AGEC Exam 3 Test questions with
verified answers graded A+ updated
Market prices are signals that direct production and consumption decisions - correct answer
✔✔true
The conditions necessary for "pure monopoly" are 1) many firms, 2) a homogeneous product,
and 3) complete freedom of entry and exit - correct answer ✔✔false
A purely competitive firm is called a price searcher - correct answer ✔✔false
The conditions necessary for "pure monopoly" are 1) a single seller, 2) a differentiated product,
and 3) no freedom of entry - correct answer ✔✔true
A pure monopolist is called a price taker - correct answer ✔✔false
The market demand curve slopes upward to the right. The firm in pure competition faces a
horizontal demand curve; the pure monopolist's demand curve is the market demand curve -
correct answer ✔✔false
Market models such as pure competition and pure monopoly are useful in evaluating the
economic efficiency of an industry. - correct answer ✔✔true
Purely competitive firms in equilibrium, with zero economic rent, are economically efficient
because the costs of society's goods and services are minimized. - correct answer ✔✔true
The length-of-run influences the elasticity of the market supply curve. - correct answer ✔✔true
, Ford and General Motors operate in a purely competitive market - correct answer ✔✔false
A pure monopolist is the only seller in a market; barriers to entry prevent competition from
others - correct answer ✔✔true
The monopolist's demand curve is the market demand curve. - correct answer ✔✔true
The monopolist's marginal revenue curve lies below the demand curve because market demand
curves always slope downward to the right - correct answer ✔✔true
The monopolist maximizes profit in the same manner as a purely competitive firm by producing
the output at which marginal revenue equals marginal cost, but the monopolist's marginal
revenue does not equal price as it does for the firm in pure competition - correct answer
✔✔true
A monopoly is efficient because the value to society of the last unit produced by the monopolist
is always greater than its opportunity cost to society - correct answer ✔✔false
The competitive firm's demand curve and the market demand curve are one and the same. -
correct answer ✔✔false
The term "imperfect competition" covers all those market possibilities that do not meet the
conditions of pure competition - correct answer ✔✔true
Public regulation of markets is intended to protect the public by preserving competition in
markets - correct answer ✔✔true
Firms grow either through internal or external expansion, or both. - correct answer ✔✔true
verified answers graded A+ updated
Market prices are signals that direct production and consumption decisions - correct answer
✔✔true
The conditions necessary for "pure monopoly" are 1) many firms, 2) a homogeneous product,
and 3) complete freedom of entry and exit - correct answer ✔✔false
A purely competitive firm is called a price searcher - correct answer ✔✔false
The conditions necessary for "pure monopoly" are 1) a single seller, 2) a differentiated product,
and 3) no freedom of entry - correct answer ✔✔true
A pure monopolist is called a price taker - correct answer ✔✔false
The market demand curve slopes upward to the right. The firm in pure competition faces a
horizontal demand curve; the pure monopolist's demand curve is the market demand curve -
correct answer ✔✔false
Market models such as pure competition and pure monopoly are useful in evaluating the
economic efficiency of an industry. - correct answer ✔✔true
Purely competitive firms in equilibrium, with zero economic rent, are economically efficient
because the costs of society's goods and services are minimized. - correct answer ✔✔true
The length-of-run influences the elasticity of the market supply curve. - correct answer ✔✔true
, Ford and General Motors operate in a purely competitive market - correct answer ✔✔false
A pure monopolist is the only seller in a market; barriers to entry prevent competition from
others - correct answer ✔✔true
The monopolist's demand curve is the market demand curve. - correct answer ✔✔true
The monopolist's marginal revenue curve lies below the demand curve because market demand
curves always slope downward to the right - correct answer ✔✔true
The monopolist maximizes profit in the same manner as a purely competitive firm by producing
the output at which marginal revenue equals marginal cost, but the monopolist's marginal
revenue does not equal price as it does for the firm in pure competition - correct answer
✔✔true
A monopoly is efficient because the value to society of the last unit produced by the monopolist
is always greater than its opportunity cost to society - correct answer ✔✔false
The competitive firm's demand curve and the market demand curve are one and the same. -
correct answer ✔✔false
The term "imperfect competition" covers all those market possibilities that do not meet the
conditions of pure competition - correct answer ✔✔true
Public regulation of markets is intended to protect the public by preserving competition in
markets - correct answer ✔✔true
Firms grow either through internal or external expansion, or both. - correct answer ✔✔true
