ECON 102ECON 102 Final Exam Quizzes Colorado State University

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Submitted by ROBERTSON, KRISTI (KLR5625) on 4/10/2016 4:33:52 PM Points Awarded 10.00 Points Missed 0.00 Percentage 100% 1. Which two industry structures are characterized by easy entry and exit?... A) Perfect competition and monopolistic competition B) Oligopoly and monopoly. C) Oligopoly and monopolistic competition D) Perfect competition and monopoly E) Oligopoly and perfect competition Feedback: Assumptions made about the different industry structures Table for Individual Question Feedback Points Earned: 1.0/1.0 Correct Answer(s): A 2. In monopolistic competition, A) there is only one firm. B) firms are large relative to the total market. C) firms are small relative to the total market. D) firms produce identical products. Feedback: Assumptions made about the different industry structures Table for Individual Question Feedback Points Earned: 1.0/1.0 Correct Answer(s): C 3. Unlike a monopolist’s product, a monopolistically competitive firm’s productA) has many close substitutes B) has no close substitutes C) is homogeneous D) is unique Feedback: Firms in monopolistic competition produce differentiated products which are close substitutes for each other, Table for Individual Question Feedback Points Earned: 1.0/1.0 Correct Answer(s): A 4. Which of the following industries is most similar to monopolistic competition? A) The pizza industry in State College B) The soft drink industry C) The wheat industry D) The steel industry Feedback: The pizza industry in State College has many firms that produce differentiated products. It is also easy to enter and exit the industry. Table for Individual Question Feedback Points Earned: 1.0/1.0 Correct Answer(s): A 5. In a monopolistically competitive industry, in long run equilibrium A) firms produce at minimum average total cost and make zero economic profit. B) firms produce at greater than minimum average total cost and make positive economic profit. C) firms produce at greater than minimum average total cost and make zero economic profit. D) firms produce at minimum average total cost and make positive economic profit. Feedback: In long run equilibrium, firms make zero economic profit because of free entry and exit. However they do not produce at minimum average total cost. Table for Individual Question Feedback Points Earned: 1.0/1.0Correct Answer(s): C 6. For a monopolistically competitive firm, A) price is less than marginal revenue. B) price is equal to marginal revenue. C) price can be greater than or less than marginal revenue. D) price is greater than marginal revenue. Feedback: Since a monopolistically competitive firm faces a downward sloping demand curve, price is greater than marginal revenue. Table for Individual Question Feedback Points Earned: 1.0/1.0 Correct Answer(s): D 7. A monopolistically competitive firm A) must lower price to sell more output. B) can change output, but cannot change price. C) can sell as much output as it wants at the market price. D) sells a fixed amount of output, regardless of price. Feedback: A monopolistically competitive firm faces a downward sloping demand curve, so it must lower price to sell more output. Table for Individual Question Feedback Points Earned: 1.0/1.0 Correct Answer(s): A 8. Monopolistically competitive firms in long run equilibrium produce at _________ than the optimal scale. A) less than B) more than C) sometimes more and sometimes less than [Show More]

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