ECON exam 3 Correct Questions And
Answers
The force that lead to zero economic profits for monopolistically competitive firms in the
long-run isCorrect Answers Entry and exit of firms
According to the kinked demand model, an oligopolist may face...Correct Answers more
elastic demand if it raises its price than if it reduces its price
if the production of a product creates external costs, there is an ____________ to
production of that good which the government can correct for by __________.Correct
Answers overallocation of resources; imposing a per-unit tax
A system of transferable pollution rights:Correct Answers provides firms with an
incentive to develop new pollution-abatement technologies
which of the following is a source of inequality in incomes?
a) luck
b) willingness to take risks
c) differences in investment in human capital.
d) All of the aboveCorrect Answers D
Compared to a perfectly competitive firm, a monopolist will produce at...Correct
Answers a lower level of output
when a construction firm chooses not to hire Jane as a carpenter simply because she is
female, it is called...Correct Answers job-entry discrimination
Some impediment that prevents firms from competing in a market is a(n)...Correct
Answers Barrier to entry
A group of firms that act together like a monopolist is a...Correct Answers Cartel
An oligopoly pricing strategy in which firms apply a certain percentage markup to ATC in
order to set price is called...Correct Answers Cost-Plus pricing
A type of market with numerous small firms and heterogeneous products is
calledCorrect Answers Monopolistic Competition
The level of output that maximizes consumers' welfare is called...Correct Answers
Allocatively efficient (or Qae)
Answers
The force that lead to zero economic profits for monopolistically competitive firms in the
long-run isCorrect Answers Entry and exit of firms
According to the kinked demand model, an oligopolist may face...Correct Answers more
elastic demand if it raises its price than if it reduces its price
if the production of a product creates external costs, there is an ____________ to
production of that good which the government can correct for by __________.Correct
Answers overallocation of resources; imposing a per-unit tax
A system of transferable pollution rights:Correct Answers provides firms with an
incentive to develop new pollution-abatement technologies
which of the following is a source of inequality in incomes?
a) luck
b) willingness to take risks
c) differences in investment in human capital.
d) All of the aboveCorrect Answers D
Compared to a perfectly competitive firm, a monopolist will produce at...Correct
Answers a lower level of output
when a construction firm chooses not to hire Jane as a carpenter simply because she is
female, it is called...Correct Answers job-entry discrimination
Some impediment that prevents firms from competing in a market is a(n)...Correct
Answers Barrier to entry
A group of firms that act together like a monopolist is a...Correct Answers Cartel
An oligopoly pricing strategy in which firms apply a certain percentage markup to ATC in
order to set price is called...Correct Answers Cost-Plus pricing
A type of market with numerous small firms and heterogeneous products is
calledCorrect Answers Monopolistic Competition
The level of output that maximizes consumers' welfare is called...Correct Answers
Allocatively efficient (or Qae)
