ECON 102 QUESTIONS AND ANSWERS LATEST UPDATED
VERSION, GRADED A+.
The free and exit of firms in a monopolistically competitive market guarantees that
Both economic profit and economic losses disappear in the long run.
Which of the following market structures would the highest output of a particular good be produced?
Perfect Competition
Monopolistic competition is inefficient market structure because?
-Price exceeds marginal cost
-It has a deadweight loss, just as monopoly does at the equilibrium
-Some consumers will value the good at more than the marginal cost of production
ALL OF THE ABOVE ARE CORRECT
If two firms comprise the entire soft drink market, the market would be a(n)?
Duopoly
Suppose that Abby and Brad work together to operate as a profit-maximizing monopolist. What price
will they charge for water?
$6
If this market for water were perfectly competitive instead of monopolistic, what would be the price
for water?
$2
A situation in which firms choose their best strategy given the strategies by the other firms in the
market is called?
A Nash Equilibrium
The equilibrium price in a market characterized by oligopoly is?
Lower than in monopoly markets and higher than in perfectly competitive markets.
In a typical cartel agreement, the cartel maximizes when it?
Behaves as a monopolist
The prisoners' dilemma game?
Provides insight into why cooperation is difficult.
, The dominant strategy for Acme is to?
Produce a good quality product and the dominant strategy for Pinnacle is to produce a good quality
product.
As a number of firms in an oligopoly market?
Increases, the market approaches the competitive market outcome.
In a competitive market, no single producer can influence the market price because?
Many other sellers are offering a product that is essentially identical.
Refer to Table 14-1. Over what range of output is marginal revenue declining?
Marginal revenue is constant over the entire range of output.
Refer to Table 14-5. For this firm, the marginal revenue of the 12th unit is?
$11
Refer to Table 14-5. For this firm, the price of the product is?
$11
Refer to Table 14-6. What is the total revenue from selling 7 units?
$840
Suppose that a firm operating in perfectly competitive market sells 100 units of output. Its total
revenue from the sales are $500. Which of the following statements is correct?
- (i) Marginal revnue equals $5
-(ii) Average revenue equals $5
(iii) Proce equals $5
(i), (ii), (iii)
Whenever a perfectly competitive firm chooses to change its level of output, its marginal revenue?
Does not change
At the profit-maximizing level of output,
Marginal revenue equals marginal cost.
Farmer McDonald sells wheat to a broker in Kansas City, Missouri. Because the market for wheat is
considered to be competitive, Mr. McDonald maximizes his profit by choosing?
The quantity at which market price is equal to Mr. McDonald's marginal cost of production.
VERSION, GRADED A+.
The free and exit of firms in a monopolistically competitive market guarantees that
Both economic profit and economic losses disappear in the long run.
Which of the following market structures would the highest output of a particular good be produced?
Perfect Competition
Monopolistic competition is inefficient market structure because?
-Price exceeds marginal cost
-It has a deadweight loss, just as monopoly does at the equilibrium
-Some consumers will value the good at more than the marginal cost of production
ALL OF THE ABOVE ARE CORRECT
If two firms comprise the entire soft drink market, the market would be a(n)?
Duopoly
Suppose that Abby and Brad work together to operate as a profit-maximizing monopolist. What price
will they charge for water?
$6
If this market for water were perfectly competitive instead of monopolistic, what would be the price
for water?
$2
A situation in which firms choose their best strategy given the strategies by the other firms in the
market is called?
A Nash Equilibrium
The equilibrium price in a market characterized by oligopoly is?
Lower than in monopoly markets and higher than in perfectly competitive markets.
In a typical cartel agreement, the cartel maximizes when it?
Behaves as a monopolist
The prisoners' dilemma game?
Provides insight into why cooperation is difficult.
, The dominant strategy for Acme is to?
Produce a good quality product and the dominant strategy for Pinnacle is to produce a good quality
product.
As a number of firms in an oligopoly market?
Increases, the market approaches the competitive market outcome.
In a competitive market, no single producer can influence the market price because?
Many other sellers are offering a product that is essentially identical.
Refer to Table 14-1. Over what range of output is marginal revenue declining?
Marginal revenue is constant over the entire range of output.
Refer to Table 14-5. For this firm, the marginal revenue of the 12th unit is?
$11
Refer to Table 14-5. For this firm, the price of the product is?
$11
Refer to Table 14-6. What is the total revenue from selling 7 units?
$840
Suppose that a firm operating in perfectly competitive market sells 100 units of output. Its total
revenue from the sales are $500. Which of the following statements is correct?
- (i) Marginal revnue equals $5
-(ii) Average revenue equals $5
(iii) Proce equals $5
(i), (ii), (iii)
Whenever a perfectly competitive firm chooses to change its level of output, its marginal revenue?
Does not change
At the profit-maximizing level of output,
Marginal revenue equals marginal cost.
Farmer McDonald sells wheat to a broker in Kansas City, Missouri. Because the market for wheat is
considered to be competitive, Mr. McDonald maximizes his profit by choosing?
The quantity at which market price is equal to Mr. McDonald's marginal cost of production.
