ECON 411 Quiz 2
A
) Imperfectly competitive firms have a demand curve that ________ and a marginal revenue curve that ________ and is ________ the demand curve. A) slopes downward; slopes downward; below B) is horizontal; is horizontal; the same as C) slopes downward; is horizontal; above D) is horizontal; slopes downward; below E) slopes downward; slopes downward; the same as
A
) Restaurant meals are an example of a ________ good and clothing is an example of a ________ good. The pattern of interregional trade is determined primarily by ________. A) nontraded; traded; external economies. B) traded; nontraded; internal economies C) nondurable; durable; natural resource D) durable; nondurable; natural resources E) consumer; style; population
A
2) The share of ________ goods in employment is ________ across the country. The share of ________ goods in employment is ________ across the country. A) nontraded; uniform; traded; variable B) traded; uniform; nontraded; variable C) durable; uniform; nondurable; variable D) nondurable; uniform; durable; variable E) nontraded; variable; traded; uniform
A
21) Under the model of monopolistic competition, a(an) ________ in the number of firms in the industry will cause ________ to ________. A) increase; markup; decrease
A
A learning curve relates ________ to ________ and is a case of ________ returns. A) unit cost; cumulative production; dynamic increasing returns B) output per time period; long-run marginal cost; dynamic increasing returns C) unit cost; cumulative production; dynamic decreasing returns D) output per time period; long-run marginal cost; dynamic decreasing returns E) labor productivity; education; increasing marginal returns
A
A monopolistic firm A) will never sell a product whose demand is inelastic at the quantity sold. B) can sell as much as it wants for any price it determines in the market. C) cannot determine the price, which is determined by consumer demand. D) cannot sell additional quantity unless it raises the price on each unit. E) will always earn a profit in the long run.
Q = 20, so MR = 40-(20/2) = 30.
An imperfectly competitive firm has the foll owing demand curve: Q = 100 -2P. What is marginal revenue equal to when P = 40?
Q = 40, so MR = 30-(40/2) = 10.
An imperfectly competitive firm has the following demand curve: Q = 100-2P. What is marginal revenue equal to when P = 30?
F/Q = 100/10 = 10
An imperfectly competitive firm has the following total cost curve: C = 100 + 4Q. What is average fixed cost equal to when Q = 10?
C/Q = [100 + (4)(10)]/10 = 14
An imperfectly competitive firm has the following total cost curve: C = 100 + 4Q. What is average total cost equal to when Q = 10?
: MC = 4 for any Q
An imperfectly competitive firm has the following total cost curve: C = 100 + 4Q. What is marginal cost equal to when Q = 10?
C = 100 + (4)(10) = 14
An imperfectly competitive firm has the following total cost curve: C = 100 + 4Q. What is total cost equal to when Q = 10?
A
External economies of scale arise when the cost per unit A) falls as the industry grows larger and rises as the average firm grows larger. B) rises as the industry grows larger and falls as the average firm grows larger. C) falls as the industry and the average firm grows larger. D) remains constant over a broad range of output. E) rises as the industry and the average firm grows larger
A
External economies of scale often arise because similar firms A) locate in the same geographic region. B) collude to fix prices and increase profits. C) have excellent internal logistics. D) agree to cooperate to expand global trade. E) have economies of scale in production.
A
External economies of scale will ________ average cost when output is ________ by ________. A) reduce; increased; the industry B) reduce; increased; a firm C) increase; increased; a firm D) increase; increased; the industry E) reduce; reduce; the industry
A
Firms that produce ________ products must be ________ competitive. A) differentiated; imperfectly B) differentiated; perfectly C) standardized; imperfectly D) standardized; perfectly E) exported; imperfectly
A
If a firm increases its output in the ________ and unit costs ________, then t he firm is experiencing ________ of scale. A) long-run; increase; diseconomies B) short-run; decrease; economies C) long-run; decrease; diseconomies D) short-run; decrease; diseconomies E) long-run; increase; economies
A
If a firm increases its output in the ________ and unit costs ________, then the firm is experiencing ________ of scale. A) long-run; decrease; economies B) short-run; decrease; economies C) long-run; decrease; diseconomies D) short-run; decrease; diseconomies E) long-run; increase; economies
A
If a firm that uses a production process that yields economies of scale charges a price equal to ________, then profit will be ________. A) marginal cost; negative B) marginal revenue; maximized C) marginal cost; maximized D) marginal revenue; positive E) marginal cost; positive
D) constant returns to scale
If a firm's output doubles when all inputs are doubled, production is said to occur under conditions of A) increasing returns to scale. B) imperfect competition. C) intra-industry equilibrium. D) constant returns to scale E) decreasing returns to scale.
