Amu Econ 101 Final Essay

893 WordsMay 17, 20154 Pages
Question 1 of 19 5.0 Points One defining characteristic of pure monopoly is that: A. The monopolist is a price taker B. The monopolist uses advertising Correct C. The monopolist produces a product with no close substitutes D. There is relatively easy entry into the industry, but exit is difficult Answer Key: C Question 2 of 19 5.0 Points Which is a barrier to entry? A. Close substitutes B. Diseconomies of scale Correct C. Government licensing D. Price-taking behavior Answer Key: C Question 3 of 19 5.0 Points Other things equal, which reduces competition in an industry? A. Patent laws Correct B. Freedom of entry for new firms C. An increase in the number of producers D. An increase in the number of buyers Answer Key: A Question 4 of 19 5.0 Points The representative firm in a purely competitive industry: A. Will always earn a profit in the short run B. May earn either an economic profit or a loss in the long run C. Will always earn an economic profit in the long run Correct D. Will earn an economic profit of zero in the long run Answer Key: D Question 5 of 19 5.0 Points An example of a monopolistically competitive industry would be: A. Steel B. Soybeans C. Electricity Correct D. Retail clothing Answer Key: D Question 6 of 19 5.0 Points Firms in an industry will not earn long-run economic profits if: A. Fixed costs are zero B. The number of firms in the industry is fixed Correct C. There is free entry and exit of firms in the industry D. Production costs for a given level of output are minimized Answer Key: C Question 7 of 19 5.0 Points Marginal product is: A. the increase in total output attributable to the employment of one more worker. Correct B. the increase in total revenue attributable to the employment of one more

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