econ 1101 exam 2

Once I'MaPharmaCo. has received confirmation of the registration for its latest drug patent application, it will have created a monopoly for that product by restricting A. demand for the product. B. entry into the market. C. the amount of product advertising. D. the number of product compliments.

entry into the market

True or False: Perfectly Competitive Firms are easily found in the real world.

false

Which of the following is most likely to be a monopoly? A. local fast-food restaurant B. local electricity distributor C. local bathroom fixtures shop D. local television broadcaster

local electricity distributor

Shopping malls typically lease retail space to a large number of clothing stores. When this group of retailers competes to sell similar but not identical products, they engage in what economists call ________________________. A. a cartel B. collusion C. monopolistic competition D. perfect competition

monopolistic competition

There would be some control over price within rather narrow limits in which market model? A. pure competition B. monopolistic C. competition D. oligopoly

monopolistic competition

In a purely competitive industry, (a) each existing firm will engage in various forms of nonprice competition (b) new firms are free to enter and existing firms are able to leave the industry very easily (c) individual firms have a price policy (d) each firm produces a differentiated product

new firms are free to enter and existing firms are able to leave the industry very easily

If oligopolists compete hard against each other, a. they will start acting like imperfect competitors b. they will start acting like monopolistic competitors c. the costs for all will be driven up d. they will all experience zero profits

they will all experience zero profits

___________ include all spending on labor, machinery, tools, and supplies purchased from other firms. A. Total profits B. Total revenues C. Total costs D. Total profit margins

total costs

What happens in a perfectly competitive industry when economic profit is greater than zero? a. New firms may enter the industry. b. Existing firms may get larger. c. Firms may move along their LRAC curves to new outputs. d. There may be pressure on prices to fall. e. All of the above may occur.

All of the above may occur.

Saving money is a(n) ____________________, because it involves less consumption in the present, but the ability to consume more in the future. A. budget constraint B. intertemporal choice C. risk premium D. opportunity cost

intertemporal choice

A firm that holds a monopoly position in the market place is A. a price maker B. a price taker C. monopolistically competitive D. subject to infinite market forces

price maker

The marginal utility of two goods changes A. with the quantities consumed B. for the better, if taxes are imposed C. if they are inter temporal choices D. if the mother controls the household budget

with the quantities consumed

Variable costs is the:

the amount of labor, materials, and other resources required to produce your product.

Monopolistic competitors in the food industry will often include a recyclable symbol on packaging used for their product as a means to

differentiate their product

Under perfect competition, any profit-maximizing producer faces a market price equal to its A. average costs B. marginal costs C. total costs D. variable costs

marginal costs

Marginal utility can: A. be positive or negative, but not zero B. decrease, but not become negative C. be positive, negative, or zero D. increase positively, but not negatively

be positive, negative, or zero

If oligopolistic firms banded together with the intention of acting like a monopoly, it would likely result in their being able to a. divide up the monopoly level of profit amongst themselves b. hold down output in the short-run c. charge a higher price in the short-run d. both b and c are correct

divide up the monopoly level of profit amongst themselves

When Marietta chooses to only purchase a combination of goods that lie within her budget line, she: A. is decreasing utility. B. is maximizing utility. C. likely has negative savings. D. must reduce the quantity.

is maxmizing utility

A decrease in consumer preference for a product, other things being equal, will cause: A. a decrease in supply. B. market demand to shift to the left. C. market demand to shift to the right. D. quantity demanded is not a price function.

market demand to shift to the left

Economic profit can be derived from calculating total revenues minus all of the firm's costs, including its A. fixed cost B. variable C. opportunity cost

opportunity costs

Perfect competition and monopoly stand at _____________ of the spectrum of competition.

opposite ends

In which market model would there be a unique product for which there are no close substitutes? A) Pure Competition B) Oligopoly C) Monopolistic Competition D) Pure Monopoly

pure monopoly

Under which market model are the conditions of entry the most difficult? a. Oligopoly b. Pure competition c. Pure monopoly d. Monopolistic competition

pure monopoly

What role can advertising play with respect to differentiated products? A) allows a firm to sell any quantity it wishes B) shapes consumers intangible preferences C) shapes perceived demand for a price taker D) allows a firm to raise the prevailing market price

shapes consumers intangible preferences

If a mill shuts down its operations for three months, which will not be reduced to zero? a. variable cost b fixed cost c. opportunity cost d. total cost

variable costs