ECON 201 Week 6 Quiz
Question 2 of 17
An industry that contains a firm that is the only producer of a good or service for which there are no
... [Show More] close substitutes and for which entry by potential rivals is prohibitively difficult is:
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A. a duopoly.
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B. a monopoly.
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C. an oligopoly.
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D. perfect competition.
Question 3 of 17
Which of the following is true in a perfectly competitive market?
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A. One unit of a good or service cannot be differentiated from any other on any basis.
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B. Brand preferences exist but are very slight.
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C. Barriers to entry are relatively strong.
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D. Information is costly.
Question 4 of 17
The assumptions of perfect competition imply that:
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A. individuals in the market accept the market price as given.
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B. individuals can influence the market price.
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C. the price will be a fair price.
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D. the price will be low.
Question 5 of 17
Which of the following is true?
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A. Price and average revenue are never equal.
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B. Price and marginal revenue are seldom equal under conditions of perfect competition.
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C. When a firm is operating under perfectly competitive market conditions, price and marginal cost will always be equal if the firm is maximizing profits.
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D. Average revenue equals price times quantity.
Question 6 of 17
If a firm possesses monopoly power, it means that:
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A. the firm can set its own price based on its output decision.
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B. the firm's demand curve is always elastic.
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C. the firm is necessarily a monopoly.
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D. A and C are true.
Question 7 of 17 Marginal revenue:
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A. is the slope of the average revenue curve.
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B. equals the market price in perfect competition.
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C. is the change in quantity divided by the change in total revenue.
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D. is the price divided by the changes in quantity.
Question 8 of 17
A natural monopoly exists whenever a single firm:
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A. is owned and operated by the federal or local government.
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B. is investor owned but granted the exclusive right by the government to operate in a market.
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C. confronts economies of scale over the entire range of production that is relevant to its market.
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D. has gained control over a strategic input of an important production process.
Question 9 of 17
Which of the following is (are) true?
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A. A monopoly firm is a price taker.
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B. MR > P if the demand curve is downward sloping.
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C. MR = MC is a profit-maximizing rule for any firm.
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D. All of the above are true.
Question 10 of 17
Perfect competition is important to study because it:
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A. is a theoretical extreme used for analysis.
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B. is a realistic model of a few key markets.
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C. is a realistic model of many different markets.
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D. avoids all real-world problems and complexities.
Part 2 of 3 - Perfectly Competitive Firm in the Short Run 40.0/ 40.0 Points
Question 11 of 17
(Exhibit: A Perfectly Competitive Firm in the Short Run) The firm's total cost of producing its most profitable level of output is:
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A. BS.
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B. DK.
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C. 0FKD.
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D. 0ESB.
Question 12 of 17
(Exhibit: A Perfectly Competitive Firm in the Short Run) The firm's total revenue from the sale of its most profitable level of output is:
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A. 0GLD.
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B. 0GHB.
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C. BH.
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D. DL.
Question 13 of 17
(Exhibit: A Perfectly Competitive Firm in the Short Run) The firm's total economic profit at its most profitable level of output is:
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A. 0GHB.
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B. EFJS.
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C. EGHS.
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D. FGLK.
Question 14 of 17
(Exhibit: A Perfectly Competitive Firm in the Short Run) The firm will shut down in the short run if the price falls below:
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A. 0G.
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B. 0F.
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C. 0E.
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D. 0P.
Part 3 of 3 - Computing Monopoly Profit 30.0/ 30.0 Points
Question 15 of 17
(Exhibit: Computing Monopoly Profit) The profit-maximizing price is and will generate total economic profit of .
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A. P2; EF
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B. P3; the rectangle P1P2FG
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D. P2; EF
Question 16 of 17
(Exhibit: Computing Monopoly Profit) In order to obtain maximum profits, the monopoly should produce the output determined by point .
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A. G
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B. N
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C. H
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D. K
Question 17 of 17
(Exhibit: Computing Monopoly Profit) Total economic profit at the profit-maximizing level of output is:
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A. EF.
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B. EF times Q.
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C. price minus average total cost times the quantity where MR = MC.
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D. described by B and C. [Show Less]