1. What will happen to the market supply curve of gadgets if a new gadget producer enters the market?

A.It will not change.

B.It will become more elastic.

C.There is insufficient data to determine.

D.It will shift right at every price with more output supplied.

E.It will shift left at every price with less output supplied.

2.Private businesses and consumers know that a resource will be spoiled if the whole society does not limit everyone's use of it. However, individuals are privately incentivized to increase their own use of it before it is spoiled and no longer available. This describes

A.a common pool good used efficiently

B.the primary reason some goods are publicly provided

C.the tragedy of the commons

D.a good that is made artificially scarce

E.one cause of a natural monopoly

3.The law of diminishing marginal utility pushes consumers' willing purchase-price down for every additional unit of consumption. The law of diminishing marginal returns pushes marginal costs up for firms and increases the price they must charge to make normal profits. These two phenomena are illustrated most clearly by which model?

A.Supply and demand

B.Circular flow

C.Production possibility curve

D.Total utility

E.Production function

4.Which of the following scenarios would produce the highest market concentration?

A.An industry with a very low minimum efficient scale

B.An industry with many firms operating with efficient scale

C.An industry with some firms operating with diseconomies of scale

D.An industry where no firm has achieved maximum efficient scale

E.An industry with a very high minimum efficient scale

5.Businesses in which market structure(s) would be affected if a per-unit excise tax were imposed?

A.Perfect competition

B.Monopolistic competition

C.Oligopoly

D.Monopoly

E.All of the above

6.If a good's price is lowered, it may have the effect of providing a higher utility per dollar for many consumers than another good, increasing the quantity demanded. Economists call this

A.diminishing marginal utility

B.the substitution effect

C.the income effect

D.diminishing marginal returns

E.rational choice theory

7.What is true of a firm's production if it operates in a perfectly competitive market with short-run economic profits?

A.Marginal revenue = demand = marginal cost > average total cost

B.Marginal revenue = marginal cost = average fixed cost

C.Average total cost = price = average variable cost

D.Marginal cost < Marginal revenue

E.Price = marginal cost = average total cost

8.A firm produces an allocatively and productively inefficient output at its profit-maximizing quantity. Which of the following statements could explain this scenario?

A.It has market power and a barrier to entry into its market.

B.It has no market power and no barriers to entry into its market.

C.It is operating with diseconomies of scale.

D.It has symmetric information between all consumers and producers in its market.

E.It sells a product that is indistinguishable from its competitors.

9.A perfectly competitive market will not produce the socially optimal quantity in long-run equilibrium if

A.there are external costs or benefits along with unclear property rights

B.there is no government intervention

C.the government institutes a lump-sum tax or lump-sum subsidy

D.the individual firms have achieved minimum efficient scale

E.there is perfectly symmetric information

10.In long-run equilibrium, the marginal social cost exceeds the marginal private cost, but the marginal social benefit is equal to the marginal private benefit. This describes which of the following markets?

A.Oligopoly with no externalities

B.Monopoly with perfect information

C.Perfect competition with a positive externality

D.Perfect competition with a negative externality

E.Perfect competition with asymmetric information