Economics Test 11/12/19
All of the following are characteristics of a monopolistic market EXCEPT
a monopolist has no control over price
A firm maximizes its profit, or minimizes its loss, when marginal revenue equals
MC
How does a firm become a legal monopoly?
All of these are ways a firm may become a legal monopoly
People who abuse public goods without helping pay for them are called
free riders
Which of the following markets most closely resembles monopoly?
Diamonds
Which of the following is an example of a government monopoly?
United States Postal Service
Monopolistic competition is similar to perfect competition because both market structures have
a large number of firms
Which of the following markets most closely resembles perfect competition?
agriculture
If the government decides a monopoly is necessary, it can
both a)take public ownership of the firm and b)regulate the price that a monopolist can charge
A legal monopoly may be created
by issuing patents or copyrights
A price-taking firm
cannot affect the market price of its product
The costs incurred by a firm when no output is being produced are called
fixed costs
Firms in monopolistic competition spend a lot on advertising because it
is a good way to differentiate their products to consumers
A monopolist is considered a price maker because he
is able to affect price by changing output
All of the following are characteristics of oligopoly EXCEPT
it is not possible to make profit in the long or short run
All of the following are characteristics of a perfectly competitive market EXCEPT
limited entry and exit
What do we call the cost producing one more unit?
marginal cost
What do we call the revenue received by a firm for selling one more unit?
marginal revenue
Which has many sellers that don't compete in price but compete in differentiating their product?
monopolistic competition
Which market has only one seller?
monopoly
Which market has only a few sellers that dominate the market, such the automotive industry?
oligopoly
Which of the following is NOT one of the types of markets we discussed?
oxymoron
Which market produces the lowest prices and highest quality goods?
perfect competition
What do we call firms in a competitive market?
price takers
What is meant by the phase "Tragedy of the Commons"?
private individuals can't fairly allocate public goods
Branding is an important phenomenon for consumers because it
provides information and quality assurance
Which of the following would NOT be variable cost for a firm?
rent
What do we call legal protection to exclusively use a specific logo or artistic design?
trademark
What do we call costs that change with output?
variable costs
