Economics Quiz

Topics: Perfect competition, Monopoly, Oligopoly Pages: 6 (737 words) Published: August 2, 2013
1.| Question :| (TCO 3) Which of the following is most likely to be an implicit cost for Company X?|
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| Student Answer:| | Forgone rent from the building owned and used by Company X | | | | Rental payments on IBM equipment |
| | | Payments for raw materials purchased from Company Y | | | | Transportation costs paid to a nearby trucking firm | | Instructor Explanation:| Chapter 7.|
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| Points Received:| 1 of 1 |
| Comments:| |
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2.| Question :| (TCO 3) To economists, the main difference between the short run and the long run is that|
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| Student Answer:| | the law of diminishing returns applies in the long run, but not in the short run. | | | | in the long run all resources are variable, while in the short run at least one resource is fixed. | | | | fixed costs are more important to decision making in the long run than they are in the short run. | | | | in the short run all resources are fixed, while in the long run all resources are variable. | | Instructor Explanation:| Chapter 7.|

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| Points Received:| 1 of 1 |
| Comments:| |
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3.| Question :| (TCO 3) Economists would describe the U.S. automobile industry as|
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| Student Answer:| | purely competitive. |
| | | an oligopoly. |
| | | monopolistically competitive. |
| | | a pure monopoly. |
| Instructor Explanation:| Chapter 8.|
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| Points Received:| 1 of 1 |
| Comments:| |
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4.| Question :| (TCO 3) A purely competitive seller is|
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| Student Answer:| | both a "price maker" and a "price taker." | | | | neither a "price maker" nor a "price taker." |
| | | a "price taker." |
| | | a "price maker." |
| Instructor Explanation:| Chapter 8.|
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| Points Received:| 1 of 1 |
| Comments:| |
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5.| Question :| (TCO 3) Which of the following is correct?|
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| Student Answer:| | Both purely competitive and monopolistic firms are "price takers." | | | | Both purely competitive and monopolistic firms are "price makers." | | | | A purely competitive firm is a "price taker," while a monopolist is a "price maker." | | | | A purely competitive firm is a "price maker," while a monopolist is a "price taker." | | Instructor Explanation:| Chapter 10.|

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| Points Received:| 1 of 1 |
| Comments:| |
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6.| Question :| (TCO 3) Barriers to entering an industry|
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| Student Answer:| | encourage allocative efficiency. | | | | encourage productive efficiency. |
| | | are the basis for monopoly. |
| | | apply only to purely monopolistic industries. |
| Instructor Explanation:| Chapter 10.|
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| Points Received:| 1 of 1 |
| Comments:| |
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7.| Question :| (TCO 3) Monopolistic competition means|
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| Student Answer:| | a market situation where competition is based entirely on product differentiation and advertising. | | | | a large number of firms producing a standardized or homogeneous product. | | | | many firms producing differentiated products. |

| | | a few firms producing a standardized or homogeneous product. | | Instructor Explanation:| Chapter 11.|
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| Points Received:| 1 of 1 |
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8.| Question :| (TCO 3) Product variety is likely to be greater in|
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| Student Answer:| | monopolistic competition than in pure competition. | | | | pure competition than in monopolistic competition. | | | | homogenous oligopoly than in monopolistic competition. | | | | homogenous oligopoly than in differentiated oligopoly. | | Instructor Explanation:| Chapter 11.|

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| Points Received:| 1 of 1 |
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9.| Question :| (TCO 3) Which of the following is a unique feature of oligopoly?|
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| Student Answer:|...
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