AGEC-105 Test 2 Exam Questions and
Answers Graded A+
AFC+AVC=ATC T/F - Correct answer-True
If total economic surplus is positive due to a shift in a demand or supply curve,
society is better off? T/F - Correct answer-True
The law of diminishing marginal returns states that as the use of an input increases,
its MPP will fall. T/F - Correct answer-True
In an oligopoly, firms will match all price decreases of another, but will not match
price increases. T/F - Correct answer-True
In an oligopoly, the market demand curve is kinked. T/F - Correct answer-True
In an oligopoly, firms will attempt to differentiate their products. T/F - Correct
answer-True
In an oligopoly, firms will match all price increases of another, but will not match
price decreases. T/F - Correct answer-False
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, What assumption of perfect competition is "relaxed" in the case of monopolistic
competition? - Correct answer-Homogeneous products
The piece of legislation that not only plugged loopholes in the Sherman Antitrust
Act of 1890, but also created the Federal Trade Commission was? - Correct
answer-the Clayton Act of 1937
If the government were to impose a lump-sum tax on a monopolist, what is likely
to happen to the quantity produced of a commodity and the price charged relative
to the situation where there is no lump-sum tax imposed? - Correct answer-No
change in price or quantity produced would occur, only a reduction in profit
The social costs of imperfect competition are known as? - Correct answer-dead-
weight loss
Economics of scale are common barriers to entry? T/F - Correct answer-True
Capital access and costs are common barriers to entry? T/F - Correct answer-True
Absolute unit-cost advantages are common barriers to entry? - Correct answer-
True
Investment in biotechnology is a recommendation given to agricultural producers
largely because marginal costs of production are reduced. What are the likely
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Answers Graded A+
AFC+AVC=ATC T/F - Correct answer-True
If total economic surplus is positive due to a shift in a demand or supply curve,
society is better off? T/F - Correct answer-True
The law of diminishing marginal returns states that as the use of an input increases,
its MPP will fall. T/F - Correct answer-True
In an oligopoly, firms will match all price decreases of another, but will not match
price increases. T/F - Correct answer-True
In an oligopoly, the market demand curve is kinked. T/F - Correct answer-True
In an oligopoly, firms will attempt to differentiate their products. T/F - Correct
answer-True
In an oligopoly, firms will match all price increases of another, but will not match
price decreases. T/F - Correct answer-False
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, What assumption of perfect competition is "relaxed" in the case of monopolistic
competition? - Correct answer-Homogeneous products
The piece of legislation that not only plugged loopholes in the Sherman Antitrust
Act of 1890, but also created the Federal Trade Commission was? - Correct
answer-the Clayton Act of 1937
If the government were to impose a lump-sum tax on a monopolist, what is likely
to happen to the quantity produced of a commodity and the price charged relative
to the situation where there is no lump-sum tax imposed? - Correct answer-No
change in price or quantity produced would occur, only a reduction in profit
The social costs of imperfect competition are known as? - Correct answer-dead-
weight loss
Economics of scale are common barriers to entry? T/F - Correct answer-True
Capital access and costs are common barriers to entry? T/F - Correct answer-True
Absolute unit-cost advantages are common barriers to entry? - Correct answer-
True
Investment in biotechnology is a recommendation given to agricultural producers
largely because marginal costs of production are reduced. What are the likely
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