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Question;MULTIPLE CHOICE. Choose the one alternative that best completes;the statement or answers the question.;1) What is the difference between perfect competition and;monopolistic competition?;A) Perfect competition has a large number of small firms while;monopolistic competition;does not.;B) In monopolistic competition, firms produce identical goods;while in perfect competition;firms produce slightly different goods.;C) Perfect competition has no barriers to entry, while monopolistic;competition does.;D) In perfect competition, firms produce identical goods, while;in monopolistic competition;firms produce slightly different goods.;E) Perfect competition has barriers to entry while monopolistic;competition does not.;1);2) In a perfectly competitive market, the type of decision a;firm has to make is different in the short;run than in the long run. Which of the following is an example;of a perfectly competitive firm's;short-run decision?;A) the profit-maximizing level of output;B) whether or not to change its plant size;C) how much to spend on advertising and sales promotion;D) what price to charge buyers for the product;E) whether or not to enter or exit an industry;2);3) The firm's over-riding objective is to;A) maximize economic profit.;B) avoid an economic loss.;C) maximize total revenue.;D) maximize normal profit.;E) earn a normal profit.;3);4) The price charged by a perfectly competitive firm is;A) higher the more the firm produces.;B) different than the price charged by competing firms.;C) the same as the market price.;D) indeterminate.;E) lower the more the firm produces.;4);5) A profit-maximizing output for a single-price monopoly is determined by the intersection of the;curves and the profit-maximizing;price is found on the ________ curve.;A) total revenue and total cost, total revenue;B) marginal cost and marginal revenue, marginal revenue;C) demand and supply, supply;D) marginal cost and marginal revenue, demand;E) marginal cost and average total cost, demand;5);6) A single-price monopoly has marginal revenue and;marginal cost equal to $19 at 15 units of;output where the price on the demand curve is $38. At this;output, average total cost is $15.;What is the total profit earned?;A) $225 B) $570 C) $19 D) $285 E) $345;6);1;7) Rate of return regulation is designed to allow a natural;monopoly to;A) underestimate its average cost.;B) earn zero normal profit.;C) earn an economic profit.;D) earn a normal profit.;E) compete with any firm entering the market.;7);8) Which of the following is true about monopolistic;competition but false about perfect;competition?;A) Firms can earn an economic profit in the short run.;B) There are a large number of independently acting sellers.;C) There are no barriers to entry.;D) Firms compete on their product's price as well as its;quality and marketing.;E) Firms cannot earn an economic profit in the long run.;8);9) What does monopolistic competition have in common with;monopoly?;A) mutual interdependence;B) the ability to collude with respect to price;C) a large number of firms;D) a downward-sloping demand curve;E) barriers to entry;9);10) Firms in monopolistic competition have demand curves that;are;A) U-shaped.;B) horizontal.;C) downward sloping.;D) vertical.;E) upward sloping.;10);2;11) Kevin owns a personal training gymnasium in Orlando. The;above figure shows the demand;and cost curves for his firm, which competes in a;monopolistically competitive market. Kevin;will train how many clients per day?;A) between 2 and 4;B) 6;C) 10;D) 4;E) None of the above answers is correct.;11);12) Kevin owns a personal training gymnasium in Orlando. The;above figure shows the demand;and cost curves for his firm, which competes in a;monopolistically competitive market. What;price will Kevin charge per session?;A) $20 B) $80 C) $60 D) $100 E) $40;12);13) In monopolistic competition, the products of different;sellers are;A) similar but slightly different.;B) unique without any close or perfect substitutes.;C) perfect substitutes.;D) identical.;E) either identical or differentiated.;13);14) When a monopolistically competitive firm's demand curve;shifts leftward, what happens to its;marginal revenue curve?;A) It disappears.;B) Nothing, the marginal revenue curve is unchanged.;C) It shifts leftward.;D) It shifts rightward.;E) None of the above is correct because the effect on the;marginal revenue curve depends on;whether the demand was initially elastic or inelastic.;14);3;15) Firms in an oligopoly;i. are independent of each others' actions.;ii. can each influence the market price.;iii. charge a price equal to marginal revenue.;A) i only;B) i and iii;C) ii only;D) iii only;E) i, ii, and iii;15);16) When oligopolies seek to operate as a single-price monopoly, the firms produce at the point;where;A)MR=MC.;B)P;=MR.;C)P;

 

Paper#57926 | Written in 18-Jul-2015

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