50. The long-run average cost curve is tangent to an infinite number of ______. (Points: 3)
total cost curves
marginal cost curves
average variable cost curves I picked
average total cost curves

51. The assumptions of perfect competition imply that ______. (Points: 3)
individuals in the market accept the market price as given I picked
individuals can influence the market price
the price will be a fair price
the price will be low

52. Individuals in a market who must take the market price as given are ______. (Points: 3)
quantity minimizers
quantity takers I picked
price takers
price searchers

53. Perfect competition is characterized by ______. (Points: 3)
rivalry in advertising
fierce quality competition
the inability of any one firm to influence price I picked
widely recognized brands

54. Marginal revenue ______. (Points: 3)
is the slope of the average revenue curve
equals the market price in perfect competition I picked
is the change in quantity divided by the change in total revenue
is the price divided by the changes in quantity

55. If a perfectly competitive firm sells 30 units of output at a price of $10 per unit, its marginal revenue is ______. (Points: 3)
$10 I picked
more than $10
less than $10

56. For a firm producing at any level of output less than the most profitable one, an increase in output adds ______. (Points: 3)
more to total cost than to total revenue
more to total revenue than to total cost I picked
the same amount to total revenue as to total cost
to total revenue but not to total cost

57. When economic profits in an industry are zero ______. (Points: 3)
firms are really doing badly
it means that firms are doing as well as they could do in other markets
firms should exit, so they can make an economic profit in some other market I picked
the industry is not in long-run equilibrium

58. When a perfectly competitive firm is in long-run equilibrium, the firm is _____. (Points: 3)
producing at maximum average total cost
producing at maximum average variable cost
producing at minimum marginal cost
producing at minimum long-run average total cost I picked

59. A curve that shows the quantity of a good or service supplied at various prices after all long-run adjustments to a price change have been completed is a long-run ______. (Points: 3)
marginal revenue curve
marginal cost curve
industry supply curve I picked
production curve

60. Economists identify the satisfaction a person derives from the consumption of goods and services as ______. (Points: 3)
utility I picked

61. When total utility is at a maximum, marginal utility is ______. (Points: 3)
at its average value
at a maximum
zero I picked

62. The principle of diminishing marginal utility ______. (Points: 3)
refers to the tendency of total utility to increase until an individual's budget is no longer constrained I picked
refers to the tendency of marginal utility to decline beyond some level of consumption during a period
indicates that, if a good is inferior, less of it will be purchased when income falls during a period
assumes all goods are normal

63. Whatever the time period involved, a consumer's spending will be _______ by his or her _______. (Points: 3)
unlimited; marginal utility
limited; marginal utility
limited; budget I picked
unlimited; budget

64. If a consumer purchases a combination of commodities X and Y such that MUx/Px = 20 and MUy/Py = 10, to maximize utility, consumers should buy ______. (Points: 3)
less of X and more of Y
more of X and less of Y I picked
more of both X and Y
less of both X and Y

65. If a consumer derives more utility by spending an additional $1 on good X rather than on good Y, then ______. (Points: 3)
MUx/Px > MUy/Py I picked
MUx/Px = MUy/Py
MUx/Px < MUy/Py
Px/MUx > Py/MUy

66. Assume that a person is consuming the utility-maximizing quantities of pork and chicken. We can conclude that ______. (Points: 3)
the price of pork equals the price of chicken
the marginal utility of pork equals the marginal utility of chicken
the ratio of the marginal utility to price is the same for pork and for chicken
both A and B are true I picked

67. Market demand is found by ______. (Points: 3)
adding individual quantities demanded at each price I picked
adding individual prices at each quantity demanded
multiplying individual quantities demanded at each price
multiplying individual prices at each quantity demanded

68. A monopoly is a market characterized by a ______. (Points: 3)
product with no close substitutes I picked
single buyer and several sellers
large number of small firms
small number of large firms

69. Conditions that prevent the entry of new firms in a monopoly market are ______. (Points: 3)
barriers to entry I picked
terms of sale
labor market stipulations
production controls

