1.In which of the following market structures is the entry of new businesses the most difficult?

A.monopoly

B.oligopoly

C.monopolistic competition

D.perfect competition

2.Which of the following is characteristic of a perfectly competitive seller's demand curve?

A.price and marginal revenue are equal at all levels of output

B.average revenue is less than price

C.its elasticity is "1" at all levels of output

3. Refer to the figure above. At output level 0Q, average fixed cost:

A.is equal to the distance EF.

B.is equal to the distance QE.

C.is equal to the distance QF.

D.is equal to the distance QD.

4.When decreasing returns to scale occur:

A.the long-run average cost curve falls

B.marginal cost intersects average cost

C.the long-run average cost curve rises

D.average fixed cost will rise

5.Which of the following is an implicit cost to the Johnston Manufacturing Company?

A.payments of wages to its office workers

B.property taxes

C.rent paid for the use of equipment owned by the Schultz Machinery Company

D.returns that the shareholders could have received if they had not bought shares in the Johnson Manufacturing Company

E.payments made for its purchases of electrical power

6.Which of the following definitions is correct?

A.Accounting profit + economic profit = normal profit

B.Economic profit - accounting profit = explicit costs

C.Economic profit = accounting profit - implicit costs

D.Economic profit - implicit costs = accounting profit

E.Economic profit - accounting profit = normal profit

7.Monopolistic competition resembles perfect competition to the extent that:

A.non-price competition is emphasized in both

B.both involve the production of standard products

C.both involve the production of differentiated products

D.entry barriers are either weak or non-existent in both

E.entry barriers are strong in both

8.A business will maximize profits at the output at which:

A.the excess of total cost over total revenue is greatest

B.total revenue and total cost are equal

C.price exceeds average cost by the largest amount

D.the difference between marginal revenue and price is at a maximum

E.the excess of total revenue over total cost is greatest

10.Theshort-runshutdown point for a perfectly competitive business occurs at the point where:

A.price equals minimum AVC

B.total revenue is less than total cost

C.the business stops making an economic profit

D.price equals minimum AC

E.price equals minimum MC