Entry, Exit, and Supply Curves: Decreasing Costs Practice Questions | Marginal Revolution University

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Entry, Exit, and Supply Curves: Decreasing Costs Practice Questions

As Ngoy started hiring more Cambodian refugees to work in his donut shop, this made it more likely that *

a. Competition from other doughnut shop owners would increase.

b. Ngoy’s fixed costs decreased.

c. Other Cambodians would open donut shops.

At this point in the story, what sort of cost industry (constant, increasing, or decreasing) would you consider doughnut shops owned by Cambodians to be? *

a. Constant

b. Increasing

c. Decreasing

Fast forward 40 years: What kind of cost structure are Californian doughnut shops probably in now? *

a. Constant

b. Increasing

c. Decreasing

We mentioned that carpet manufacturing looks like a decreasing cost industry. In American homes, carpets are much less popular than they were in the 1960s and 1970s, when “wall-to-wall carpeting” was fashionable in homes. Suppose that carpeting became even less popular than it is today: What would this fall in demand probably do to the price of carpet in the long run? *

a. Increase carpet prices

b. Decrease carpet prices

c. No change to carpet prices

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Principles of Economics Microeconomics

Course (105 videos)

Introduction

Introduction to Microeconomics

Practice Questions

Opportunity Cost and Tradeoffs

Practice Questions

Marginal Thinking and the Sunk Cost Fallacy

Practice Questions

Interactive Practice

Supply, Demand, and Equilibrium

The Demand Curve

Practice Questions

The Supply Curve

Practice Questions

The Equilibrium Price and Quantity

Practice Questions

Understanding the Demand Curve: Shifts and Consumer Surplus

Practice Questions

Interactive Practice

What Shifts the Demand Curve?

Practice Questions

Change in Demand vs. Change in Quantity Demanded

Interactive Practice

Understanding the Supply Curve: Shifts and Producer Surplus

Interactive Practice

What Shifts the Supply Curve?

Interactive Practice

Exploring Equilibrium

Interactive Practice

Interactive Practice

Supply and Demand Terminology

Practice Questions

Does the Equilibrium Model Work?

Practice Questions

Elasticity and Its Applications

Elasticity of Demand

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Calculating the Elasticity of Demand

Practice Questions

Office Hours: Elasticity of Demand

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Elasticity of Supply

Practice Questions

Elasticity of Supply: Why Housing is Unaffordable

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Elasticity of Supply: Do Gun Buybacks Work?

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Taxes and Subsidies

Commodity Taxes

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Who Pays the Tax?

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Tax Revenue and Deadweight Loss

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Practice Questions

Practice Questions

The Price System

A Price Is a Signal Wrapped up in an Incentive

Practice Questions

Markets Link the World

Practice Questions

The Great Economic Problem

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Information and Incentives

Practice Questions

Practice Questions

Prediction Markets

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Price Ceilings and Price Floors

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Price Ceilings: Shortages and Quality Reduction

Practice Questions

Price Ceilings: Lines and Search Costs

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Price Ceilings: Deadweight Loss

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Price Ceilings: Misallocation of Resources

Interactive Practice

Price Ceilings: Rent Controls

Practice Questions

Rent Control in Mumbai

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Price Floors: The Minimum Wage

Practice Questions

Price Floors: Airline Fares

Interactive Practice

Why Do Governments Enact Price Controls?

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Price Controls and Communism

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Trade

The Big Ideas of Trade

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Comparative Advantage

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Another Look at Comparative Advantage

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Comparative Advantage Homework

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Tariffs and Protectionism

Interactive Practice

Arguments Against International Trade

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Avengers: The Story of Globalization (Optional)

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Externalities

What Are Negative Externalities?

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Pigouvian Taxes

What Are Positive Externalities?

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Pigouvian Subsidies

Command and Control Solutions

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The Coase Theorem

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Trading Pollution

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A Deeper Look at Tradable Allowances

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Externalities and Incentives: The Economics of COVID

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Costs and Profit Maximization Under Competition

Introduction to the Competitive Firm

Practice Questions

Maximizing Profit Under Competition

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Maximizing Profit and the Average Cost Curve

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Entry, Exit, and Supply Curves: Increasing Costs

Practice Questions

Entry, Exit, and Supply Curves: Constant Costs

Practice Questions

Entry, Exit, and Supply Curves: Decreasing Costs

Practice Questions

Competition and the Invisible Hand

Minimization of Total Industry Costs of Production

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The Balance of Industries and Creative Destruction

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Monopoly

Maximizing Profit Under Monopoly

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Office Hours: Calculating Monopoly Profit

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The Monopoly Markup

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The Costs and Benefits of Monopoly

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Price Discrimination

Introduction to Price Discrimination

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The Social Welfare of Price Discrimination

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Practice Questions

Practice Questions

Labor Markets

The Marginal Product of Labor

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Econ Duel: Is Education Signaling or Skill Building?

Human Capital and Signaling

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The Tradeoff Between Fun and Wages

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Compensating Differentials

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Do Unions Raise Wages?

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Public Goods and the Tragedy of the Commons

Public Goods and Asteroid Defense

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A Deeper Look at Public Goods

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Practice Questions

The Tragedy of the Commons

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Asymmetric Information

Asymmetric Information and Used Cars

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Asymmetric Information in Health Insurance

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Practice Questions

Solutions to Moral Hazard

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Practice Questions

Consumer Choice

Introduction to Consumer Choice

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Budget Constraints

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Indifference Curves

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Consumer Optimization

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Office Hours: Game Theory

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Principles of Economics: Microeconomics

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