G300 Exam Study Guide –
Practice Questions with Verified
Answers. GRADED A+. Latest
2026/2027 Update
A firm might choose to produce its own inputs if - Answer✔✔ -Long-term
contracts are costly to write
Spot exchange can be inefficient in the presence of: - Answer✔✔ -opportunism
Long term contracts are NOT efficient if - Answer✔✔ -specialized investments are
unimportant.
Spot markets are an efficient way for the firm to purchase inputs if: - CORRECT
ANSWERopportunism is not a problem.
Which of the following is the primary disadvantage of producing inputs within a
firm? - Answer✔✔ -Loss of specialization
, An incentive for managers to maximize profits is: - Answer✔✔ -performance
bonuses, takeovers, and reputation
A manager who tries to enhance worker effort by tying workers compensation to
the profitability of the firm is using: - Answer✔✔ -profit sharing
If the last unit of input increases total product, we know that the marginal product
is: - Answer✔✔ -positive
Total product begins to fall when: - Answer✔✔ -marginal product is zero
If the price of labor increases, in order to minimize the costs of producing a given
level of output, the firm manager should use: - Answer✔✔ -less labor and more
capital
T/F: Fixed costs are always greater than sunk costs - Answer✔✔ -False
Number of firms in perfect competition - Answer✔✔ -many
Number of firms in a monopoly - Answer✔✔ -one
number of firms in monopolistic competition - Answer✔✔ -Many
Number of firms in oligopoly - Answer✔✔ -few (usually 2-10)
Practice Questions with Verified
Answers. GRADED A+. Latest
2026/2027 Update
A firm might choose to produce its own inputs if - Answer✔✔ -Long-term
contracts are costly to write
Spot exchange can be inefficient in the presence of: - Answer✔✔ -opportunism
Long term contracts are NOT efficient if - Answer✔✔ -specialized investments are
unimportant.
Spot markets are an efficient way for the firm to purchase inputs if: - CORRECT
ANSWERopportunism is not a problem.
Which of the following is the primary disadvantage of producing inputs within a
firm? - Answer✔✔ -Loss of specialization
, An incentive for managers to maximize profits is: - Answer✔✔ -performance
bonuses, takeovers, and reputation
A manager who tries to enhance worker effort by tying workers compensation to
the profitability of the firm is using: - Answer✔✔ -profit sharing
If the last unit of input increases total product, we know that the marginal product
is: - Answer✔✔ -positive
Total product begins to fall when: - Answer✔✔ -marginal product is zero
If the price of labor increases, in order to minimize the costs of producing a given
level of output, the firm manager should use: - Answer✔✔ -less labor and more
capital
T/F: Fixed costs are always greater than sunk costs - Answer✔✔ -False
Number of firms in perfect competition - Answer✔✔ -many
Number of firms in a monopoly - Answer✔✔ -one
number of firms in monopolistic competition - Answer✔✔ -Many
Number of firms in oligopoly - Answer✔✔ -few (usually 2-10)
