ECO 204 Week 4 Quiz

1. Question : When P = AR = MR = AC = MC, Student Answer: economic profits are positive. economic profits are zero. economic profits are negative. normal profits are zero. normal profits are negative. Points Received: 1 of 1 Comments: Question 2. Question : At the other end of the market continuum from perfect competition is Student Answer: the corporation. oligopoly. the partnership. monopsony. monopoly. Points Received: 1 of 1 Comments: Question 3. Question : If a monopoly firm observes an increase in total revenue following a price increase, which of the following must be true? Student Answer: MR > 0 MR < 0 MR = 0 MR = TR Points Received: 0 of 1 Comments: Question 4. Question : Perfect competition is Student Answer: not an abstraction from reality; it is reality. an "ideal type"—that is, a model or guidepost for comparison. the only market structure in the United States. the best of all possible worlds. found in the U.S. steel industry. Points Received: 1 of 1 Comments: Question 5. Question : A monopolist will have a marginal revenue curve that is Student Answer: identical to the demand curve. identical to the marginal cost curve. below the demand curve. above the marginal cost curve. Points Received: 1 of 1 Comments: Question 6. Question : Retail outlets operate in which of the following market structures? Student Answer: perfect competition monopolistic competition oligopoly monopoly oligopsony Points Received: 1 of 1 Comments: Question 7. Question : In a perfectly competitive industry, if TR > TC, then in the long run Student Answer: firms will exit the industry. new firms will enter the industry. there will be no change in the number of firms. market supply will shift to the left. firms will make economic profits. Points Received: 1 of 1 Comments: Question 8. Question : At the point of long-run equilibrium for a perfectly competitive firm, Student Answer: economic profits are zero. TR > TC. TR < TC. P = AVC. normal profits are zero. Points Received: 1 of 1 Comments: Question 9. Question : A monopolist will try to operate Student Answer: where marginal cost equals marginal revenue. in the inelastic range of the demand curve. where average revenue equals marginal revenue. at the highest price on the demand curve. Points Received: 0 of 1 Comments: Question 10. Question : Which of the following is NOT an essential characteristic of monopolistic competition? Student Answer: a small number of sellers differentiated products relatively easy entry short-run profits a very elastic demand curve