1.Firm X's total fixed costs are $1,000. Its total variable costs of producing 100 units are $2,000, and its total variable costs of producing 200 units are $4,000. What are its average costs of producing 100 and 200 units of output?

a.$20 and $20

b.$30 and $25

c.$10 and $5

d.$25 and $30

2.To analyze monopolistic competition in trade, we make several assumptions about the market. Which of the following is an assumption of monopolistic competition?

a.few firms in the industry

b.increasing returns to scale

c.difficult entry and exit

d.increasing long-run average cost

3.Which of the following is NOT a characteristic of monopolistic competition?

a.Firms have increasing returns to scale

b.The average cost for firms declines as they produce more output.

c.Firms produce an identical product.

d.Firms have some control over their markets.

4.Which of the following is an assumption of monopolistic competition model?

a. Production occurs with increasing returns to scale technology.

b. There are many firms in the industry.

c. Each firm faces a perfectly elastic demand curve.

d.Firms produce homogeneous outputs.