Economics - Profit Maximizing Under Perfect Competition And Monopoly
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Question 1 of 60
1. Question
Profit-maximising firms want to maximize the difference between:
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Question 2 of 60
2. Question
Which statement is False?
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Question 3 of 60
3. Question
Which of the following is most likely to be a variable cost for a firm?
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Question 4 of 60
4. Question
The costs that depend on output in the short run are:
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Question 5 of 60
5. Question
The short run, as economists use the phrase, in characterised by:
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Question 6 of 60
6. Question
Diminishing marginal return implies:
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Question 7 of 60
7. Question
Which of the following is a correct statement about the relationship between average product (AP) and marginal product (MP)?
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Question 8 of 60
8. Question
If the total product of two workers is 80 and the total product of 3 workers is 90 then the average product of the third worker is ____ and the marginal product of the third worker is ______.
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Question 9 of 60
9. Question
Engineers for the All-Terrain Bike Company have determined that a 15% increase in all inputs will cause a 15% increase in output Assuming that input prices remain constant, you correctly deduce that such a change will cause _____ as output increases.
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Question 10 of 60
10. Question
Suppose Handel’s Ice Cream experiences economies of scale up to a certain point and diseconomies of scale beyond that point. Its long-run average cost curve is most likely to be:
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Question 11 of 60
11. Question
Most empirical studies show that firm’s cost curves:
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Question 12 of 60
12. Question
A graph showing all the combinations of capital and labour that can used to produce a given amount of output is:
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Question 13 of 60
13. Question
The rate at which a firm can substitute capital for labour and hold output constant is the:
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Question 14 of 60
14. Question
A graph showing all the combinations capital and labour available for a given total cost is the:
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Question 15 of 60
15. Question
The formula for average fixed costs is:
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Question 16 of 60
16. Question
The formula for average variable cost (AVC) is:
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Question 17 of 60
17. Question
Marginal revenue is:
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Question 18 of 60
18. Question
A firm in perfectly competitive industry is producing 50 units, its profit-maximising quantity. Industry price is £2 and total fixed costs and total variable cost are £25 and £40 respectively. The firm’s economic profit is:
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Question 19 of 60
19. Question
Maximum profit can be shown on a diagram using:
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Question 20 of 60
20. Question
A firm will shut down in the short run if:
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Question 21 of 60
21. Question
If you were running a firm in a perfectly competitive industry, you would be spending your time making decisions on:
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Question 22 of 60
22. Question
Market power is:
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Question 23 of 60
23. Question
When ____ substitutes exist, a monoplist has ____ power to raise price.
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Question 24 of 60
24. Question
If a firm has some degree of market power, then output price.
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Question 25 of 60
25. Question
Relative to a competitively organised industry a monopoly
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Question 26 of 60
26. Question
The cosmetics industry is not considered by economists to be a good example of perfect competition because:
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Question 27 of 60
27. Question
The short run, as economists use the phrase, is characterized by:
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Question 28 of 60
28. Question
If firms can neither enter nor leaves an industry, the relevant time period is the:
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Question 29 of 60
29. Question
In the long run:
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Question 30 of 60
30. Question
A normal rate of profit:
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Question 31 of 60
31. Question
If the ABC Typing Service is earning a rate of return greater than the return necessary for the business to continue operations, then:
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Question 32 of 60
32. Question
Economic profits are:
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Question 33 of 60
33. Question
The normal rate of profit for relatively risk-free firms will be ____ the interest rate on risk-free government bonds.
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Question 34 of 60
34. Question
The slope of marginal revenue curve is:
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Question 35 of 60
35. Question
In a monopoly, marginal revenue is:
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Question 36 of 60
36. Question
Suppose we know that a monopolist is maximising its profits. Which of the following is a correct inference? the monopolist has
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Question 37 of 60
37. Question
An industry that realises such large economies of scale in producing its product that single-firm production of that good or service is most efficient is called:
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Question 38 of 60
38. Question
Form society’s point of view, society would be better off if a monopolist
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Question 39 of 60
39. Question
A market is defined as perfectly contestable if:
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Question 40 of 60
40. Question
In contestable markets, large oligopolistic firms, end up behaving like:
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Question 41 of 60
41. Question
Monopolistic competition differs from perfect competition primarily because:
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Question 42 of 60
42. Question
In monopolistic competition firms achieve some degree of market power.
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Question 43 of 60
43. Question
A monopolistically competitive firm that is incurring a loss will produce as long as the price that the firm charges is sufficient to cover.
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Question 44 of 60
44. Question
A firm in a monopolistically competitive industry:
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Question 45 of 60
45. Question
The long-run equilibrium outcomes in monopolistic competition and perfect competition are similar because in both market structures:
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Question 46 of 60
46. Question
Which of the following statements best describes the outcome under monopolistic competition?
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Question 47 of 60
47. Question
Which of the following statements best describes the outcome under monopolistic competition?
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Question 48 of 60
48. Question
A form of industry structure characterised by a few firms, each large enough to influence market price is:
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Question 49 of 60
49. Question
When one firm in the breakfast cereal market started an advertising campaign that stressed the nutritional value of its cereals, all other cereal manufacturers started similar advertising campaign This suggests that the breakfast cereal market is:
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Question 50 of 60
50. Question
An industry that has a relatively small number of firms that dominate the market is called:
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Question 51 of 60
51. Question
Assume that firms in an oligopoly are currently colluding to set price and output to maximise total industry profit. If the oligopolists are forced to stop colluding, the price charged by the oligopolists will ____ and the total output produced will _____
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Question 52 of 60
52. Question
A price- and quantity-fixing agreement is known as:
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Question 53 of 60
53. Question
A group of firms that gets together to make price and output decisions is called:
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Question 54 of 60
54. Question
In which of the following circumstances would a cartel be most likely to work?
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Question 55 of 60
55. Question
An oligopoly with a dominant price leader will produce a level of output:
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Question 56 of 60
56. Question
The kinked demand curve model of oligopoly assumes the elasticity of demand:
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Question 57 of 60
57. Question
A major weakness of the kinked demand curve model of oligopoly is that:
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Question 58 of 60
58. Question
A market is defined as perfectly contestable if:
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Question 59 of 60
59. Question
Which of the following statements is False?
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Question 60 of 60
60. Question
In contestable markets large oligopolistic firms end up behaving like:
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