70. The demand curve for a monopoly is ______. (Points: 3)
the sum of all the firm supply curves in the monopoly's industry
the industry demand curve I picked
horizontal because no one can enter
perfectly elastic

71. In a monopoly in the long run ______. (Points: 3)
economic profits will be eliminated by the entry of rival firms
economic profits will be reduced, but not eliminated entirely, by the entry of rival firms
entry will not occur I picked
none of the above is true

72. In monopoly _______. (Points: 3)
because P > MC, a basic condition for efficiency is violated
consumers are confronted with a price that is lower than marginal cost I picked
consumers will consume more of the good than is economically efficient
all of the above are true

73. Public policies toward monopoly in the United States consists of _______. (Points: 3)
laws outlawing all of them
regulation of natural monopolies I picked
government takeover if monopoly profit exceeds a certain level
forcing monopoly industries to become perfectly competitive

74. A monopolist or an imperfectly competitive firm practices price discrimination primarily to ______. (Points: 3)
increase profits I picked
expand plant size
lower total costs
reduce marginal costs

75. To practice effective price discrimination, a monopolist must be able to ______. (Points: 3)
estimate its own production and cost functions
avoid detection by government regulatory agencies
prevent the resale of goods among groups of buyers
calculate the utility level of each buyer in the market I picked

76. Oligopoly is a market structure characterized by ______. (Points: 3)
independence in decision making
uncertainty about the behavior of rival firms
substantial diseconomies of scale
a large number of small firms I picked

77. A way to measure the degree of concentration in oligopoly is to use ______. (Points: 3)
an elasticity ratio
a demand ratio
the percentage of sales accounted for by the four largest firms in the industry I picked
the ratio of MC to ATC

78. An industry with two firms is generally termed ______. (Points: 3)
monopolistic competition
duopoly I picked
perfect competition

79. If the only two firms in an industry agree to fix the price at a given level, this is an example of ______. (Points: 3)
collusion I picked
price extortion
price leadership

80. A cartel is an example of ______. (Points: 3)
price extortion
price leadership
overt collusion I picked
tacit collusion

81. The outcome of a strategic choice is a ______. (Points: 3)
payoff I picked

82. Unwritten or unspoken understandings through which firms collude to restrict competition are called ______. (Points: 3)
overt collusion
tacit collusion I picked

83. In large shopping areas, the retail market is most illustrative of ______. (Points: 3)
monopolistic competition I picked
perfect competition
perfect oligopoly

84. A feature of monopolistic competition that makes it different from monopoly is the ______. (Points: 3)
fact that firms in the model of monopolistic competition follow the marginal decision rule while monopolies do not
downward-sloping demand curve I picked
downward-sloping marginal revenue curve
number of firms in the industry

85. The demand curve for a firm under monopolistic competition is ______. (Points: 3)
upward sloping
downward sloping I picked

86. A firm in monopolistic competition maximizes its profit by producing at the level at which ______. (Points: 3)
MC = MR I picked
MC = P

87. Product differentiation under monopolistic competition means that each firm ______. (Points: 3)
charges slightly different prices I picked
has a pure monopoly
maximizes profit where MC = P
faces a horizontal demand curve

88. Because monopolistically competitive firms charge a P > MC ______. (Points: 3)
monopolistic competition is efficient
monopolistic competition is inefficient
the marginal benefit to society of an additional unit of output is below its cost
B and C are true I picked

89. Defenders of advertising argue that it _______. (Points: 3)
seeks to persuade, rather than inform, buyers
provides education and information about products I picked
facilitates the concentration of monopoly power
encourages artificial product differentiation

90. If an activity generates external costs, decision makers generating the activity will ______. (Points: 3)
be faced with its full costs
be faced with no costs
not be faced with its full costs I picked
be faced with excessive costs

91. An industry with external costs produces ______. (Points: 3)
a quantity of output that is the socially optimal quantity
a smaller quantity of output than the socially optimal quantity
a larger quantity of output than the socially optimal quantity I picked
the socially optimal quantity if a specific subsidy is given to buyers

