1. In perfect competition,

A. Each firm can influence the price of the good

B. There are few buyers

C. There are significant restrictions on entry

D. All firms sell at the same price

2. In perfect competition, a firm

A. Faces unity elasticity of demand for what it produces

B. Supplies its product with unity elasticity

C. Faces perfectly elastic demand for what it produces

D. Supplies its product with perfect elasticity

3. A firm should expand output as long as its

A. Average total revenue exceeds its average total cost

B. Average total revenue exceeds its average variable cost

C. Marginal cost exceeds its marginal revenue

D. Marginal revenue exceeds its marginal cost

4. Which of the following is not a feature of monopoly?

A. There are no barriers to entry and exit

B. The firm is a price maker

C. There are no close substitute goods

D. One firm is the only supplier of the good

5. Patents create monopolies by restricting

A. Demand

B. Prices

C. Entry

D. Profit

6. A monopoly that is able to perfectly price discriminate

A. Charges everyone the lowest price that they want to pay for each unit purchased

B. Produces less output

C. Eliminates consumer surplus

D. Creates a larger deadweight loss

7. The deadweight loss is largest for

A. A perfectly competitive market

B. A monopoly

C. A perfectly price-discriminating monopoly

D. A duopoly

8. The more firms an oligopoly has,

A. The more market power the oligopoly has. This results in higher prices and lower quantities of output than an oligopoly with fewer firms would have

B. The more important the price effect is, resulting in the market price being higher than when there are fewer firms in the oligopoly

C. The further market price will be from marginal cost

D. The more likely the firms will charge a price closer to the perfectly competitive price

9. An oligopoly would tend to restrict output and drive up price if

A. Barriers to entering the industry are negligible

B. Firms engage in informative advertising

C. Firms produce a standardized product

D. Firms collude and behave like a monopoly

10. When firms are faced with making strategic choices in order to maximize profit, economists typically use

A. the theory of monopoly to model their behavior

B. the theory of aggressive competition to model their behavior

C. game theory to model their behavior

D. cartel theory to model their behavior

11.Which of the following statements is not correct?

A. Monopolistic competition is similar to monopoly because in each market structure the firm can charge a price above marginal costs

B. Monopolistic competition is similar to perfect competition because both market structures are characterized by free entry

C. Monopolistic competition is similar to oligopoly because both market structures are characterized by barriers to entry

D. Monopolistic competition is similar to perfect competition because both market structures are characterized by many sellers

12.For monopolistically competitive firm, at the profit-maximising quantity of output,

A. Price exceeds marginal cost

B. Marginal revenue exceeds marginal cost

C. Marginal cost exceeds average revenue

D. Price equals marginal revenue

13.When a monopolistically competitive firm raises its price,

A. Quantity demanded falls to zero

B. Quantity demanded declines but not to zero

C. The market supply curve shifts outward

D. Quantity demanded remains constant