ECO 204 week 4 Quiz (All correct)

Question 1.                 A monopolist faces

                                     a perfectly elastic demand curve.

                                     a portion of the market demand curve.

                                     an upward-sloping demand curve.

                                     no demand curve, because demand is not important to the monopolist.

                                     the market demand curve.s

Question 2.                 If a firm is making an economic profit, then

            the factors of production are being paid their opportunity costs.

            there will be no change in the number of firms if the industry is perfectly competitive.

             the factors of production are being paid less than their opportunity costs.

             the factors of production are being paid more than their opportunity costs.

             the firm will exit the industry.

Question 3.                 Which of the following is NOT an essential characteristic of monopolistic competition?

                                     a small number of sellers

                                     differentiated products

                                     relatively easy entry

                                     short-run profits

                                     a very elastic demand curve

Question 4.                 A monopolist will try to operate

                                     where marginal cost equals marginal revenue.

                                     in the inelastic range of the demand curve.

                                     where average revenue equals marginal revenue.

                                     at the highest price on the demand curve.

Question 5.                 For a perfectly competitive firm, the demand curve is

                                     the marginal revenue curve.

                                     perfectly inelastic.

                                     always equal to marginal cost.

                                     the same as the market demand curve.

Question 6.                 Retail outlets operate in which of the following market structures?

                                     perfect competition

                                     monopolistic competition

                                     oligopoly

                                     monopoly

                                     oligopsony

Question 7.                 If the demand curve of a monopolist is in the inelastic range, then

                                     total revenue will fall if price increases.

                                     total revenue will be unchanged if price increases.

                                     total revenue will rise if price increases.

                                     total supply will increase by an equal amount if demand increases.

                                     price will be unchanged if total revenue increases.

Question 8.                 Along a downward-sloping monopoly demand curve,

                                     marginal revenue is greater than price.

                                     elasticity of demand is constant.

                                     marginal revenue decreases when price decreases.

                                     marginal revenue is equal to zero when price is equal to zero.

Question 9.                 At the other end of the market continuum from perfect competition is

                                     the corporation.

                                     oligopoly.

                                     the partnership.

                                     monopsony.

                                     monopoly.

 Question 10.              When P = AR = MR = AC = MC,

                                     economic profits are positive.

                                     economic profits are zero.

                                     economic profits are negative.

                                     normal profits are zero.

                                     normal profits are negative.