Question 1

You can tell a firm is operating in a market that is in long-run competitive equilibrium if:

Accepted Answer

A)   economic profits are positive.
B)   economic profits are negative.
C)   your accountant tells you profits are negative.
D)   your accountant tells you profits are zero.
E)   economic profits are zero.

Question 2

If Firm A is making zero economic profits:

Accepted Answer

A)   Firm A's accountant reports that it is making zero profits.
B)   Firm A is breaking even when opportunity cost is taken into consideration.
C)   other firms want to enter the market.
D)   Firm A wants to leave the market.
E)   Firm A wants to stop producing in the short run.

Question 3

When a town has a single cable provider:

Accepted Answer

A)   the cable company usually offers many different cable packages to satisfy customers' wants.
B)   customers must buy some cable channels that they do not want in order to get the channels that they do want.
C)   the government regulates the cable provider's offerings.
D)   the cable provider is a price-taker.
E)   the consumers experience no consumer surplus.

Question 4

Answer the following questions based on the accompanying graph.
  
a.What are the profit-maximizing price and quantity?
b.At the profit-maximizing price and quantity, what are the total profits or losses made by this firm?

Accepted Answer

a.The profit-maximizing price and quanti...

Question 5

In Alabama,it is illegal to hunt alligators without a license.The government controls the number of licenses that can be purchased each year; thus,there is a limit on the number that can be purchased.Assuming there is an unlimited supply of alligators in Alabama,what would happen to the price and quantity of alligator sausage if the government stopped controlling the number of these hunting licenses?

Accepted Answer

By controlling the number of licenses th...

Question 6

Inefficient output and price,few choices,and rent seeking are all problems associated with:

Accepted Answer

A)   economies of scale.
B)   competitive markets.
C)   monopolies.
D)   scarcity.
E)   trade.

Question 7

Which of the following is a characteristic of a monopoly but not a characteristic of a competitive market?

Accepted Answer

A)   A monopoly contains many firms.
B)   A monopoly produces an efficient level of output.
C)   A monopoly may earn long-run economic profits.
D)   A monopoly has no market power.
E)   A monopoly is a price-taker.

Question 8

Refer to the accompanying set of graphs to answer the questions that follow.

-Which graph would result in firms entering a perfectly competitive market in the long run?

Accepted Answer

A)   A
B)   B
C)   C
D)   D
E)   E

Question 9

Holding all else constant,an increase in the market demand for a product in a competitive market would cause:

Accepted Answer

A)   the average total cost (AT
C)   curve of the firms to increase.
B)   a decrease in the price a firm could charge for the product.
C)   the marginal revenue (MR)  curve of the firms to shift upward/rightward.
D)   the marginal cost (M
C)   curve of the firms to increase.
E)   a decrease in profits for the firm.

Question 10

When resources are used to secure monopoly rights through the political process:

Accepted Answer

A)   firms are rent seeking.
B)   consumers are profit maximizing.
C)   total surplus is maximized.
D)   the government is deregulating.
E)   prices decrease.

Question 11

Monopolies result in a(n) ________ level of output and provide ________ choice to consumers.

Accepted Answer

A)   inefficient; less
B)   inefficient; more
C)   efficient; less
D)   efficient; more
E)   high; more

Question 12

Refer to the accompanying figure.A firm would produce in the long run only if the market price is:

Accepted Answer

A)   above $20.
B)   above $15.
C)   between $15 and $20.
D)   above $8.
E)   between $8 and $15.

Question 13

In the soda industry,production costs per unit continue to fall as the firm expands.In this type of industry,smaller rivals trying to enter the industry:

Accepted Answer

A)   will easily be able to gain market power.
B)   have lower average costs.
C)   do not have high fixed costs.
D)   will have much higher average costs.
E)   experience a government-created barrier.

Question 14

Rent seeking:

Accepted Answer

A)   is desired by consumers.
B)   is not a type of competition.
C)   is a type of competition that leads to a market price and output.
D)   is a type of competition that leads to an undesirable outcome.
E)   occurs when resources are used to deregulate a market through the political process.

Question 15

When firms enter a market,the ________,causing individual firms' profits to ________.

Accepted Answer

A)   long-run market supply curve shifts right; decrease
B)   short-run market supply curve shifts left; decrease
C)   short-run market supply curve shifts left; increase
D)   short-run market supply curve shifts right; decrease
E)   short-run market supply curve shifts right; increase

Question 16

Willow Park is a small community in Texas with only one gas station.The price of gasoline in Willow Park most likely:

Accepted Answer

A)   never changes.
B)   is lower than in the big cities in Texas.
C)   is determined by competitive market forces.
D)   is higher than in the big cities in Texas.
E)   produces a surplus of gasoline.

Question 17

Describe,in detail,each of the following characteristics of a highly competitive firm and explain why each characteristic is important:
a.many buyers and many sellers;
b.similar products;
c.and no barriers to entry or exit.

Accepted Answer

a.Many buyers and many sellers imply tha...

Question 18

Refer to the accompanying table, which represents the costs and production for a monopolist, to answer the questions that follow.
 
-As production increases,the price consumers are willing to pay for the good:

Accepted Answer

A)   increases and then decreases.
B)   decreases and then increases.
C)   stays the same.
D)   increases.
E)   decreases.

