ECON 110 ZIRLOTT ACTUAL TEST PAPER
2026 QUESTIONS WITH SOLUTIONS
GRADED A+
◉ Unlike a perfectly competitive market, a monopoly creates a
deadweight loss because it: Answer: Produces a lower output and
charges a higher price
◉ Why would a perfectly competitive firm continue to operate if
their economic profits is 0 in the long run? Answer: B/c the firm is
earning enough to cover all total costs and their accounting profit is
positive
◉ When a university price discriminates by offering need based
financial aid to low income students, the university is discriminating
based on the low income student's: Answer: willingness to pay for a
college education
◉ Perfectly competitive firms maximize profits when: Answer:
marginal cost equals price
◉ Diminishing marginal product of labor holds that: Answer: output
per additional worker declines as more workers are hired
, ◉ The slope of the production function is equal to: Answer: the
marginal product of labor
◉ (Price of MP3 Players Graph) If the market for MP3 players is
perfectly competitive and given that market price of $200, how many
Mp3 players does Apple have? Answer: 60
◉ (Price of MP3 Players Graph) What is the profit or loss Apple earns
at the level of output you determined in the question 8? Answer:
$3000
◉ (Price of MP3 Players Graph) Based on the results in Question 9, in
the long run, the following will happen to this market: Answer: Firms
will enter the market which will cause the supply curve for MP3
players to shift to the right, which, in turn, causes price to fall and
economic profit to fall to 0
◉ As output increases in the short run, average fixed costs: Answer:
fall
◉ Diseconomies of scale occur in the long run occur when: Answer:
average costs rise as output increases
◉ In a perfectly competitive market, one farmer's wheat is: Answer:
identical or the same as another farmer's wheat
2026 QUESTIONS WITH SOLUTIONS
GRADED A+
◉ Unlike a perfectly competitive market, a monopoly creates a
deadweight loss because it: Answer: Produces a lower output and
charges a higher price
◉ Why would a perfectly competitive firm continue to operate if
their economic profits is 0 in the long run? Answer: B/c the firm is
earning enough to cover all total costs and their accounting profit is
positive
◉ When a university price discriminates by offering need based
financial aid to low income students, the university is discriminating
based on the low income student's: Answer: willingness to pay for a
college education
◉ Perfectly competitive firms maximize profits when: Answer:
marginal cost equals price
◉ Diminishing marginal product of labor holds that: Answer: output
per additional worker declines as more workers are hired
, ◉ The slope of the production function is equal to: Answer: the
marginal product of labor
◉ (Price of MP3 Players Graph) If the market for MP3 players is
perfectly competitive and given that market price of $200, how many
Mp3 players does Apple have? Answer: 60
◉ (Price of MP3 Players Graph) What is the profit or loss Apple earns
at the level of output you determined in the question 8? Answer:
$3000
◉ (Price of MP3 Players Graph) Based on the results in Question 9, in
the long run, the following will happen to this market: Answer: Firms
will enter the market which will cause the supply curve for MP3
players to shift to the right, which, in turn, causes price to fall and
economic profit to fall to 0
◉ As output increases in the short run, average fixed costs: Answer:
fall
◉ Diseconomies of scale occur in the long run occur when: Answer:
average costs rise as output increases
◉ In a perfectly competitive market, one farmer's wheat is: Answer:
identical or the same as another farmer's wheat
