Details of this Paper

DeVry Chicago ECON312 Midterm Exam 100% Correct Answers spring 2104




Question;1. Question: (TCO 3) In which market model would there be a unique product for which there are no close substitutes?Student Answer: Monopolistic competitionPure competitionPure monopolyOligopoly2. Question: (TCO 3) Local electric or gas utility companies mostly operate in which market model?Student Answer: Monopolistic competitionPure competitionPure monopolyOligopoly3. Question: (TCO 3) The production of agricultural products such as wheat or corn would best be described by which market model?Student Answer: Monopolistic competitionPure competitionPure monopolyOligopoly4. Question: (TCO 3) In pure competition, the demand for the product of a single firm is perfectlyStudent Answer: elastic because the firm produces a unique product.inelastic because the firm produces a unique product.elastic because many other firms produce the same product.inelastic because many other firms produce the same product.5. Question: (TCO 3) A profit-maximizing firm in the short run will expand outputStudent Answer: until marginal cost begins to rise.until total revenue equals total cost.until marginal cost equals average variable long as marginal revenue is greater than marginal cost.6. Question: (TCO 3) A firm should always continue to operate at a loss in the short run ifStudent Answer: the firm will show a profit.the owner enjoys helping her can cover its variable costs and some of its fixed costs.the firm cannot produce any other products more profitably.7. Question: (TCO 3) In pure competition, each extra unit of output that a firm sells will yield a marginal revenue that isStudent Answer: equal to the price.less than the price.greater than the price.equal to the average cost.8. Question: (TCO 3) Which phrase would be most characteristic of pure monopoly?Student Answer: Close substitutesEfficient advertiserPrice takerSingle seller9. Question: (TCO 3) Barriers to entryStudent Answer: usually result in pure competition.can result from government regulation.exist in economic theory but not in the real world.are typically the result of wrongdoing on the part of a firm.10. Question: (TCO 3) The nondiscriminating pure monopolist must decrease price on all units of a product sold in order to sell more units. This explains whyStudent Answer: there are barriers to entry in pure monopoly.a monopoly has a perfectly elastic demand curve.marginal revenue is less than average revenues are greater than total costs at the profit-maximizing level of output.11. Question: (TCO 3) Which case below best represents a case of price discrimination?Student Answer: An insurance company offers discounts to safe drivers.A major airline sells tickets to senior citizens at lower prices than to other passengers.A professional baseball team pays two players with identical batting averages different salaries.A utility company charges less for electricity used during "off-peak" hours, when it does not have to operate its less-efficient generating plants.12. Question: (TCO 3) Monopolistic competition is characterized by firmsStudent Answer: producing differentiated products.making economic profits in the long run.producing at optimal productive efficiency.producing where price equals marginal cost.13. Question: (TCO 3) If monopolistically competitive firms in an industry are making an economic profit, then new firms will enter the industry and the product demand facing existing firms willStudent Answer: increase.become less elastic.not be affected.decrease.14. Question: (TCO 3) A unique feature of an oligopolistic industry isStudent Answer: low barriers to entry.standardized products.diminishing marginal interdependence.15. Question: (TCO 3) You are told that the four-firm concentration ratio in an industry is 20. Based on this information you can conclude thatStudent Answer: each of the top four firms has 20 percent of industry sales.the four largest firms account for a combined 80 percent of the industry sales.the four largest firms account for 20 percent of industry sales.each of the four largest firms accounts for five percent of industry sales.16. Question: (TCO 3) A major reason that firms form a cartel is toStudent Answer: reduce the elasticity of demand for the product.enlarge the market share for each producer.minimize the costs of production.maximize joint profits.17. Question: (TCO 1) Money is not an economic resource becauseStudent Answer: money, as such, does not produce anything.idle money balances do not earn interest is not is not a free gift of nature.18. Question: (TCO 1) Refer to the diagram which is based on the Circular Flow Model in Chapter 2. Arrows (3) and (4) representGraph DescriptionStudent Answer: goods and services, respectively.incomes and consumer expenditures, respectively.resources and goods, respectively.consumer expenditures and income, respectively.19. Question: (TCO 2) Refer to the diagram. A decrease in demand is depicted by aGraph DescriptionStudent Answer: move from Point x to Point y.shift from D1 to D2.shift from D2 to D1.move from Point y to Point x.20. Question: (TCO 2) Refer to the information and assume the stadium capacity is 5,000. The supply of seats for the gamePrice per Ticket Quantity Demanded $13 1,00011 2,0009 3,0007 4,0005 5,0003 6,000Student Answer: varies inversely with ticket prices.varies directly with ticket perfectly perfectly elastic.21. Question: (TCO 2) Which of the following goods will least likely suffer a decline in demand during a recession?Student Answer: Dinner at a nice restaurantiPodsToothpastePlasma-screen and LCD TVs22. Question: (TCO 3) In the figure, Curves 1, 2, 3, and 4 represent theStudent Answer: ATC, MC, AFC, and AVC curves, respectively.MC, AFC, AVC, and ATC curves, respectively.MC, ATC, AVC, and AFC curves, respectively.ATC, AVC, AFC, and MC curves, respectively.23. Question: (TCO 1) Refer to the diagram. Points A, B, C, D, and E showStudent Answer: that the opportunity cost of bicycles increases, while that of computers is constant.combinations of bicycles and computers that society can produce by using its resources efficiently.that the opportunity cost of computers increases, while that of bicycles is constant.that society's demand for computers is greater than its demand for bicycles.24. Question: (TCO 3) Assume that the owners of the only gambling casino in Wisconsin spend large sums of money lobbying state government officials to protect their gambling monopoly. Economists refer to these expenditures asStudent Answer: rent-seeking.price effects.25. Question: (TCO 3) a.) What is the relationship between economies of scale and a natural monopoly? b.) Why is the level of output at which marginal revenue equals marginal cost the profit-maximizing output?26. Question: (TCO 2) What effect should each of the following have upon the demand for portable music players in a competitive market? Explain your reasoning in each case.(a) the development of improved, low-priced devices that compete with music players(b) an increase in population and incomes(c) a substantial increase in the number and quality of music for players(d) consumer expectations of substantial price increases in music players


Paper#57224 | Written in 18-Jul-2015

Price : $28