Unit 3 Micro Test - Assignment Essays

question

The law of diminishing returns indicates that

answer

beyond some point the extra utility derived from additional units of a product will yield the consumer smaller and smaller extra amounts of satisfaction

question

Marginal cost

answer

equals both average variable cost and average total cost at their respective minimums

question

A fixed cost is

answer

any cost which a firm would incur even if output was zero

question

A firm's total variable cost will depend on

answer

all of the above (the prices of variable resources, the level of output, the production techniques that are used)

question

Which of the following industries most closely approximates pure competition?

answer

Agriculture

question

A pure monopolist is

answer

a one-firm industry

question

In which of the following industry structures is the entry of new firms the most difficult?

answer

Pure monopoly

question

Which of the following is correct?

answer

A purely competitive firm is a "price taker," while a monopolist is a "price maker."

question

Which of the following is a characteristic of pure monopoly?

answer

Barriers to entry

question

Which of the following is not a basic characteristic of monopolistic competition?

answer

recognized mutual interdependence

question

If the number of firms in a monopolistically competitive industry increases and the degree of product differentiation diminishes

answer

the industry would more closely approximate pure competition

question

The demand curve in a purely competitive industry is ______________, while the demand curve to a single firm in that industry is ____________.

answer

Downsloping, perfectly elastic

question

When a firm is maximizing profit it will necessarily be

answer

maximizing the difference between total revenue and total cost

question

A monopolistically competitive firm's marginal revenue curve

answer

is downsloping and lies below the demand curve

question

In the long-run equilibrium, the price charged by the monopolistically competitive firm

answer

will be equal to ATC

question

Refer to the above data. Total fixed cost is

answer

$50

question

Refer to the above data. The average total cost of five units of output is

answer

$69

question

Refer to the above data. If the firm closed down and produced zero units of output, its total cost would be

answer

$50

question

Refer to the above data. If the market price for the firm's product is $32, the competitive firm will produce

answer

8 units at an economic profit of $16

question

Refer to the above data. If the market price for the firm's product is $28, the competitive firm will

answer

produce 7 units at a loss of $14

question

Refer to the above diagram. To maximize profits or minimize losses this firm should produce

answer

E units and charge price A

question

In equilibrium which of the following conditions are common to both unregulated monopoly and to pure competition?

answer

MR=MC

question

Refer to the above diagram for a pure monopolist. Monopoly price will be

answer

question

Refer to the above diagram for a pure monopolist. Monopoly profit

answer

cannot be determined from the information given

question

The purely competitive market model is portrayed in the above figures by

answer

Figure B

question

Refer to the above figures. We would expect industry entry and exit to be relatively easy in

answer

both Figures B and D

question

Refer to the above figures. Both allocative and productive efficiency are being realized in

answer

Figure B only

1 of 27

question

The law of diminishing returns indicates that

answer

beyond some point the extra utility derived from additional units of a product will yield the consumer smaller and smaller extra amounts of satisfaction

question

Marginal cost

answer

equals both average variable cost and average total cost at their respective minimums

question

A fixed cost is

answer

any cost which a firm would incur even if output was zero

question

A firm's total variable cost will depend on

answer

all of the above (the prices of variable resources, the level of output, the production techniques that are used)

question

Which of the following industries most closely approximates pure competition?

answer

Agriculture

question

A pure monopolist is

answer

a one-firm industry

question

In which of the following industry structures is the entry of new firms the most difficult?

answer

Pure monopoly

question

Which of the following is correct?

answer

A purely competitive firm is a "price taker," while a monopolist is a "price maker."

question

Which of the following is a characteristic of pure monopoly?

answer

Barriers to entry

question

Which of the following is not a basic characteristic of monopolistic competition?

answer

recognized mutual interdependence

question

If the number of firms in a monopolistically competitive industry increases and the degree of product differentiation diminishes

answer

the industry would more closely approximate pure competition

question

The demand curve in a purely competitive industry is ______________, while the demand curve to a single firm in that industry is ____________.

answer

Downsloping, perfectly elastic

question

When a firm is maximizing profit it will necessarily be

answer

maximizing the difference between total revenue and total cost

question

A monopolistically competitive firm's marginal revenue curve

answer

is downsloping and lies below the demand curve

question

In the long-run equilibrium, the price charged by the monopolistically competitive firm

answer

will be equal to ATC

question

Refer to the above data. Total fixed cost is

answer

$50

question

Refer to the above data. The average total cost of five units of output is

answer

$69

question

Refer to the above data. If the firm closed down and produced zero units of output, its total cost would be

answer

$50

question

Refer to the above data. If the market price for the firm's product is $32, the competitive firm will produce

answer

8 units at an economic profit of $16

question

Refer to the above data. If the market price for the firm's product is $28, the competitive firm will

answer

produce 7 units at a loss of $14

question

Refer to the above diagram. To maximize profits or minimize losses this firm should produce

answer

E units and charge price A

question

In equilibrium which of the following conditions are common to both unregulated monopoly and to pure competition?

answer

MR=MC

question

Refer to the above diagram for a pure monopolist. Monopoly price will be

answer

question

Refer to the above diagram for a pure monopolist. Monopoly profit

answer

cannot be determined from the information given

question

The purely competitive market model is portrayed in the above figures by

answer

Figure B

question

Refer to the above figures. We would expect industry entry and exit to be relatively easy in

answer

both Figures B and D

question

Refer to the above figures. Both allocative and productive efficiency are being realized in

answer

Figure B only

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