Questions for Final You Got Wrong(:

Which of the following statements is correct? a. The demand curve for a purely competitive firm is perfectly elastic, but the demand curve for a purely competitive industry is downsloping. b. The demand curve for a purely competitive firm is downsloping, but the demand curve for a purely competitive industry is perfectly elastic. c. The demand curves are downsloping for both a purely competitive firm and a purely competitive industry. d. The demand curves are perfectly elastic for both a purely competitive firm and a purely competitive industry.

a. The demand curve for a purely competitive firm is perfectly elastic, but the demand curve for a purely competitive industry is downsloping.

The nondiscriminating pure monopolist's demand curve: a. is the industry demand curve. b. shows a direct or positive relationship between price and quantity demanded. c. tends to be inelastic at high prices and elastic at low prices. d. is identical to its marginal revenue curve.

a. is the industry demand curve.

For normally shaped demand and supply curves, if the number of buyers decreases, other things equal, both the: a. demand and supply will increase b. Equlibrium price and equlibrium quantity will decrease c. demand and supply will decrease d. Supply and the price will increase.

b. Equlibrium price and equlibrium quantity will decrease

Which of the following is a positive statement? a. An economist should test every theory at least twice b. Increases in the minimum wage cause unemployment c. We ought to deregulate the mortgage market. d. The government should provide unlimited health care to citizens.

b. Increases in the minimum wage cause unemployment

Which of the following market structures would you expect to yield the greatest product variety? a. Monopoly b. Monopolistic Competition c. Oligopoly d. Perfect Competition

b. Monopolistic Competition

When a purely competitive industry is in long-run equilibrium, which statement is true? a. Average total cost is less than marginal cost b. Price and minimum average total cost are equal c. Marginal cost is at its maximum level d. Marginal revenue is greater than price

b. Price and minimum average total cost are equal

When a pure monopolist is producing its profit-maximizing output, price will: a. be less than MR. b. equal neither MC nor MR. c. equal MR. d. equal MC.

b. equal neither MC nor MR.

Unique product is a characteristic of which of the following market a. pure competition b. monopoly c. monopolistic competition d. oligopoly

b. monopoly

Economic profit in the long run is: a. possible for both a pure monopoly and a pure competitor. b. possible for a pure monopoly, but not for a pure competitor. c. impossible for both a pure monopolist and a pure competitor. d. only possible when barriers to entry are nonexistent.

b. possible for a pure monopoly, but not for a pure competitor.

Because the monopolist's demand curve is downsloping: a. MR will equal price. b. price must be lowered to sell more output. c. the elasticity coefficient will increase as price is lowered. d. its supply curve will also be downsloping.

b. price must be lowered to sell more output.

If the variable costs of a profit-maximizing pure monopolist decline, the firm should: a. produce more output and charge a higher price. b. produce more output and charge a lower price. c. reduce both output and price. d. raise both output and price.

b. produce more output and charge a lower price.

An unregulated pure monopolist will maximize profits by producing that output at which: a. P = MC. b. P = ATC. c. MR = MC. d. MC = AC.

c. MR = MC.

A competitive firm in the short run can determine the profit-maximizing (or loss-minimizing) output by equating: a. price and average total cost. b. price and average fixed cost. c. price and marginal cost. d. price and marginal revenue.

c. price and marginal cost.

A purely competitive firm's short-run supply curve is: a. perfectly elastic at the minimum average total cost. b. upsloping and equal to the portion of the marginal cost curve that lies above the average variable cost curve. c. upsloping and equal to the portion of the marginal cost curve that lies above the average total cost curve. d. upsloping only when the industry has constant costs.

c. upsloping and equal to the portion of the marginal cost curve that lies above the average total cost curve.

The original price-quantity pairing is $10 and 52 units. After a decrease in the number of sellers the new price-quantity pairing is $12 and 50 units. Given this data one should be able to conclude that the price elasticity of demand is a. Not enough info given. b. Unit elastic. c. Elastic. d. Inelastic

d. Ineslastic

In the short run, a monopolist's economic profits: a. are always positive because the monopolist is a price-maker. b. are usually negative because of government price regulation. c. are always zero because consumers prefer to buy from competitive sellers. d. may be positive or negative depending on market demand and cost conditions.

d. may be positive or negative depending on market demand and cost conditions.