no special format
1. A firm will begin to experience diminishing returns at the point where A. marginal cost increases. B. marginal cost decreases. C. marginal product increases. D. total costs equal fixed costs. 2. TRUE or FALSE The shape of the Long Run Average Total Cost curve is due to the ability to use specialization and division of labour to decrease costs as output expands and the flexibility of all economic resources to be variable. 3. Which of the following is NOT characteristic of perfect competition? A. Price strategies by firms. C. No barriers to entry B. A standardized product D. A large number of sellers 4. In perfect competition, a perfectly competitive firm is NOT tempted to decrease supply in order to increase price because: the customer has no preference from which of the many firms to buy from. the product is standardized or homogeneous (i.e., perfect substitutes). the firm can sell as much output as it chooses at the existing price. All of the above. .0090? 5. TRUE or FALSE. In a perfectly competitive market structure, there may economic profits in the short run AND the long run. 6. The term l'productive efficiency" refers to: A. the level of output that coincides with the intersection of the MC and AVC curves. B. the minimization of the AFC in the production of any good. C. the production of the products most desired by consumers. D. the production of a good at the lowest ATC. 7. A perfectly competitive firms' short run supply curve is: A. the upward sloping portion of its marginal cost curve. B. the upward sloping portion of its AVC curve. C. its MC curve above AVC at its minimum. D. None of the above. GRAPH A is below GRAPH B is below MR O ABEZ NOTE: The values of coordinates are not the same in both graphs. For example, the value of (UK) where 0 is the Origin) is greater in the Graph A than is the value of (OK) in Graph B. It is recommended that you find the cheat sheet you were encouraged to create with notes for the different market structures. In Questions 11 and 12, the answer could be one word or two words. 11. Graph A represents a firm. 12. Graph B respresents a rm. 13. The firm represented in Graph A will maximize profits or minimize losses at units of output. A. 0A C. 0E B. OB D. OJ 14. The firm represented in Graph A will charge a price of A. OF C. CH B. 06 D. 0K 15. The firm represented in Graph A is a A. profit maximizing monopoly B. loss minimizing monopoy C. profit maximizing perfectly competitive firm D. loss minimizing perfectly competitive firm. 16. The firm represented in Graph B will maximize profits or minimize losses at units of output. A. 0A C. 0E B. 0B D. 02 17. The firm represented in Graph B will charge a price of A. OE C. 0K B. OG D. OH 18. The maximum total profit of the firm in Graph B is shown by the coordinates A. EU C. OEUK B. UX. D. HXUK REFER TO THE FOLLOWING GRAPH FOR THE NEXT 3 QUESTIONS. 19. Monopoly price will be: A. \"A\" C. "c\" B. \"B\" D. \"E\" 20. Monopoly output will be: A. \"Between F and G" C. \"G\" B_ \"H\" D. \"F\" 21. Monopoly profit: Cannot be determined from the information given. A. will be \"AE\" per unit. B. will be \"BC" per unit. C. will be "AC" per unit. D. Cannot be determined from the information given. 22. If a monopoly is selling its 100'h unit of output for $42.00, its marginal revenue: A. will also be $42.00. B. will be less than $42.00. C. will be greater than $42.00. D. None of the above. 23. When a rm increases all of its inputs or variable resources by 20% and its output rises by 15%,_it is said to be experiencing: A. average returns to scale. B. economies of scale. C. diseconomies of scale. D. constant returns to scale. 24. What do economies of scale, the ownership of essential raw materials and patents have in common? A. They must all be present before price discrimination can be practiced. B. They are all barriers of entry. C. They help explain why a monopolist's demand curve and MR curve are the same. D. They help explain why the long-run ATC is U-shaped. Use the following diagram to answer the next 3 questions. 0 too 1.0 fl! 2'0 m 25. The profit maximizing (or loss minimizing) level of output for this firm is 26. The profit maximizing price (or loss minimizing price) for this firm is 27. The profit (or loss) for this firm is . SHOW YOUR WORK. 28. TRUE or FALSE A firm with market power is able to sell all of their output at any price they desire. 29. A monopolistically competitive rm has a A. highly or relatively elastic demand curve due to the presence of substitutes. B. highly or relatively elastic demand curve due to a few substitutes. C. highly or relatively inelastic demand curve clue to a large number of substitutes. D. highly or relatively inelastic demand curve due a few substitutes. 30. TRUE or FALSE Excess Capacity, one of the inefficiencies of monopolistically competitive firms means that economic resources are often under-utilized. 31. Which of the following is NOT a basic characteristic of monopolistic competition? A. The use of trademarks or brand names among firms to compete. B. Recognized mutual interdependence among the firms. C. Product differentiation among firms selling substitute goods. D. A relatively large number