E) decreasing returns to scale
If a firm's output less than doubles when all inputs are doubled, production is said to occur under conditions of A) increasing returns to scale. B) imperfect competition. C) intra-industry equilibrium. D) constant returns to scale E) decreasing returns to scale.
C
If output is increased in the long-run, average production costs in the presence of internal diseconomies of scale will ________, and in the presence of external diseconomies of scale, will ________. A) decrease; decrease B) increase; remain constant C) remain constant; increase D) decrease; remain constant E) increase; decrease
A
If output is increased in the long-run, average production costs in the presence of internal economies of scale will ________, and in the presence of external economies of scale, will ________. A) decrease; decrease B) increase; remain constant C) remain constant; increase D) decrease; remain constant E) increase; decrease
C
If output is increased in the long-run, then in the presence of internal economies of scale the number of firms will ________, and in the presence of constant external returns to scale the number of firms will ________. A) decrease; decrease B) increase; remain constant C) remain constant; increase D) decrease; remain constant E) increase; decrease
A
If some industries exhibit internal increasing returns to scale in each country, we should not expect to see A) perfect competition in these industries. B) intra-industry trade between countries. C) inter-industry trade between countries. D) high levels of specialization in both countries. E) increased productivity in both countries.
C
If the firms in a market have constant returns to scale internally while there are external economies of scale for the industry, a firm's long-run supply curve will be ________ and the long-run market supply curve will be ________. A) downward sloping; downward sloping B) upward sloping; horizontal C) horizontal; downward sloping D) downward sloping; horizontal E) upward sloping; downward sloping
A
If there are a large number of firms in a monopolistically competitive industry A) long-run profit will be equal to zero. B) the country in which the firms are located can be expected to export the goods t hey produce. C) there will be barriers to entry that prevent addition firms from entering the industry. D) the firms will converge production on a standardized product. E) there will be a small number of firms that are very large and the rest will be very small.
A
If two countries begin trade and both produce a product subject to external economies of scale, then the country with the ________ rate of production will ________ production until it controls ________ of the market. A) higher; increase; 100% B) higher; increase; 50% C) lower; increase; 100% D) lower; increase; 50% E) higher; decrease; 0%
A
If two countries begin trade and both produce a product subject to internal economies of scale, then the country with the ________ rate of production will ________ production until it controls ________ of the market. A) higher; increase; 100% B) higher; increase; 50% C) lower; increase; 100% D) lower; increase; 50% E) higher; decrease; 0%
A
In the presence of external economies of scale, trade A) may or may not improve welfare in both countries. B) will unambiguously improves welfare in both countries. C) will unambiguously worsens welfare in both countries. D) will unambiguously worsen welfare in the exporting country and improve welfare in the importing country. E) will unambiguously improve welfare in the exporting country and worsen welfare in the importing country.
A
Internal economies of scale arise when the cost per unit A) falls as the average firm grows larger. B) rises as the industry grows larger. C) falls as the industry grows larger. D) rises as the average firm grows larger. E) remains constant over a broad range of output.
A
Internal economies of scale will ________ average cost when output is ________ by ________. A) reduce; increased; a firm B) increase; increased; a firm C) reduce; increased; the industry D) increase; increased; the industry E) reduce; reduce; the industry
A
Modeling trade in imperfectly competitive industries is problematic because A) there is no single generally accepted model of behavior by imperfectly competitive firms. B) there are no models of imperfectly competitive behavior. C) it is difficult to find an imperfectly competitive firm in the real world. D) collusion among imperfectly competitive firms makes usable data rare. E) there is only a single model of imperfect competition (monopoly) but imperfect competition can take many forms in the real world.
