Q31-40

1.An example of a firm in monopolistic competition is

Select one:

A.your local water company.

B.the Chinese restaurants in Adelaide.

C.AGL, the main provider of electricity in Sydney.

D.Foxtel.

E.Matthew, a wheat farmer.

2.If a large number of firms are competing, the market could be

Select one:

A.monopolistic competition or oligopoly.

B.monopolistic competition or monopoly.

C.perfect competition or monopoly.

D.perfect competition or monopolistic competition.

E.oligopoly or monopoly.

3.The major difference between monopolistic competition and monopoly is

Select one:

A.only firms in monopolistic competition are protected by barriers to entry.

B.monopoly is a price setter, and a firm in monopolistic competition is a price taker.

C.only a monopoly can make an economic profit in the long run.

D.only a firm in monopolistic competition can make an economic profit in the short run.

E.how the quantity of output is determined.

4.In the long run, firms in monopolistic competition make zero economic profit because

Select one:

A.of collusion among the various sellers.

B.firms are free to enter and exit.

C.their products are similar but slightly different.

D.their demand curves are horizontal.

E.of over-reliance on product marketing.

5.A firm in monopolistic competition definitely incurs an economic loss if

Select one:

A.marginal revenue equals marginal cost.

B.price is greater than marginal cost.

C.price is less than average total cost.

D.price equals marginal revenue.

E.marginal revenue is less than average total cost.

6.A firm faces a small number of competitors. This firm is competing in

Select one:

A.an oligopoly.

B.perfect competition.

C.monopolistic competition.

D.a monopoly.

E.a perfect multi-firm monopoly.

7.'Demand-pull inflation' is characterised by

Select one:

a.high levels of aggregate demand, which then pulls prices down to lower levels.

b.the short-run aggregate supply curve shifting to the right.

c.rising prices and rising employment in the short-run.

d.the short-run aggregate supply curve shifting to the left.

8.'Cost-push inflation' can be caused by

Select one:

a.a high growth rate in real wages.

b.an increase in aggregate demand, which pushes prices higher.

c.an increase in aggregate supply, which pushes prices higher.

d.growth in aggregate demand not keeping up with the growth in aggregate supply.

9.How is 'cyclical unemployment' defined?

Select one:

a.Unemployment due to an economic contraction or recession

b.Unemployment due to changes in the structure of the economy

c.Unemployment that occurs when people are searching for their first job

d.Unemployment that occurs when people become discouraged and stop looking for work

10.When would 'structural unemployment' increase?

Select one:

a.When the economy enters a recession

b.When the number of individuals who quit their job to find another increases

c.When discouraged workers drop out of the work force

d.When workers are replaced by machines and the workers do not have the skills to perform new jobs