economics questions

timer Asked: Apr 15th, 2016

Question description

1. Compared to a perfectly competitive industry with the same cost and demand, a single-price monopolist produces

a. more output and has a higher price

b.less output and has a lower price

c. more output and has a lower price

d. less output and has a higher price

2. total variable cost

a. increases as output increases

b. does not change as output changes

c. decreases as output increases

d. initially decreases and then increases as output increases.

3.If two duopolist can collude successfully, then both will

a.earn greater profits than if they do not collude

b. price at marginal cost

c. price below average total cost

d. lower their  economic profits

4.if the government imposes a tariff on imported bananas, then consumer surplus____, Producer surplus____ & the deadweight loss____

a. decreases; increases; decreases

b. increases; increases; decreases

c.increases; decreases; increces

d. decreases; increases; increases

e. decreases; increases; increases

5.For a single price monopolies that is maximizing profits, the price is

a. less than marginal revenue 

b. equal to marginal revenue

c. equal to marginal cost

d. greater than marginal cost

6. Jane's garage cleanin is a perfect competitive firm that currently cleans 80 garages a week. Janes marginal cost is $40, her average total cost is $40, and the price of cleaning a garage is $50. Jane

a. is maximizing her profit and is earning an economic profit

b. is not maximizing her profit and is eating an economic profit

c. is maximizing her profit and is incurring an economic loss

d. might be maximizing her profit and is earning an economic profit

e. is not maximizing her profit and is earning a normal profit anyway

7. one benefit of monopolistic competition over perfect competition is 

a. economic profit

b. product variety

c. excess capacity

d. efficiency 

8.Suppose that a fast-food is a superior good and peoples incomes increase. as a result the equilibrium price of fast food____ and the equilibrium quantity_____,

a. rises; increases

b. rises; decreases

c. falls; increases

d. falls; decreases

9.Which of the following is the best example of a public good?

a. public transportation by bus

b.clean air

c. pizza

d. postal services

10. In a monopolistically competitive industry 

a. firms can earn an economic profit in the long run because of barriers to entry

b. econmonic profit always equals zero

c. if firms are earning an economic profit, new firms enter the industry 

d. firms can earn an economic profit in the long run because of product differentiation  

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