QUESTION 80

1. The following statements about the differences between monopoly and perfect competition are all correct EXCEPT?
2. A.A monopoly will charge a higher price and produce a smaller quantity than a competitive market with the same demand and cost structure.
3. B.A monopolist has market power, while a perfect competitor does not.
4. C.Unlike a perfectly competitive firm, a monopoly can make positive economic profits in the long run.
5. D.Monopoly profits can continue in the long run because the monopoly produces more and charges a higher price than a comparable perfectly competitive industry.

QUESTION 79

1. When firms collude, they are looking to operate as a monopoly by:
2. A.determining output where price equals marginal cost.
3. B.raising price and output in the market.
4. C.raising price and reducing output in the market.
5. D.lowering price and output in the market.

QUESTION 78

As a firm increases its production of output,the total cost:

1. A.will fall if the firm is experiencing diminishing marginal returns.
2. B.will stay the same
3. C.will fall.
4. D.will fall or rise.
5. E.will rise.

QUESTION 77

The termdiminishing returnsrefers to a:

1. A.decrease in the extra output due to the use of an additional unit of a variable input, when more and more of the variable input is used and all other things are held constant.
2. B.decrease in total output due to overcrowding, when too much labor is used with too little land or capital.
3. C.reduction in profits caused by increasing output beyond the optimal point.
4. D.falling interest rate that can be expected as one's investment in a single asset increases.

QUESTION 76

The only market structure that does NOT have control over its price is:

1. A.perfect competition.
2. B.monopolistic competition.
3. C.oligopoly.
4. D.monopoly.

QUESTION 75

The most important source of oligopoly in an industry is:

1. A.technological inferiority.
2. B.ownership of plentiful resources.
3. C.government regulation.
4. D.economies of scale.

QUESTION 74

The average total cost of producing cell phones in a factory is $15 at the current output level of 100 units per week. If fixed cost is $1,200 per week:

1. A.average fixed cost is $10.
2. B.total cost is $1500.
3. C.total cost is $3,200.
4. D.variable cost is $2,000.
5. E.average variable cost is $80.

QUESTION 73

Suppose a firm produces 20 units of output. At that level, ATC is 70,P= 50, MR and MC = 30. The firm is experiencing a loss of:

1. A.$600.
2. B.$400.
3. C.$1,000.
4. D.$1,400.

QUESTION 72

Suppose a firm produces 20 units of output. At that level of output, ATC = 45,P= 50, MR and MC = 30. The firm's economic profit is:

1. A.$1,000.
2. B.100
3. C.$700.
4. D.$600.
5. E.$300.

QUESTION 71

Suppose a firm produces 20 units of output. At that level of output, ATC = 35,P= 50, MR and MC = 30. The firm's economic profit is:

1. A.$700.
2. B.$600.
3. C.$1,000.
4. D.$300.

QUESTION 70

Perfectly competitive firms and monopoly firms should increase production when:

1. A.marginal revenue is greater than marginal cost.
2. B.price is equal to marginal cost.
3. C.marginal revenue is less than marginal cost.
4. D.price is less than marginal cost.