ECON EXAM 2025 WITH 100%
CORRECT ANSWERS
The force that lead to zero economic profits for monopolistically competitive firms in the long-
run is - CORRECT ANSWER✔✔Entry and exit of firms
According to the kinked demand model, an oligopolist may face... - CORRECT ANSWER✔✔more
elastic demand if it raises its price than if it reduces its price
if the production of a product creates external costs, there is an ____________ to production of
that good which the government can correct for by __________. - CORRECT
ANSWER✔✔overallocation of resources; imposing a per-unit tax
A system of transferable pollution rights: - CORRECT ANSWER✔✔provides firms with an
incentive to develop new pollution-abatement technologies
which of the following is a source of inequality in incomes?
a) luck
b) willingness to take risks
c) differences in investment in human capital.
d) All of the above - CORRECT ANSWER✔✔D
Compared to a perfectly competitive firm, a monopolist will produce at... - CORRECT
ANSWER✔✔a lower level of output
when a construction firm chooses not to hire Jane as a carpenter simply because she is female,
it is called... - CORRECT ANSWER✔✔job-entry discrimination
, Some impediment that prevents firms from competing in a market is a(n)... - CORRECT
ANSWER✔✔Barrier to entry
A group of firms that act together like a monopolist is a... - CORRECT ANSWER✔✔Cartel
An oligopoly pricing strategy in which firms apply a certain percentage markup to ATC in order
to set price is called... - CORRECT ANSWER✔✔Cost-Plus pricing
A type of market with numerous small firms and heterogeneous products is called - CORRECT
ANSWER✔✔Monopolistic Competition
The level of output that maximizes consumers' welfare is called... - CORRECT
ANSWER✔✔Allocatively efficient (or Qae)
Market Structure definition: - CORRECT ANSWER✔✔A theoretical Model of a real world market
type
5 characteristics of Perfect Competition: - CORRECT ANSWER✔✔Large number of small sellers,
large number of small buyers, homogeneous product, free entry and exit, perfect information
q* is found at - CORRECT ANSWER✔✔MR=MC
Allocative efficiency (Qae) is found at... - CORRECT ANSWER✔✔P=MC
Steps to find Econ Profit - CORRECT ANSWER✔✔find q*,
price at D schedule,
ATC at ATC schedule at q*,
CORRECT ANSWERS
The force that lead to zero economic profits for monopolistically competitive firms in the long-
run is - CORRECT ANSWER✔✔Entry and exit of firms
According to the kinked demand model, an oligopolist may face... - CORRECT ANSWER✔✔more
elastic demand if it raises its price than if it reduces its price
if the production of a product creates external costs, there is an ____________ to production of
that good which the government can correct for by __________. - CORRECT
ANSWER✔✔overallocation of resources; imposing a per-unit tax
A system of transferable pollution rights: - CORRECT ANSWER✔✔provides firms with an
incentive to develop new pollution-abatement technologies
which of the following is a source of inequality in incomes?
a) luck
b) willingness to take risks
c) differences in investment in human capital.
d) All of the above - CORRECT ANSWER✔✔D
Compared to a perfectly competitive firm, a monopolist will produce at... - CORRECT
ANSWER✔✔a lower level of output
when a construction firm chooses not to hire Jane as a carpenter simply because she is female,
it is called... - CORRECT ANSWER✔✔job-entry discrimination
, Some impediment that prevents firms from competing in a market is a(n)... - CORRECT
ANSWER✔✔Barrier to entry
A group of firms that act together like a monopolist is a... - CORRECT ANSWER✔✔Cartel
An oligopoly pricing strategy in which firms apply a certain percentage markup to ATC in order
to set price is called... - CORRECT ANSWER✔✔Cost-Plus pricing
A type of market with numerous small firms and heterogeneous products is called - CORRECT
ANSWER✔✔Monopolistic Competition
The level of output that maximizes consumers' welfare is called... - CORRECT
ANSWER✔✔Allocatively efficient (or Qae)
Market Structure definition: - CORRECT ANSWER✔✔A theoretical Model of a real world market
type
5 characteristics of Perfect Competition: - CORRECT ANSWER✔✔Large number of small sellers,
large number of small buyers, homogeneous product, free entry and exit, perfect information
q* is found at - CORRECT ANSWER✔✔MR=MC
Allocative efficiency (Qae) is found at... - CORRECT ANSWER✔✔P=MC
Steps to find Econ Profit - CORRECT ANSWER✔✔find q*,
price at D schedule,
ATC at ATC schedule at q*,