92. When individuals take external costs and benefits into account ______. (Points: 3)
there are no external costs
they internalize the externality I picked
the government needs to intervene in the market
the market will not reach an efficient solution

93. Which of the following is usually associated with a positive externality? (Points: 3)
smoking cigarettes
purchasing a new CD
innovation in the I picked
semiconductor industry
all of the above

94. A tax system _______ when it minimizes the direct and indirect costs to the economy of tax collection. (Points: 3)
is efficient
is equitable
has no deadweight loss
is both A and B I picked

95. A tax system _______ when the “right people actually bear the burden of taxes.” (Points: 3)
is efficient
is equitable
has no deadweight loss
is both A and B I picked

96. Criteria that economists use in selecting a tax system include ______. (Points: 3)
ability to pay and benefits received
only benefits received
only ability to pay I picked

97. A principle that suggests that people with more income or wealth should pay more taxes is the ______. (Points: 3)
ability-to-pay principle
regressive tax principle
progressive tax principle i picked
benefits principle

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  3. 21
asked by chris
  1. This looks like a "take-home test?" In any event, you might like some of the following sites:


    Note that we do not DO your work for you, but HELP by at least suggesting where you might look.


    1. 0
    2. 0
    posted by SraJMcGin
  2. wasnt asking to do the work for me was asking for help in letting me know if i was on the right track with my answers

    1. 0
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    posted by chris
  3. whew. Quite a bit.
    But since you asked and since you demonstrated that you tried first.

    50) I think d, average total cost
    51) I agree
    52) I think c, price takers
    53 to 56) I agree
    57) I think b, zero economic profit means zero opportunity cost
    58 to 61) I agree
    62) I think b. Diminishing marginal utility means marginal utility declines with consumption. Period.
    63 to 65) I agree
    66) I think c. While the MU of the two goods may not equal at optimization, the ratios MU/P of each will be equal.
    67) I agree
    68) Hummmm... I guess I agree. A monopoly is generally characterized by a single seller and many buyers. I could also be a single buyer and many sellers (answer b. However, such a firm is more frequently called a Monopsony.) Regardless, monopoly markets very frequently have products without substitutes.

    69 to 71) I agree
    72) I think a.
    73 to 74) I agree
    75) Hummm.... too bad "all of the above" is not a choice as all are true. To maximize, a monopolist, like all firms, must be able to estimate its production and cost functions. (but this answers seems off topic). Price discrimination occurs when a monoplist charges different prices to different customers. Often regulatory agencies hate this. So b is true. The monopolist must prevent selling to one group who re-sells to the higher group. So c is true. To change different groups different prices, the monopolist must estimate the different demand (i.e., utility) equations. So d is true. If we are talking about a perfect price descriminator, then d is the best answer.

    76) I think b.
    77 to 83) I agree
    84) I think d. A monopoly has one firm, monopolistic competititon has many.
    85 to 87) I agree
    88) I think b. C is not true as, at the margin, marginal beneift is greater than marginal cost.
    89 to 93) I agree
    94) I think a. Efficient tax systems may not be equitable.
    95) I think b. The quote is referring to equity, not efficiency
    96. Hummm..... While I think ability to pay is the dominating criteria for tax systems, sometimes benefits are not equally shared but go to specific people. So, as in the case of taxes on gasoline use to fund road construction, benefits receive is a principle guiding the tax. I would go with a.
    97) I think a.

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    posted by economyst
  4. If the own-price elasticity of demand for gasoline is -.2 and there is a 10% increase (+.10) in the price of gasoline, what will be the percentage change to the equilibrium demand for gasoline?

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    2. 0
    posted by Anonymous
  5. Economyst, why do you bother posting things like "I agree" for mutiple choice questions? Your opinion doesn't matter if "agree or disagree" aren't even options for a viable answer champ.

    1. 0
    2. 0
    posted by Nick
  6. estimate its own production and cost functions.

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    2. 0
    posted by drea

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