Filters
Question type
Study Flashcards

A markup of price over marginal cost is inconsistent with free entry and zero profit.

A) True
B) False

Correct Answer

verifed

verified

In a monopolistically competitive market,


A) strategic interactions among the firms are very important.
B) the threat of entry by new firms is not an important consideration.
C) the attainment of a Nash equilibrium is an important objective.
D) firms may enter even though they will earn zero economic profit in the long run.

E) C) and D)
F) A) and D)

Correct Answer

verifed

verified

A firm produces the welfare-maximizing level of output


A) only when the market is perfectly competitive.
B) only when the market is a monopoly or monopolistically competitive.
C) only when the market is monopolistically competitive or perfectly competitive.
D) when the market is perfectly competitive, monopolistically competitive, or monopolistic.

E) None of the above
F) B) and C)

Correct Answer

verifed

verified

In the long run, monopolistically competitive firms produce where demand equals average total cost.

A) True
B) False

Correct Answer

verifed

verified

Table 16-5 This table shows the demand schedule, marginal cost, and average total cost for a monopolistically competitive firm. Table 16-5 This table shows the demand schedule, marginal cost, and average total cost for a monopolistically competitive firm. -Refer to Table 16-5. Which of the following statements regarding this monopolistically competitive firm is correct? A) New firms will enter this market in the long run since firm profits are greater than zero. B) Firms will leave this market in the long run since firm profits are less than zero. C) This firm is currently in long-run equilibrium. D) This firm is currently in long-run equilibrium, and the firm is producing its efficient scale of output. -Refer to Table 16-5. Which of the following statements regarding this monopolistically competitive firm is correct?


A) New firms will enter this market in the long run since firm profits are greater than zero.
B) Firms will leave this market in the long run since firm profits are less than zero.
C) This firm is currently in long-run equilibrium.
D) This firm is currently in long-run equilibrium, and the firm is producing its efficient scale of output.

E) All of the above
F) None of the above

Correct Answer

verifed

verified

Firms in industries that have competitors but do not face so much competition that they are price takers are operating in either a(n)


A) oligopoly or perfectly competitive market.
B) oligopoly or monopoly market.
C) oligopoly or monopolistically competitive market.
D) monopoly or monopolistically competitive market.

E) All of the above
F) A) and C)

Correct Answer

verifed

verified

In perfect competition as well as in monopolistic competition,


A) marginal revenue is equal to price for each firm.
B) profit is positive in a long-run equilibrium for each firm.
C) entry and exit by firms are restricted.
D) there are many firms in a single market.

E) A) and B)
F) C) and D)

Correct Answer

verifed

verified

Figure 16-3 This figure depicts a situation in a monopolistically competitive market. Figure 16-3 This figure depicts a situation in a monopolistically competitive market. -Refer to Figure 16-3. This firm is operating A) in the short run and earning a positive economic profit. B) in the short run and breaking even. C) in the long run and earning a positive economic profit. D) in the long run and incurring and economic loss. -Refer to Figure 16-3. This firm is operating


A) in the short run and earning a positive economic profit.
B) in the short run and breaking even.
C) in the long run and earning a positive economic profit.
D) in the long run and incurring and economic loss.

E) B) and D)
F) B) and C)

Correct Answer

verifed

verified

In both perfect competition and monopolistic competition, each firm


A) has some monopoly power.
B) sells a product that is at least slightly different from those of other firms.
C) faces a downward-sloping demand curve.
D) has many competitors.

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

If advertising reduces a consumer's price sensitivity between identical goods, it is likely to


A) increase the elasticity of demand for differentiated products.
B) enhance competition and encourage more product diversity.
C) reduce competition and reduce social welfare.
D) encourage the consumption of all homogenous goods.

E) None of the above
F) A) and B)

Correct Answer

verifed

verified

Table 16-6 Beatrice's Birthday Cakes is one bakery among many in the market for birthday cakes. The following table presents cost and revenue data for birthday cakes at Beatrice's. Table 16-6 Beatrice's Birthday Cakes is one bakery among many in the market for birthday cakes. The following table presents cost and revenue data for birthday cakes at Beatrice's. -Refer to Table 16-6. Suppose the government forced Beatrice's to produce at the efficient scale of output. Who would be better off as a result of this policy? Who would be worse off as a result of this policy? A) Beatrice's would be better off; consumers would be worse off. B) Consumers would be better off; Beatrice's would be worse off. C) No one would be better off; consumers would be worse off. D) No one would be better off; no one would be worse off. -Refer to Table 16-6. Suppose the government forced Beatrice's to produce at the efficient scale of output. Who would be better off as a result of this policy? Who would be worse off as a result of this policy?


A) Beatrice's would be better off; consumers would be worse off.
B) Consumers would be better off; Beatrice's would be worse off.
C) No one would be better off; consumers would be worse off.
D) No one would be better off; no one would be worse off.

E) C) and D)
F) All of the above

Correct Answer

verifed

verified

Figure 16-1 Figure 16-1 -Refer to Figure 16-1. Which of the graphs illustrates a relatively elastic, though not perfectly elastic, demand curve consistent with a market that has many substitute products? A) Panel A B) Panel B C) Panel C D) Panel D Figure 16-1 -Refer to Figure 16-1. Which of the graphs illustrates a relatively elastic, though not perfectly elastic, demand curve consistent with a market that has many substitute products? A) Panel A B) Panel B C) Panel C D) Panel D Figure 16-1 -Refer to Figure 16-1. Which of the graphs illustrates a relatively elastic, though not perfectly elastic, demand curve consistent with a market that has many substitute products? A) Panel A B) Panel B C) Panel C D) Panel D Figure 16-1 -Refer to Figure 16-1. Which of the graphs illustrates a relatively elastic, though not perfectly elastic, demand curve consistent with a market that has many substitute products? A) Panel A B) Panel B C) Panel C D) Panel D -Refer to Figure 16-1. Which of the graphs illustrates a relatively elastic, though not perfectly elastic, demand curve consistent with a market that has many substitute products?


