The negatively-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 difficulties encountered in coordinating the many activities of a large firm. D) The increase in productivity that results from specialization. ANSWER D
Date: September 10th, 2020
In which of the following scenarios would a predatory pricing scheme have the greatest chance of success, all else constant? A) The predatory price is set well below cost, many rivals are likely to enter after the strategy ends, and profits can be recouped only over a relatively long period of time. B) The predatory […]
Date: September 10th, 2020
At the point on the demand curve at which marginal revenue = 0, the absolute value of the coefficient of the price elasticity of demand is: A) > 1. B) = 1. C) < 1. D) = 0. ANSWER B
Date: September 10th, 2020
Short-run macroeconomic policies concentrate on: A) minimizing fluctuations around potential GDP. B) maximizing fluctuations around potential GDP. C) incentives for increasing productivity and the potential output of the economy. D) none of the above. ANSWER A
Date: September 10th, 2020
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
