micro test #3

22. Refer to the diagram. At the profit-maximizing level of output, the firm will realize:

A. an economic profit of ABHJ

7. An unregulated pure monopolist will maximize profits by producing that output at...

C. MR = MC

19. Refer to the diagrams, which pertain to monopolistically competitive firms. Short-run equilibrium entailing economic loss is shown by:

C. diagram c only

14. Pure monopolists may obtain economic profits in the long run because:

C. of barriers of entry

8. Refer to the diagram for a pure monopolist. Monopoly price will be:

B. c

31. Refer to the diagram for a monopolistically competitive producer. The firm is:

C. realizing a normal profit in the long run

11. Refer to the diagram, If all monopolistically competitive firms in the industry have profit circumstances similar to the firm shown shown above:

A. new firms will enter the industry

10. Refer to the diagram, which pertain to monopolistically competitive firms. Long run equilibrium is shown by:

A. diagram a only

16. Which of the following is not a basic characteristic of monopolistic competition?

B. Recognized mutual interdependence

23. When a monopolistically competitive firm is in long-run equilibrium:

B. marginal revenue equals marginal cost and price equals average total cost

12. Under monopolistic competition, entry to the industry is:

B. more difficult than under pure competition but not nearly as difficult under pure monopoly

6. Mutual interdependence means that each oligopolistic firm:

B. must consider the reactions of its rivals when it determines its price policy

9. Economic profit in the LR is:

B. possible for a pure monopoly but not for a pure competitor

26. The kinked-demand curve of an oligopolist is based on the assumption that:

A. all competitors will follow a price cut but ignore a price increase

5. Which of the following is correct?

C. In the long run, purely competitive firms and monopolistically competitive firms earn economic profits, while purely competitive monopolies ay or may not earn econ profits

29. Which of the following is correct for a monopolistically competitive firm in the long-run equilibrium?

C. P exceeds MR

28. Which of the following best approximates a pure monopoly?

C. The only bank in a small town

20. Confronted with the same unit cost as data, a monopolistic producer will charge:

C. a higher price and produce a smaller output than a competitive firm

32. The monopolistically competitive seller's demand curve will become more elastic:

C. larger the number of competitors

15. The economic inefficiencies of monopolistic competition may be offset by the fact that:

D. consumers have increased product variety

17. The automobile, household appliance, and automobile tire industries are all illustrations of:

D. differentiated oligopoly

13. Refer to the diagram. The monopolistically competitive firm shown:

D. is realizing an economic profit

Bonus: With which of the following would Henry George have disagreed?

E. both C and D

33. Economically speaking, rent is a payment for:

F. all above except C

24. Refer to the diagram for a monopolistically competitive firm in the short-run equilibrium. This firm's profit maximizing price will be:

A. $10

25. Refer to the diagram for a monopolistically competitive firm in short-run equilibrium. The profit maximizing output of this firm will be:

B. 160

21. If all monopolistically competitive firms in the industry have profit circumstances similar to the firm shown:

B. some of the firms will exit the industry

27. Which of the following generalizations is false? Other things equal:

B. the interest rate is less on small loans than on larger loans

30. The monopolistically competitive form shown in the figure:

C. cannot operate profitably in the short run

18. Refer to the diagram. At the profit-maximizing level of output, total cost will be:

D. 0BHE