Question :
Table 13-1
Quantity
Price
(dollars)
Total Revenue
: 1387820
Table 13-1
Quantity
Price
(dollars)
Total Revenue
(dollars)
1
$7.50
$7.50
2
7.00
14.00
3
6.50
19.50
4
6.00
24.00
5
5.50
27.50
6
5.00
30.00
19) Refer to Table 13-1. What is the marginal revenue of the 3rd unit?
A) $6.50
B) $5.50
C) $1.83
D) $0.50
20) Refer to Table 13-1. The Table shows
A) an elastic segment of the demand curve.
B) an inelastic segment of the demand curve.
C) a demand curve with an elastic segment of the demand curve from $7.50 to $6.50 followed by an inelastic segment.
D) a demand curve with an inelastic segment of the demand curve from $7.50 to $6.50 followed by an elastic segment.
21) Refer to Table 13-1. What portion of the marginal revenue of the 4th unit is due to the output effect and what portion is due to the price effect?
A) output effect = $24.00; price effect = $19.50
B) output effect = $6.50; price effect = $2.00
C) output effect = -$0.50; price effect = $5.00
D) output effect = $6.00; price effect = -$1.50
22) Refer to Table 13-1. What portion of the marginal revenue of the 5th unit is due to the output effect and what portion is due to the price effect?
A) output effect = $3.00; price effect = $0.50
B) output effect = $1.50; price effect = $2.00
C) output effect = $5.50; price effect = -$2.00
D) output effect = $4.00; price effect = -$0.50
Figure 13-1
23) Refer to Figure 13-1. The marginal revenue from the increase in price from P0 to P1 equals
A) the area A.
B) the area (B + D – A).
C) the area (A – D).
D) the area (C – B).
Figure 13-2
24) Refer to Figure 13-2. The marginal revenue from selling the additional unit Qb instead of Qa equals
A) the area (G + H).
B) the area (H – E).
C) the area (E + F) – (G + H).
D) the area G.
25) Which of the following statements is true about marginal revenue?
A) If marginal revenue is zero, it means that quantity demanded falls to zero when a firm changes its price.
B) If marginal revenue is negative, the additional revenue received from selling 1 more unit of the good is smaller than the revenue lost from receiving a lower price on all the units that could have been sold at the original price.
C) If marginal revenue is positive, the additional revenue received from selling 1 more unit of the good is smaller than the revenue lost from receiving a lower price on all the units that could have been sold at the original price.
D) Marginal revenue increases as price falls and quantity sold increases.
26) Which of the following characterizes the market that Starbucks competes in?
A) All coffeehouses face horizontal demand curves.
B) Coffeehouses sell identical products.
C) Barriers to entry are low.
D) There are a small number of firms.
27) Starbucks started out small in 1971, but by 1993 Starbucks was a national chain and had coffeehouses in 38 countries. A key to the company’s success was the realization by executives that
A) there was a demand for coffeehouses where consumers could sit and drink high-quality coffee.
B) coffee prices would have to be cut in order for Starbucks to compete with other stores that sold coffee.
C) they had to keep their stores open longer hours to attract a large number of customers.
D) their stores should be located close to other stores that sold similar products.
28) A monopolistically competitive market is described as one in which there are
A) a few firms producing an identical product.
B) a large number of firms selling similar, but not identical, products.
C) a few firms producing differentiated products.
D) one large firm and many small firms producing identical products.
