QUESTION 16

1. In competitive markets, the demand curve faced by the individual firm is:

	A	equal to the market demand curve.
	B	perfectly elastic.
	C	perfectly inelastic.
	D	downward sloping.

10 points

QUESTION 17

1. When there are many buyers and sellers of a good and the product sold is identical across firms:

	A	the demand curve for each firm's output is perfectly elastic.
	B	the industry demand curve is perfectly elastic.
	C	the demand curve for each firm's output is perfectly inelastic.
	D	the industry demand curve is perfectly inelastic.

10 points

QUESTION 18

1. The "short run" is defined as:

	A	the period before any changes in a firm's output can be made.
	B	less than six months.
	C	less than one year.
	D	the period before entry or exit can occur.

10 points

QUESTION 19

1. Facebook, Instagram, Snapchat, and Twitter all exist in the social media market. Why?

	A	The government has decided to allow for multiple products.
	B	Consumers don't care about coordination.
	C	There are multiple niches to fill, and each product is able to dominate one niche.
	D	Comptetitors all go after the same niche.

10 points

QUESTION 20

1. An industry is said to be perfectly competitive when:

	A	demand in the industry is high.
	B	each firm has virtually no influence over the price of its product.
	C	there are many buyers and sellers, and each is large relative to the total market.
	D	supply in the industry is highly elastic.

10 points

QUESTION 21

1. When the size of the production is the most efficient:

	A	total cost is at the minimum.
	B	average cost is at the minimum.
	C	marginal cost is at the minimum.
	D	fixed cost is at the minimum.

10 points

QUESTION 22

1. Which one would NOT be considered a network good?

	A	Snapchat
	B	Facebook
	C	Gmail
	D	Instagram

10 points

QUESTION 23

1. OPEC is a:

	A	group of oligopolistic producers that try to behave like a monopoly.
	B	monopoly that tries to behave oligopolistically.
	C	group of perfectly competitive producers that try to behave in a monopolistically competitive manner.
	D	group of monopolistically competitive producers that try to behave in a perfectly competitive manner.

10 points

QUESTION 24

1. Cheating in cartels is most likely to occur when actions are:

	A	always observable.
	B	not observable.
	C	sometimes observable.
	D	usually observable.

10 points

QUESTION 25

1. Suppose that you own two farms on whch to grow corn. Farm 2 has a lower marginal cost of producing corn that farm 1. To lower the total cost of production, you should produce:

	A	all on farm 1.
	B	all on farm 2.
	C	some on farm 1 and some on farm 2.
	D	neither on farm 1 nor on farm 2.

10 points

QUESTION 26

1. Outcomes that people neither intend nor design:

	A	are always undesirable.
	B	can be desirable with the right institutions.
	C	are always desirable.
	D	are impossible.

10 points

QUESTION 27

1. Economic profit differs from accounting profit because of it's inclusion of:

	A	explicit costs.
	B	incidental costs.
	C	potential costs.
	D	implicit costs.

10 points

QUESTION 28

1. Which of the following is NOT a key decision that a firm must make?

	A	what price to set
	B	what quantity to produce
	C	where to produce
	D	when to enter and exit an industry

10 points

QUESTION 29

1. The online photo-sharing Web site Shutterfly offers unlimited free uploads. Which of the following best explains why it offers this service at no charge?

	A	Shutterfly is trying to increase switching costs for its consumers.
	B	Shutterfly is trying to decrease its average costs.
	C	Shutterfly is trying to increase competition.
	D	The marginal cost of uploading photos is near zero; setting price equal to marginal cost is simply an efficient pricing strategy.

10 points

QUESTION 30

1. When opportunity cost is positive, economic profit _____ account profit.

	A	is greater than
	B	is less than
	C	equals
	D	eliminates