Eco312 quiz 3

Eco312 quiz 3


Question 1.1.(TCO 3) Which of the following is most likely to be an implicit cost for Company X? (Points : 1)

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

Question 2.2.(TCO 3) The short run is characterized by (Points : 1)

plenty of time for firms to either enter or leave the industry.
increasing, but not diminishing returns.
fixed plant capacity.
zero fixed costs.

Question 3.3.(TCO 3) Economists would describe the U.S. automobile industry as (Points : 1)

purely competitive.
an oligopoly.
monopolistically competitive.
a pure monopoly.

Question 4.4.(TCO 3) If a firm in a purely competitive industry is confronted with an equilibrium price of $5, its marginal revenue (Points : 1)

may be either greater or less than $5.
will also be $5.
will be less than $5.
will be greater than $5.

Question 5.5.(TCO 3) Which of the following best approximates a pure monopoly? (Points : 1)

The foreign exchange market
The Kansas City wheat market
The only bank in a small town
The soft drink market

Question 6.6.(TCO 3) A natural monopoly occurs when (Points : 1)

long-run average costs decline continuously through the range of demand.
a firm owns or controls some resource essential to production.
long-run average costs rise continuously as output is increased.
economies of scale are obtained at relatively low levels of output.

Question 7.7.(TCO 3) The restaurant, legal assistance, and clothing industries are each illustrations of (Points : 1)

countervailing power.
homogeneous oligopoly.
monopolistic competition.
pure monopoly.

Question 8.8.(TCO 3) The term oligopoly indicates (Points : 1)

a one-firm industry.
many producers of a differentiated product.
a few firms producing either a differentiated or a homogeneous product.
an industry whose four-firm concentration ratio is low.

Question 9.9.(TCO 3) Which of the following is the best example of oligopoly? (Points : 1)

Women's dress manufacturing
Automobile manufacturing
Cotton farming

Question 10.10.(TCO 3) An industry having a four-firm concentration ratio of 85% (Points : 1)

approximates pure competition.
is monopolistically competitive.
is a pure monopoly.
is an oligopoly.

Question 11.11.(TCO 3) What is the difference between ACCOUNTING PROFIT, ECONOMIC PROFIT, and NORMAL PROFIT? (Points : 5)

Question 12.12.(TCO 3) Identify the primary characteristics of monopolistic competition and oligopoly. Give examples of each. (Points : 5)