ECON 202 EXAM 3 CARLISLE
QUESTIONS & ACTUAL CORRECT
ANSWERS PASSED ANSWERS
A competitive firm faces fixed costs even if it produces zero output. If it starts producing
and selling some output, which of the following would happen? - Correct Answer ✔✔
the firm's total cost would increase and their losses may become larger
A purely competitive seller is - Correct Answer ✔✔ a price taker
Pure monopolists may obtain economic profits in the long run because of - Correct
Answer ✔✔ barriers to entry
Barriers to entering an industry - Correct Answer ✔✔ brand loyalty
economies of sale
patents and licenses
ownership or control of essential resources
pricing
An increasing-cost industry is the result of - Correct Answer ✔✔ higher resource prices
which occur as the industry expands
In the short run, a purely competitive firm that seeks to maximize profit will produce -
Correct Answer ✔✔ where total revenue exceeds total cost by maximum amount
Economists use the term imperfect competition to describe - Correct Answer ✔✔ those
markets which are not purely competitive
Local electric or gas utility companies mostly operate in which market structure? -
Correct Answer ✔✔ pure monopolies
Large minimum efficient scale of plant combined with limited market demand may lead
to - Correct Answer ✔✔ natural monopoly
Allocative efficiency is achieved when the production of a good occurs where - Correct
Answer ✔✔ price = marginal cost
A constant-cost industry is one in which - Correct Answer ✔✔ resource prices remain
unchanged as output is increased
Marginal revenue is the - Correct Answer ✔✔ change in total revenue associated with
additional units of output
QUESTIONS & ACTUAL CORRECT
ANSWERS PASSED ANSWERS
A competitive firm faces fixed costs even if it produces zero output. If it starts producing
and selling some output, which of the following would happen? - Correct Answer ✔✔
the firm's total cost would increase and their losses may become larger
A purely competitive seller is - Correct Answer ✔✔ a price taker
Pure monopolists may obtain economic profits in the long run because of - Correct
Answer ✔✔ barriers to entry
Barriers to entering an industry - Correct Answer ✔✔ brand loyalty
economies of sale
patents and licenses
ownership or control of essential resources
pricing
An increasing-cost industry is the result of - Correct Answer ✔✔ higher resource prices
which occur as the industry expands
In the short run, a purely competitive firm that seeks to maximize profit will produce -
Correct Answer ✔✔ where total revenue exceeds total cost by maximum amount
Economists use the term imperfect competition to describe - Correct Answer ✔✔ those
markets which are not purely competitive
Local electric or gas utility companies mostly operate in which market structure? -
Correct Answer ✔✔ pure monopolies
Large minimum efficient scale of plant combined with limited market demand may lead
to - Correct Answer ✔✔ natural monopoly
Allocative efficiency is achieved when the production of a good occurs where - Correct
Answer ✔✔ price = marginal cost
A constant-cost industry is one in which - Correct Answer ✔✔ resource prices remain
unchanged as output is increased
Marginal revenue is the - Correct Answer ✔✔ change in total revenue associated with
additional units of output
