1.The automobile industry (Ford, GM, etc.) is an example of

a. oligopoly

b. monopoly

c. monopolistic competition

d. perfect competition

2.In long-run equilibrium for a monopolistically competitive firm,

a. economic profits of the firm are zero

b. the marginal revenue curve is upward sloping

c. the price is the same that would prevail if the industry were perfectly competitive

3.A natural monopoly

a.is best protected and regulated by the state

b.is not necessarily a "bad" monopoly

c.exists for most utilities such as electric, phone, etc.

d.all of the above

4.A profit-maximizing monopolistic firm will adjust its output to the point where

a.average total costs are minimized

b.average revenue = average cost

c.marginal costs = average revenue

d.marginal revenue = marginal costs

5.Which of the following is dissimilar for the perfectly competitive firm and the monopoly firm?

a.objective of the firm

b.marginal revenue

c.marginal cost

d.average total cost

6.No close substitutes and entry to the market is blocked are two characteristics of

a.monopoly

b.perfect competition

c.monopolistic competition

d.oligopoly

7.Fast food restaurants are a good example of which market structure?

a.oligopoly

b.natural monopoly

c.monopoly

d.monopolistic competition

8.Retail gasoline firms are an example of

a.perfect competition

b.monopoly

c.monopolistic competition

d.oligopoly

9.Natural monopolies are usually

a.regulated

b.firms with increasing costs

c.profitable

d.unable to cover fixed costs

10.The distinguishing characteristic of an oligopolistic market is

a.product differentiation

b.profit maximization criteria is not the same as for other market structures

c.interdependence of firms

d.many firms

11.The monopolistic competition market structure differs from the perfectly competitive market structure most strongly with regards to which assumption?

a.many firms

b.homogeneous product

c.no limits to entry/exit

d.perfect knowledge

12.A phrase that distinguishes oligopoly firms from others is

a.reactive

b.new and improved

c.entry blocked

d.product differentiation

13.A firm in a monopolistically competitive industry finds that the additional cost of producing one additional unit of output is $4 and the additional revenue that could be earned from that additional output is $5. This firm should

a.advertise more

b.produce less

c.increase costs

d.produce more

14.What drives and distinguishes monopolistic competition is

a.price retaliation

b.uniform prices

c.product differentiation

d.market expansion

15.The product of a monopoly firm must

a.be homogeneous

b.have an upward sloping average variable cost

c.have no close substitutes