Because it does not face competition from other firms, a monopolist is guaranteed to make excess profits over time. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Because most gas stations are small relative to the market in which they operate and gasoline is fairly homogeneous, the market for gasoline is considered to be perfectly competitive. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Marginal revenue equals 0 when: A) total revenue is increasing. B) total revenue is at its maximum. C) total revenue is decreasing. D) none of the above; marginal revenue is always positive. ANSWER B
Date: September 10th, 2020
Limit pricing is used primarily to: A) discourage new firms from entering a market. B) reduce (limit) the profits of all of the firms in the industry. C) drive other firms out of a market. D) establish a minimum price all of the firms in the market will charge. ANSWER A
Date: September 10th, 2020
The positively-sloped part of the long-run average total cost curve is due to which of the following? A) Diseconomies of scale. B) Diminishing returns. C) The firm being able to take advantage of large-scale production techniques as it expands its output. D) The increase in productivity that results from specialization. ANSWER A
Date: September 10th, 2020
Assume a monopolistically competitive firm comes up with a new innovation that allows it to earn above-normal economic profits. Given the nature of the market in which it operates, over time those profits will be competed away as new competitors enter the market. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
The primary objective of a cartel is to: A) maximize the amount of profit received by each member of the organization. B) maximize the joint profits of the members of the organization. C) ensure each member of the organization some minimum amount of profit. D) maximize the average profits of the members of the organization. […]
Date: September 10th, 2020
Long-run average cost is defined as: A) the minimum average cost of producing any level of output when all inputs are variable. B) the minimum average cost of producing any level of output when the amount of capital is varied and all other inputs are held constant. C) the average of the short-run costs associated […]
Date: September 10th, 2020
Predatory pricing is used primarily to: A) discourage new firms from entering a market. B) reduce (limit) the profits of all of the firms in the industry. C) drive other firms out of a market. D) establish a minimum price all of the firms in the market will charge. ANSWER C
Date: September 10th, 2020
Potential GDP is: A) minimum amount of output that can be produced given the labor force, capital stock, and technology. B) maximum amount of output that can be produced given the labor force, capital stock, and technology. C) varies over the business cycle. D) none of the above. ANSWER B
Date: September 10th, 2020
