| show | True
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| The best combination of inputs at one level of production may not be best at other levels. | show 🗑
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| If marginal cost is increasing, then average variable cost must be increasing simultaneously | show 🗑
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| Average total cost and average variable cost are minimized at the same level of output. | show 🗑
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| When the price of a good increases, the budget constraint does not change | show 🗑
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| show | False
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| show | True
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| Homogeneous products are distinguishable from each other. | show 🗑
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| show | True
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| show | True
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| show | True
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| Demand for the product of an industry in perfect competition is assumed to be inelastic | show 🗑
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| show | True
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| show | False
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| show | True
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| The short-run is a period of less than one year | show 🗑
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| (Ch8 Q18)The production decision is a short-run decision | show 🗑
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| show | **False? Maybe**
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| (ch8 q20)For a perfectly competitive firm, when P=MC=ATC, te most profit the firm can earn is zero | show 🗑
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| Firms maximize their profits by producing the output level where MR=MC | show 🗑
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| show | True
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| The upward sloping portion of the perfectly competitive firm's average total cost curve is the firm's short run supply curve. | show 🗑
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| show | True
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| show | False
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| Chapter 9 | show 🗑
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| Input prices fall as entry occurs in an increasing-cost industry. | show 🗑
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| Input prices fall as entry occurs in an decreasing-cost industry | show 🗑
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| show | True
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| show | False
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| Information on MC of production is all that is necessary to obtain the long run industry supply curve, because P = MC is the profit-maximization condition for all firms | show 🗑
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| show | True
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| show | True
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| In the short run, firms suffering losses should always shut down. | show 🗑
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| At all prices below the shutdown point, optimal short-run output is zero. | show 🗑
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| The horizontal sum of marginal cost curves (above AVC) of all the firms in an industry is the short-run industry supply curve | show 🗑
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| show | True
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| show | False
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| show | True
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| Across different output levels, a firm can experience both economies and diseconomies of scale. | show 🗑
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| A firm's long-run average cost curve represents the minimum cost of producing each level of output when the scale of production can be adjusted. | show 🗑
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| A firm that has increasing returns to scale in the long run does not experience diminishing marginal returns in the short run. | show 🗑
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