ECON201 FINAL EXAM Final Exam 2024 UPDATE Q$A VERIFIED BY EXPERT Graded A+

Question 1 of 29 5.0/ 5.0 Points One defining characteristic of pure monopoly is that: • A. The monopolist is a price taker • B. The monopolist uses advertising • 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 29 5.0/ 5.0 Points Which is a barrier to entry? • A. Close substitutes • B. Diseconomies of scale • C. Government licensing • D. Price-taking behavior Answer Key: C Question 3 of 29 5.0/ 5.0 Points Other things equal, which reduces competition in an industry? • A. Patent laws • 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 29 5.0/ 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 • D. Will earn an economic profit of zero in the long run Answer Key: D Question 5 of 29 5.0/ 5.0 Points An example of a monopolistically competitive industry would be: • A. Steel • B. Soybeans • C. Electricity • D. Retail clothing Answer Key: D Question 6 of 29 5.0/ 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 • 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 29 5.0/ 5.0 Points