A) Panel A
B) Panel B
C) Panel C
D) Panel D

E) A) and C)
F) B) and C)

Correct Answer

verifed

verified

A monopolistically competitive market is characterized by


A) free entry, but not differentiated products.
B) differentiated products, but not long run profits.
C) long run profits, but not many firms.
D) many firms, but not free entry.

E) A) and D)
F) A) and C)

Correct Answer

verifed

verified

Among arguments for and against advertising, both sides agree that advertising leads to


A) higher prices and less competitive markets.
B) higher prices and more competitive markets.
C) lower prices and more competitive markets.
D) None of the above is correct. The debate fails to resolve the question of advertising's effect on prices and competition.

E) C) and D)
F) B) and C)

Correct Answer

verifed

verified

Which of the following statements is correct?


A) Cigarettes are likely to be produced in a monopolistically competitive industry.
B) Novels are likely to be produced in a monopoly industry.
C) Movies are likely to be produced in a monopolistically competitive industry.
D) Milk is likely to be produced in an oligopoly industry.

E) A) and C)
F) B) and C)

Correct Answer

verifed

verified

Figure 16-11 Figure 16-11 -Refer to Figure 16-11. The profit for this firm is A) $375. B) $500. C) $1000. D) $1250. -Refer to Figure 16-11. The profit for this firm is


A) $375.
B) $500.
C) $1000.
D) $1250.

E) All of the above
F) B) and C)

Correct Answer

verifed

verified

A firm can earn economic profits in the long run


A) only when the market is a monopoly.
B) only when the market is a monopoly or monopolistically competitive.
C) only when the market is monopolistically competitive or perfectly competitive.
D) when the market is perfectly competitive, monopolistically competitive, or monopolistic.

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

Scenario 16-2 Suppose market demand for a product is given by the equation P = 20 - Q. For this market demand curve, marginal revenue is MR = 20 - 2Q. -Refer to Scenario 16-2. If the marginal cost of producing this good is 0, what price would a profit-maximizing monopolist charge for the product?


A) P = 0
B) P = 5
C) P = 10
D) P = 20

E) B) and C)
F) A) and D)

Correct Answer

verifed

verified

Which of the following statements is correct?


A) The more similar Firm A's product is to Firm B's product, the more likely Firm A is to advertise.
B) Monopolistically competitive firms advertise in order to increase the elasticity of the demand curve they face.
C) According to the signaling theory, the more product information an advertisement contains, the more effective it is.
D) Brand names may help consumers if they provide information about the quality of a product when acquiring such information is difficult.

E) B) and C)
F) A) and C)

Correct Answer

verifed

verified

A firm in a monopolistically competitive market can earn short-run profits but not long-run profits.

A) True
B) False

Correct Answer

verifed

verified

Showing 181 - 200 of 580

Related Exams

Exam 1

Ten Principles of Economics

439 Questions

Exam 2

Thinking Like an Economist

617 Questions

Exam 3

Interdependence and the Gains From Trade

527 Questions

Exam 4

The Market Forces of Supply and Demand

697 Questions

Exam 5

Elasticity and Its Application

594 Questions

Exam 6

Supply, Demand, and Government Policies

645 Questions

Exam 7

Consumers, Producers, and the Efficiency of Markets

549 Questions

Exam 8

Application: the Costs of Taxation

513 Questions

Exam 9

Application: International Trade

492 Questions

Exam 10

Externalities

524 Questions

Exam 11

Public Goods and Common Resources

433 Questions

Exam 12

The Design of the Tax System

549 Questions

Exam 13

The Costs of Production

420 Questions

Exam 14

Firms in Competitive Markets

543 Questions

Exam 15

Monopoly

637 Questions

Exam 17

Oligopoly

488 Questions

Exam 18

The Markets for the Factors of Production

564 Questions

Exam 19

Earnings and Discrimination

490 Questions

Exam 20

Income Inequality and Poverty

455 Questions

Exam 21

The Theory of Consumer Choice

431 Questions

Exam 22

Frontiers of Microeconomics

440 Questions

Exam 23

Measuring a Nations Income

520 Questions

Exam 24

Measuring the Cost of Living

529 Questions

Exam 25

Production and Growth

505 Questions

Exam 26

Saving, Investment, and the Financial System

564 Questions

Exam 27

The Basic Tools of Finance

500 Questions

Exam 28

Unemployment

678 Questions

Exam 29

The Monetary System

515 Questions

Exam 30

Money Growth and Inflation

481 Questions

Exam 31

Open-Economy Macroeconomics: Basic Concepts

522 Questions

Exam 32

A Macroeconomic Theory of the Open Economy

475 Questions

Exam 33

Aggregate Demand and Aggregate Supply

562 Questions

Exam 34

The Influence of Monetary and Fiscal Policy on Aggregate Demand

508 Questions

Exam 35

The Short-Run Trade-Off Between Inflation and Unemployment

491 Questions

Exam 36

Six Debates Over Macroeconomic Policy

372 Questions

Show Answer