question
Which of the following is true for a perfectly competitive industry?
answer
The firms in the industry produce a standardized product
question
Which of the following is true for a monopoly?
answer
It consists of only one firm
question
Which of the following is true for the oligopoly?
answer
There is a small number of interdependent firms
question
Which of the following is true for a monopolistically competitive industry?
answer
There are many firms, each with a small market share
question
Which of the following is an example of differentiated products?
answer
Coca-Cola and pepsi
question
Which two market structures are normally characterized by free entry and exit in the long run?
answer
perfect competition and monopolistic competition
question
Economies of scale are the defining characteristic of which market structure?
answer
natural monopoly
question
In a long run
answer
all inputs are variables
question
Which of the following is always considered the long run?
answer
none of the above
question
which of the following statements is generally correct?
answer
the long-run average total cost curve is U-shaped
question
When making decisions which of the following costs should be ignored?
answer
sunk costs
question
There is a different short-run average total cost curve for each level of
answer
fixed cost
question
if the long-run average total cast decreases as the quantity of output increases the firm is necessarily experiencing
answer
economies of scale
question
When the current amount of fixed cost minimizes the long-run average total cost for the quantity of output being produced the short-run average total cost curve is necessarily
answer
touching the long-run average total cost curve
question
When a firm is producing zero output the total cost equals
answer
the fixed cost
question
Marginal cost can be found at the change in either of which two types if cost when output increases by one?
answer
variable cost or total cost
question
Which of the following is correct about costs?
answer
AVC = ATC - AFC
question
The slope of the total cost curve equals
answer
marginal cost
question
On the basis of the data in the table below what is the marginal cost of the third unit of output
answer
$40
question
Which of the following always decreases when the quantity of output increases?
answer
average fixed cost
question
if labor is the only variable input and the wage rate is fixed which of the following move in opposite directions each time the quantity of output increases?
answer
margina; cost and marginal product of labor
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