1. In economic terms, fixed costs are fixed with respect to changes in

A) output.

B) capital expenditure.

C) wages.

D) time.

Answer:____________

2. A price taker is

A) a firm that accepts different prices from different customers.

B) a consumer who accepts different prices from different firms.

C) a firm in a perfectly competitive market.

D) a firm that cannot influence the market price.

E) both C and D

Answer:____________

3. When a firm charges each customer the maximum price that the customer is willing to pay, the firm

A) engages in a discrete pricing strategy.

B) charges the average reservation price.

C) engages in second-degree price discrimination.

D) engages in first-degree price discrimination.

Answer: ____________

4. Monopolistically competitive firms have monopoly power because they

A) face downward sloping demand curves.

B) are great in number.

C) have freedom of entry.

D) are free to advertise.

Answer: ____________