Microeconomics Practice Exams
A monopoly produces - less than the efficient level of output because marginal benefit exceeds
marginal cost
A movement from a point inside the PPF to a point on the PPF is caused by - an improvement in
efficiency
A producer of widgets is most likely to be monopolist when - there are no close substitutes for
widgets and there are barriers to entry into the widget industry
A rightward shift of a production possibilities frontier (curve) indicates that: - economic growth
has occurred
All of the following are characteristics of a monopolistically competitive market except - the
firms in the industry engage in interdependent decision making
All of the following are examples of barriers to entry except - constant returns to scale
An important similarity between a monopolistically competitive firm and a monopolist is that
both - fail to produce where P=MC, resulting in deadweight loss
An increase in the quantity supplied of haircut is most likely to occur as a result of: - an increase
in the price of haircuts
An industry dominated by a few large firms whose pricing and output decisions are dependent
on one another is - oligopolistic
, An industry dominated by a few large firms whose pricing and output decisions are dependent
on one another is - oligopolistic
A cartel is an organization of firms - that reduces output and raises price in an effort to increase
joint profits
A competitive, profit-maximizing firm will choose to hire workers up to the point in which the
value of the marginal product - is equal to the wage
A decrease in the market supply of labor will ____ the equilibrium wage and cause a ____ a
perfectly competitive firm's value of the marginal product curve. - raise; movement along
A firm earns a normal profit (zero economic profit) when - price is equal to average total cost
A firm that is able to use price discrimination will seek to - charge customers with more elastic
demand a lower price
A market characterized by many firms producing differentiated products and entry and exit are
relatively easy is - monopolistically competitive
A monopolist that earns positive economic profit in short-run equilibrium will - earn positive
economic profit in the long run if it can maintain barriers to entry, assuming no changes in costs
or market demand
A monopolistically competitive firm's demand curve is ___ elastic than a perfectly competitive
firm's and ___ elastic than a monopolistic firm's - less; more
A monopoly produces - less than the efficient level of output because marginal benefit exceeds
marginal cost
A movement from a point inside the PPF to a point on the PPF is caused by - an improvement in
efficiency
A producer of widgets is most likely to be monopolist when - there are no close substitutes for
widgets and there are barriers to entry into the widget industry
A rightward shift of a production possibilities frontier (curve) indicates that: - economic growth
has occurred
All of the following are characteristics of a monopolistically competitive market except - the
firms in the industry engage in interdependent decision making
All of the following are examples of barriers to entry except - constant returns to scale
An important similarity between a monopolistically competitive firm and a monopolist is that
both - fail to produce where P=MC, resulting in deadweight loss
An increase in the quantity supplied of haircut is most likely to occur as a result of: - an increase
in the price of haircuts
An industry dominated by a few large firms whose pricing and output decisions are dependent
on one another is - oligopolistic
, An industry dominated by a few large firms whose pricing and output decisions are dependent
on one another is - oligopolistic
A cartel is an organization of firms - that reduces output and raises price in an effort to increase
joint profits
A competitive, profit-maximizing firm will choose to hire workers up to the point in which the
value of the marginal product - is equal to the wage
A decrease in the market supply of labor will ____ the equilibrium wage and cause a ____ a
perfectly competitive firm's value of the marginal product curve. - raise; movement along
A firm earns a normal profit (zero economic profit) when - price is equal to average total cost
A firm that is able to use price discrimination will seek to - charge customers with more elastic
demand a lower price
A market characterized by many firms producing differentiated products and entry and exit are
relatively easy is - monopolistically competitive
A monopolist that earns positive economic profit in short-run equilibrium will - earn positive
economic profit in the long run if it can maintain barriers to entry, assuming no changes in costs
or market demand
A monopolistically competitive firm's demand curve is ___ elastic than a perfectly competitive
firm's and ___ elastic than a monopolistic firm's - less; more
