ECON 201 Week 7 Quiz

ECON 201 Week 7 Quiz | american-public-university-system

Quiz Submissions - Week 7 Quiz (Chapter 11)

Question 1                         

Monopolistic competition is an industry characterized by a:

·         small number of firms producing identical products, with barriers to entry for firms.

·         small number of firms producing similar products, with relatively easy entry for firms.

·         large number of firms producing similar products, with relatively easy entry for firms.

·         large number of firms producing identical products, with relatively easy entry for firms.

Question 2                         

Imperfect competition is:

·         a market structure with no more than one firm in the industry.

·         an industry in which all firms are price takers.

·         a market structure where firms have a degree of monopoly power.

·         described by all of the above.

Question 3                         

Imperfect competition includes:

·         monopolistic competition and oligopoly.

·         monopolistic competition and monopoly.

·         perfect competition and monopoly.

·         monopoly and oligopoly.

Question 4                         

A firm in monopolistic competition maximizes its profit by producing at the level at which:

·         MC = ATC.

·         MC = AR.

·         MC = P.

·         MC = MR.

Question 5                         

An industry characterized by many firms, producing similar but differentiated products, in a market with easy entry and exit is called:

·         perfect competition.

·         monopoly.

·         monopolistic competition.

·         oligopoly.

Question 6                         

An oligopoly knows that its _______ affect(s) its _______ and that the _______ of its rivals will affect it.

·         actions; rivals; reactions

·         price changes ; total revenue in a positive way; reactions

·         actions rarely; rivals; actions

·         price increases; total revenue in the long run only; large but not small price changes

Question 7                         

A concentration ratio is used to measure:

·         efficiency.

·         diseconomies of scale.

·         marginal cost.

·         market dominance.

Question 8                         

An industry dominated by a few firms, where each of those firms recognizes that its own choices will affect the choices of its rivals and that its rivals' choices will affect it, is a(n):

·         monopoly.

·         oligopoly.

·         monopolistic competition.

·         perfect competition.

Question 9                         

Price for a firm under monopolistic competition is:

·         equal to marginal revenue.

·         greater than marginal revenue.

·         less than marginal revenue.

·         greater than total revenue.

Question 10                      

Unwritten or unspoken understandings through which firms collude to restrict competition are called:

·         cartelization.

·         oligopolization.

·         overt collusion.

·         tacit collusion.

·         Profit Maximization for a Firm in Monopolistic Competition

Question 11                      

(Exhibit: Profit Maximization for a Firm in Monopolistic Competition) Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC' Before the innovation reduced the cost, the firm's maximum economic profit was:

·         $0.

·         $30.

·         $750.

·         $4,500.

Question 12                      

(Exhibit: Profit Maximization for a Firm in Monopolistic Competition.) Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC' After the innovation reduced the cost, the firm's maximum economic profit is:

·         $0.

·         $30.

·         $1,500.

·         $3,000.

Question 13                      

(Exhibit: Profit Maximization for a Firm in Monopolistic Competition) Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC' Suppose further that after the innovation reduced the cost to ATC?, it costs a total of $18 per unit to produce 170 units per day. If the firm charges a price equal to marginal cost, total net profit will be:

·         $1,700.

·         $1,190.

·         $3,060.

·         $3,400.