Quiz 6

1. 1In a market with external economies, the long run industry supply curve is

   1. AUpward sloping
   2. BDownward sloping
   3. CU-shaped
   4. DHorizontal
2. 2Which of the following is not one of the basic market types?

   1. APerfect competition
   2. BOligopoly
   3. CInput market
   4. DMonopolistic competition
3. 3Marginal revenue is

   1. Athe additional revenue gained when selling one more unit of output
   2. Bequal to the market price for a firm in a monopoly market
   3. Cthe difference between marginal cost and total cost
   4. DAnswers A. and B. are correct
4. 4A monopoly

   1. Ais never permitted (by the government) to exist
   2. Bis a single seller of a product with no close substitutes
   3. Creally does no harm because other companies sell products that are very similar
   4. Dis a price taker
5. 5Which of the following is not considered a barrier to entry?

   1. AAdvanced technology
   2. BEconomies of scale
   3. CNetwork effects
   4. DPatents
6. 6Which best describes the supply curve for a monopoly?

   1. AIts marginal cost curve
   2. BIts average total cost curve
   3. CIt is downward-sloping
   4. DA monopoly has no supply curve
7. 7To maximize profit, the monopolist produces the level of output where

   1. AMR = P
   2. BMR = MC, and then charges a price equal to MC
   3. CMR = MC, and then charges the price on the demand curve that corresponds to the quantity
   4. DP = MC
8. 8Rent-seeking activities

   1. AHelp consumers recover some of the consumer surplus they lose to high monopoly prices
   2. BAre the result of the demand for land exceeding the supply
   3. CAre advertising expenditures made by landlords
   4. DAre expenditures by firms to create or maintain monopoly power
9. 9In comparing monopolistic competition to perfect competition, what is the "price of variety?"

   1. AMonopolistic competition provides greater product variety but causes a deadweight loss
   2. BThe increased sales caused by advertising by firms in monopolistic competition
   3. CWasteful packaging
   4. DThe high profits earned by monopolistically competitive firms in the long run
10. 10When firms in a monopolistic competition market earn positive economic profits

    1. AThey will continue to do so over a long period of time due to high barriers to entry
    2. BEntry by new firms in the long run shifts the demand and marginal revenue curves for products of existing firms downward and eliminates the profits
    3. CThey do so by charging unfairly high prices
    4. DIt is because the firms engage in illegal collusive (cooperative) behavior

11. 11Why is MR < P in a monopoly[blank_start]?[blank_end]

    1. A?
12. 12What is the biggest difference between perfect competition and monopolistic competition?
    Why is that difference important[blank_start]?[blank_end]

    1. A?

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Quiz on Quiz 6, created by Sophia . on 06/12/2018.

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