ECN 211 ASU EXAM 2 WITH 300
VERIFIED PRACTICE QUESTIONS WITH
ANSWERS – COMPLETE STUDY GUIDE |
ECN 211 ASU EXAM LATEST 2026/2027
ALREADY GRADED A+ GUARANTEED
PASS!! NEWEST!!
1. The law of diminishing marginal returns states that:
• A) Total output decreases as more of an input is added.
• B) Marginal product eventually decreases as more of a variable input is added,
holding other inputs fixed.
• C) Average total cost always decreases as output increases.
• D) Fixed costs increase as output increases.
Answer: B) Marginal product eventually decreases as more of a variable input is
added, holding other inputs fixed.
2. Which of the following is a fixed cost in the short run?
• A) Raw materials
• B) Labor wages paid by the hour
• C) Factory rent
• D) Electricity bills
Answer: C) Factory rent
3. Average Total Cost (ATC) is calculated as:
• A) Total Cost / Quantity
• B) Total Variable Cost / Quantity
• C) Total Fixed Cost / Quantity
, • D) Marginal Cost × Quantity
Answer: A) Total Cost / Quantity
4. The marginal cost curve intersects the average total cost curve at:
• A) The minimum of the ATC curve
• B) The maximum of the ATC curve
• C) The minimum of the average variable cost curve
• D) The point where total cost is maximized
Answer: A) The minimum of the ATC curve
5. In perfect competition, a firm is a:
• A) Price maker
• B) Price taker
• C) Price setter
• D) Monopolist
Answer: B) Price taker
6. A perfectly competitive firm maximizes profit by producing where:
• A) Price = Average Total Cost
• B) Marginal Revenue = Marginal Cost
• C) Total Revenue = Total Cost
• D) Price = Average Variable Cost
Answer: B) Marginal Revenue = Marginal Cost
7. If a perfectly competitive firm is producing where Price < Average Total Cost
but Price > Average Variable Cost, it should:
, • A) Shut down immediately
• B) Continue producing in the short run but exit in the long run
• C) Increase output
• D) Decrease output to zero
Answer: B) Continue producing in the short run but exit in the long run
8. The shutdown point for a perfectly competitive firm occurs where:
• A) Price equals minimum ATC
• B) Price equals minimum AVC
• C) Marginal Revenue equals zero
• D) Total revenue equals total fixed cost
Answer: B) Price equals minimum AVC
9. Which of the following is a characteristic of a monopoly?
• A) Many firms
• B) Identical products
• C) Barriers to entry
• D) Perfect information
Answer: C) Barriers to entry
10. For a monopolist, marginal revenue is:
• A) Equal to price
• B) Greater than price
• C) Less than price
• D) Equal to average total cost
Answer: C) Less than price
, 11. A monopolist maximizes profit by producing where:
• A) Price = Marginal Cost
• B) Marginal Revenue = Marginal Cost
• C) Price = Average Total Cost
• D) Average Total Cost = Marginal Cost
Answer: B) Marginal Revenue = Marginal Cost
12. Compared to perfect competition, a monopoly typically produces:
• A) More output at a lower price
• B) Less output at a higher price
• C) The same output at the same price
• D) More output at a higher price
Answer: B) Less output at a higher price
13. Deadweight loss in a monopoly represents:
• A) Loss of consumer surplus that is transferred to the monopolist
• B) Lost total surplus due to inefficiency
• C) The monopolist's profit
• D) The cost of barriers to entry
Answer: B) Lost total surplus due to inefficiency
14. Monopolistic competition is characterized by:
• A) One firm
• B) Many firms with differentiated products
• C) Few firms with identical products
• D) No barriers to entry but identical products
Answer: B) Many firms with differentiated products
VERIFIED PRACTICE QUESTIONS WITH
ANSWERS – COMPLETE STUDY GUIDE |
ECN 211 ASU EXAM LATEST 2026/2027
ALREADY GRADED A+ GUARANTEED
PASS!! NEWEST!!
1. The law of diminishing marginal returns states that:
• A) Total output decreases as more of an input is added.
• B) Marginal product eventually decreases as more of a variable input is added,
holding other inputs fixed.
• C) Average total cost always decreases as output increases.
• D) Fixed costs increase as output increases.
Answer: B) Marginal product eventually decreases as more of a variable input is
added, holding other inputs fixed.
2. Which of the following is a fixed cost in the short run?
• A) Raw materials
• B) Labor wages paid by the hour
• C) Factory rent
• D) Electricity bills
Answer: C) Factory rent
3. Average Total Cost (ATC) is calculated as:
• A) Total Cost / Quantity
• B) Total Variable Cost / Quantity
• C) Total Fixed Cost / Quantity
, • D) Marginal Cost × Quantity
Answer: A) Total Cost / Quantity
4. The marginal cost curve intersects the average total cost curve at:
• A) The minimum of the ATC curve
• B) The maximum of the ATC curve
• C) The minimum of the average variable cost curve
• D) The point where total cost is maximized
Answer: A) The minimum of the ATC curve
5. In perfect competition, a firm is a:
• A) Price maker
• B) Price taker
• C) Price setter
• D) Monopolist
Answer: B) Price taker
6. A perfectly competitive firm maximizes profit by producing where:
• A) Price = Average Total Cost
• B) Marginal Revenue = Marginal Cost
• C) Total Revenue = Total Cost
• D) Price = Average Variable Cost
Answer: B) Marginal Revenue = Marginal Cost
7. If a perfectly competitive firm is producing where Price < Average Total Cost
but Price > Average Variable Cost, it should:
, • A) Shut down immediately
• B) Continue producing in the short run but exit in the long run
• C) Increase output
• D) Decrease output to zero
Answer: B) Continue producing in the short run but exit in the long run
8. The shutdown point for a perfectly competitive firm occurs where:
• A) Price equals minimum ATC
• B) Price equals minimum AVC
• C) Marginal Revenue equals zero
• D) Total revenue equals total fixed cost
Answer: B) Price equals minimum AVC
9. Which of the following is a characteristic of a monopoly?
• A) Many firms
• B) Identical products
• C) Barriers to entry
• D) Perfect information
Answer: C) Barriers to entry
10. For a monopolist, marginal revenue is:
• A) Equal to price
• B) Greater than price
• C) Less than price
• D) Equal to average total cost
Answer: C) Less than price
, 11. A monopolist maximizes profit by producing where:
• A) Price = Marginal Cost
• B) Marginal Revenue = Marginal Cost
• C) Price = Average Total Cost
• D) Average Total Cost = Marginal Cost
Answer: B) Marginal Revenue = Marginal Cost
12. Compared to perfect competition, a monopoly typically produces:
• A) More output at a lower price
• B) Less output at a higher price
• C) The same output at the same price
• D) More output at a higher price
Answer: B) Less output at a higher price
13. Deadweight loss in a monopoly represents:
• A) Loss of consumer surplus that is transferred to the monopolist
• B) Lost total surplus due to inefficiency
• C) The monopolist's profit
• D) The cost of barriers to entry
Answer: B) Lost total surplus due to inefficiency
14. Monopolistic competition is characterized by:
• A) One firm
• B) Many firms with differentiated products
• C) Few firms with identical products
• D) No barriers to entry but identical products
Answer: B) Many firms with differentiated products
