pb830484 1 by y17S3U5


									1. (TCO 3) Which market model assumes the least number of firms in an industry? (Points : 3)

        Monopolistic competition

        Pure competition

        Pure monopoly


 0                1624511575       MultipleChoice   1

2. (TCO 3) Under which market model are the conditions of entry into the market easiest? (Points : 3)

        Pure competition

        Pure monopoly

        Monopolistic competition


 0                1624511576       MultipleChoice   5

3. (TCO 3) The steel and automobile industries would be examples of which market model? (Points : 3)

        Monopolistic competition

        Pure competition

        Pure monopoly


4. (TCO 3) Sam owns a firm that produces tomatoes in a purely competitive market. The firm's demand curve
is (Points : 3)

        a vertical line.

        a horizontal line.

        upward-sloping to the right.

        downward-sloping to the right.

 0                1624511578       MultipleChoice   12

5. (TCO 3) T-Shirt Enterprises is selling in a purely competitive market. It is producing 3,000 units, selling them
for $2 each. At this level of output, the average total cost is $2.50 and the average variable cost is
$2.20. Based on these data, the firm should (Points : 3)

        shut down in the short run.

        decrease output to 2,500 units.

        ontinue to produce 3,000 units.

        increase output to 3,500 units.

6. (TCO 3) A firm should always continue to operate at a loss in the short run if (Points : 3)

        the firm will show a profit.

        the owner enjoys helping her customers.

        it can cover its variable costs and some of its fixed costs.

        the firm cannot produce any other products more profitably.

 0                1624511580           MultipleChoice   16

7. (TCO 3) In pure competition, price is determined where the industry (Points : 3)

        demand and supply curves intersect.

        total cost is greater than total revenue.

        demand intersects the individual firm's marginal cost curve.

        average total cost equals total variable costs.

 0                1624511581           MultipleChoice   20

8. (TCO 3) One feature of pure monopoly is that the monopolist is (Points : 3)

        a producer of products with close substitutes.

        one of several producers of a product.

        a price taker.

        a price maker.

 0                1624511582           MultipleChoice   22

9. (TCO 3) Barriers to entry (Points : 3)

        usually result in pure competition.

        can result from government regulation.

        exist in economic theory but not in the real world.

        are typically the result of wrongdoing on the part of a firm.

 0                1624511583           MultipleChoice   25

10. (TCO 3) One feature of pure monopoly is that the demand curve (Points : 3)

        is vertical.

        is horizontal.

        slopes upward.

        slopes downward.

 0                  1624511584     MultipleChoice    28

11. (TCO 3) Which is the best example of price discrimination? (Points : 3)

        An airline company charging lower fares per pound for air freight than for passengers.

        A telephone company charging lower rates to weekend users than weekday users.

        A supermarket charging lower prices in its inner city store than its out-of-town store.

         A private doctor charging higher fees to patients receiving special services than patients receiving
regular services.

 0                  1624511585     MultipleChoice    32

12. (TCO 3) In which industry is monopolistic competition most likely to be found? (Points : 3)



        Retail trade


 0                  1624511586     MultipleChoice    36

13. (TCO 3) Assume that in a monopolistically competitive industry, firms are earning economic profit. This
situation will (Points : 3)

        reduce the excess capacity in the industry as firms expand production.

        attract other firms to enter the industry, causing the firm's profits to shrink.

        cause firms to standardize their product to limit the degree of competition.

        make the industry allocatively efficient as each firm seeks to maintain its profits.

 0                  1624511587     MultipleChoice    38

14. (TCO 3) In an oligopolistic market there are (Points : 3)

        many buyers.

        few buyers.

        few sellers.

        many sellers.

 0                  1624511588     MultipleChoice    40

15. (TCO 3) A high concentration ratio indicates that (Points : 3)

        the industry is highly profitable.

         the industry is highly competitive.

         many firms produce most of the output in an industry.

         few firms produce most of the output in an industry.

 0                  1624511589      MultipleChoice    43

16. (TCO 3) A major reason that firms form a cartel is to (Points : 3)

         reduce the elasticity of demand for the product.

         enlarge the market share for each producer.

         minimize the costs of production.

         maximize joint profits.

 0                  1624511590      MultipleChoice    47

17. (TCO 1) The four factors of production are (Points : 3)

         land, labor, capital, and money.

         land, labor, capital, and entrepreneurial ability.

         labor, capital, technology, and entrepreneurial ability.

         labor, capital, entrepreneurial ability, and money.

 0                  1624511591      MultipleChoice    49

18. (TCO 1) Refer to the diagram which is based on the Circular Flow Model in Chapter 2. Arrows (3) and (4)

Graph Description

(Points : 3)

         goods and services, respectively.

         incomes and consumer expenditures, respectively.

         resources and goods, respectively.

         consumer expenditures and income, respectively.

 0                  1624511592    MultipleChoice   53

19. (TCO 2) Refer to the diagram. A decrease in quantity demanded is depicted by a

Graph Description

(Points : 3)

         move from Point x to Point y.

         shift from D1 to D2.

         shift from D2 to D1.

         move from Point y to Point x.

 0                  1624511593    MultipleChoice   56

20. (TCO 2) Refer to the information and assume the stadium capacity is 5,000. If the Mudhens' management
wanted a full house for the game, it would

Price per Ticket Quantity Demanded
         $13                     1,000
          11                     2,000
           9                     3,000
           7                     4,000
           5                     5,000
           3                     6,000
(Points : 3)

         set price so as to maximize its total revenue.

         encourage scalpers to sell their tickets for more than $7.

         set ticket prices at $5.

         set ticket prices at $9.

 0                  1624511594      MultipleChoice   58

21. (TCO 2) Which of the following goods will least likely suffer a decline in demand during a recession? (Points
: 3)

         Dinner at a nice restaurant



         Plasma-screen and LCD TVs

 0                  1624511595      MultipleChoice   62

22. (TCO 3) In the figure, Curves 1, 2, 3, and 4 represent the

Graph Description

(Points : 3)

         ATC, MC, AFC, and AVC curves, respectively.

         MC, AFC, AVC, and ATC curves, respectively.

         MC, ATC, AVC, and AFC curves, respectively.

         ATC, AVC, AFC, and MC curves, respectively.

 0                  1624511596     MultipleChoice   64

23. (TCO 1) Refer to the diagram. Points A, B, C, D, and E show

Graph Description

(Points : 3)

         that the opportunity cost of bicycles increases, while that of computers is constant.

         combinations of bicycles and computers that society can produce by using its resources efficiently.

         that the opportunity cost of computers increases, while that of bicycles is constant.

         that society's demand for computers is greater than its demand for bicycles.

 0                  1624511597     MultipleChoice   67

24. (TCO 3) What type of barrier to entry was used by De Beers throughout much of its history to maintain its
monopoly position? (Points : 3)

         Patent protection

         Government regulation

         Economies of scale

         Ownership of an essential resource

0   1624511600   Essay   4


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