A
Monopolistic competition is associated with A) product differentiation. B) price-taking behavior. C) explicit consideration at the firm level of the strategic impact of other firms' pricing decisions. D) high profit margins in the long run. E) increasing returns to scale.
A) scale economies
One advantage of the specialization that results from international trade is that countries can take advantage of A) scale economies. B) production diversification C) smaller countries. D) taste reversals. E) lower transport costs
A
Patterns of interregional trade are primarily determined by ________ rather than ________ because factors of production are generally ________. A) external economies; natural resources; mobile B) internal economies; external economies; mobile C) external economies; population; immobile D) internal economies; population; immobile E) population; external economies; immobile
A
The Internet has made transactions between businesses (B2B trading) fast and easy. Any business in any location can access specialized knowledge, labor, and materials. It is likely that these virtual economic communities will result in A) external economies of scale. B) internal economies of scale. C) consolidation of industries into a small number of powerful firms. D) suppression of innovations and collusive behavior, driving up prices. E) government intervention and regulation
A) may be associated with a perfectly competitive industry
The existence of external economies of scale A) may be associated with a perfectly competitive industry. B) cannot be associated with a perfectly competitive industry. C) tends to result in one huge monopoly. D) tends to result in large profits for each firm. E) focuses more on individual firms than the industry as a whole.
cannot be associated with a perfectly competitive industry.
The existence of internal economies of scale A) cannot be associated with a perfectly competitive industry. B) may be associated with a perfectly competitive industry. C) is associated only with sophisticated products such as aircraft. D) cannot form the basis for international trade. E) focuses more on the industry than individual firms
A
The learning curve describes the ________ relationship between ________ and ________. A) inverse; unit cost; cumulative output B) direct; unit cost; cumulative output C) inverse; education; annual income D) direct; education; annual income E) direct; education; labor productivity
A
The long-run market supply curve in the presence of internal economies of scale is ________, and in the presence of external economies of scale, it is ________. A) downward sloping; downward sloping B) upward sloping; horizontal C) horizontal; upward sloping D) downward sloping; horizontal E) upward sloping; downward sloping
A
The primary determinant of patterns of interregional trade is A) accidents of history. B) resource allocations. C) factor abundance. D) weather. E) centralized optimization
A
The simultaneous export and import of widgets by the United States is an example of A) intra-industry trade. B) increasing returns to scale. C) imperfect competition. D) inter-industry trade. E) the effect of a monopoly on international trade
A
The study of factors that influence both international and interregional trade is referred to as A) accidents of history. B) economic geography. C) factor abundance theory. D) weather analysis. E) centralized optimization
A
Under oligopoly, firms' pricing policies are ________ and, under monopolistic competition, they are ________. A) interdependent; independent B) independent; interdependent C) cooperative; uncooperative D) uncooperative; cooperative E) profit maximizing; revenue maximizing
A
Under the model of monopolistic competition, a(an) ________ in the number of firms in the industry will cause ________ to ________. A) increase; average price; decrease B) increase; average price; increase C) increase; average cost; decrease D) decrease; markup; decrease E) increase; marginal cost; decrease
A
When a country both exports and imports a type of commodity, the country is engaged in A) intra-industry trade. B) increasing returns to scale. C) imperfect competition. D) inter-industry trade. E) an attempt to monopolize the relevant industry.
A
When there are external economies of scale, an increase in the size of the market will A) increase the number of firms and lower the price per unit. B) increase the number of firms and raise the price per unit. C) decrease the number of firms and raise the price per unit. D) decrease the number of firms and lower the price per unit. E) not affect the number of firms, but will lower the price per unit.
A
Where there are internal economies of scale, the scale of production possible in a country is constrained by A) the size of the domestic plus the foreign market. B) the size of the country. C) the size of the trading partner's country. D) the size of the domestic market. E) the size of the foreign market
A) increasing returns to scale
if a firms output more than doubles when all inputs are doubled, production is said to occur under conditions of A) increasing returns to scale. B) imperfect competition. C) intra-industry equilibrium. D) constant returns to scale E) decreasing returns to scale