Question 19

Many economists believe that the market for wheat in the United States is an almost perfectly competitive market.If one firm discovers a technology that makes its wheat taste better and have fewer calories than all other wheat offered in the market,the wheat market would become less competitive because:

Accepted Answer

A)   there would no longer be many buyers and many sellers of wheat.
B)   it would no longer be easy to enter and exit the existing wheat market.
C)   the products would no longer be similar in the wheat market.
D)   the government would want to intervene.
E)   individuals would not want to switch products.

Question 20

Which of the following market structures describes an industry in which all firms produce differentiated output and there are few barriers to entry?

Accepted Answer

A)   perfect competition
B)   monopoly
C)   oligopoly
D)   a cartel
E)   monopolistic competition

Exam 6: Market Structures

When a town has a single cable provider:

Correct Answer
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Monopolies result in a(n) level of output and provide choice to consumers.

Correct Answer
verified

In the soda industry,production costs per unit continue to fall as the firm expands.In this type of industry,smaller rivals trying to enter the industry:

Correct Answer
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Correct Answer
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Refer to the accompanying figure.A firm would produce in the long run only if the market price is:

Correct Answer
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You can tell a firm is operating in a market that is in long-run competitive equilibrium if:

Correct Answer
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Answer the following questions based on the accompanying graph. a.What are the profit-maximizing price and quantity? b.At the profit-maximizing price and quantity, what are the total profits or losses made by this firm?

Correct Answer
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a.The profit-maximizing price and quanti...
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Correct Answer
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By controlling the number of licenses th...
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If Firm A is making zero economic profits:

Correct Answer
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Refer to the accompanying set of graphs to answer the questions that follow. -Which graph would result in firms entering a perfectly competitive market in the long run?

Correct Answer
verified

Inefficient output and price,few choices,and rent seeking are all problems associated with:

Correct Answer
verified

Which of the following market structures describes an industry in which all firms produce differentiated output and there are few barriers to entry?

Correct Answer
verified

Rent seeking:

Correct Answer
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Holding all else constant,an increase in the market demand for a product in a competitive market would cause:

Correct Answer
verified

When resources are used to secure monopoly rights through the political process:

Correct Answer
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Willow Park is a small community in Texas with only one gas station.The price of gasoline in Willow Park most likely:

Correct Answer
verified

Refer to the accompanying table, which represents the costs and production for a monopolist, to answer the questions that follow. -As production increases,the price consumers are willing to pay for the good:

Correct Answer
verified

Describe,in detail,each of the following characteristics of a highly competitive firm and explain why each characteristic is important: a.many buyers and many sellers; b.similar products; c.and no barriers to entry or exit.

Correct Answer
verified
a.Many buyers and many sellers imply tha...
View Answer

When firms enter a market,the ,causing individual firms' profits to .

Correct Answer
verified

Which of the following is a characteristic of a monopoly but not a characteristic of a competitive market?

Correct Answer
verified

Exam 6: Market Structures

When a town has a single cable provider:

Correct AnswerverifiedShow Answer

Monopolies result in a(n) ________ level of output and provide ________ choice to consumers.

Correct AnswerverifiedShow Answer

In the soda industry,production costs per unit continue to fall as the firm expands.In this type of industry,smaller rivals trying to enter the industry:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Refer to the accompanying figure.A firm would produce in the long run only if the market price is:

Correct AnswerverifiedShow Answer

You can tell a firm is operating in a market that is in long-run competitive equilibrium if:

Correct AnswerverifiedShow Answer

Answer the following questions based on the accompanying graph. a.What are the profit-maximizing price and quantity? b.At the profit-maximizing price and quantity, what are the total profits or losses made by this firm?

Correct Answerverifieda.The profit-maximizing price and quanti...View AnswerShow Answer

Correct AnswerverifiedBy controlling the number of licenses th...View AnswerShow Answer

If Firm A is making zero economic profits:

Correct AnswerverifiedShow Answer

Refer to the accompanying set of graphs to answer the questions that follow. -Which graph would result in firms entering a perfectly competitive market in the long run?

Correct AnswerverifiedShow Answer

Inefficient output and price,few choices,and rent seeking are all problems associated with:

Correct AnswerverifiedShow Answer

Which of the following market structures describes an industry in which all firms produce differentiated output and there are few barriers to entry?

Correct AnswerverifiedShow Answer

Rent seeking:

Correct AnswerverifiedShow Answer

Holding all else constant,an increase in the market demand for a product in a competitive market would cause:

Correct AnswerverifiedShow Answer

When resources are used to secure monopoly rights through the political process:

Correct AnswerverifiedShow Answer

Willow Park is a small community in Texas with only one gas station.The price of gasoline in Willow Park most likely:

Correct AnswerverifiedShow Answer

Refer to the accompanying table, which represents the costs and production for a monopolist, to answer the questions that follow. -As production increases,the price consumers are willing to pay for the good:

Correct AnswerverifiedShow Answer

Describe,in detail,each of the following characteristics of a highly competitive firm and explain why each characteristic is important: a.many buyers and many sellers; b.similar products; c.and no barriers to entry or exit.

Correct Answerverifieda.Many buyers and many sellers imply tha...View AnswerShow Answer

When firms enter a market,the ________,causing individual firms' profits to ________.

Correct AnswerverifiedShow Answer

Which of the following is a characteristic of a monopoly but not a characteristic of a competitive market?

Correct AnswerverifiedShow Answer

Correct Answer
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Monopolies result in a(n) level of output and provide choice to consumers.

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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a.The profit-maximizing price and quanti...
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By controlling the number of licenses th...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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a.Many buyers and many sellers imply tha...
View Answer

When firms enter a market,the ,causing individual firms' profits to .

Correct Answer
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Correct Answer
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